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PHOENIX-The state’s economy is expected to cool next year, but it will be a bit frostier if voters approve a ballot proposition in November that would severely limit growth, according to a national economist.

Sung Won Sohn, chief economist for Wells Fargo Bank in Minneapolis, has stated that if Proposition 202 were approved it will discourage businesses and workers from moving to Arizona. The increased price of land and homes that are sure to occur if the proposition passes would give an economic development edge to cities the Valley competes against, Sohn told a gathering of bank customers last week. “Las Vegas would love to attract some of your high-tech businesses,” he says.

Proposition 202, backed by several civic groups including the Sierra Club, would require every sizeable city in Arizona to draw growth boundaries around their communities. Development outside those rings would be virtually non-existent. The proposition would also require a two-year building moratorium while the boundaries are being drawn.

Sohn predicted that the Valley would generate about 3.2% more jobs near year, compared with an estimated increase of 4.3% this year and an actual gain of 4.6% in 1999. He also estimated that 55,000 people would immigrate to the Valley from other states this year, and another 50,000 in 2001.

Rising oil prices and the inflationary pressure they imply could hamper the economy in Arizona and other states, but the proposition is a unique local factor that could potentially have the greatest negative impact, Sohn said.

“Even if it doesn’t pass, it’s already creating a negative image of the community around the country,” he says.

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