Arizona is in desperate need of a job-creation package that will accelerate economic recovery. Our budget challenges will remain until 2014, 2015 and possibly 2016. Arizonans cannot afford to wait five years for a jobs-package.
Globally, the formula for economic prosperity follows the same pattern: an improved tax climate for business, greater investments in innovation and education, and a targeted, state-led economic development strategy. The passage of S1403, the Renewable Energy Tax Incentive Program, has demonstrated success for Arizona. We will have similar success with a job-training program, a quality-jobs initiative and the restructuring of the enterprise zone.
In the Mountain West, competitor states have better business tax climates than Arizona. Four states ranking in the top 10 nationally are Colorado, Utah, Texas and Washington. The 2010 State Business Tax Climate study ranks Arizona a mere 28th.
To suggest that Arizona does not need tax policy work is short-sighted. In addition to having better business climates, these same states have implemented smart economic development strategies. Texas is widely respected for its comprehensive state economic development approach and has cut taxes. Colorado recently passed the most aggressive renewable energy platform in the country. Meanwhile, Utah and Washington are becoming centers of excellence for innovation.
None of these states are experiencing a budget shortfall like Arizona.
Suggesting Arizona’s economic future will benefit by standing pat in the global contest for jobs is careless. Our current economic crisis has a re-occurring theme of recession: 1981-1984, 1989-1992, 2000-2002, and now 2007-2014. Each recession occurs more frequently, hits harder and lasts longer.
For the first time in history, Arizona will lag other states in economic recovery. Employment levels aren’t expected to normalize until 2014. It’s hard to imagine, with this evidence, that state leadership doesn’t need to do more for Arizona’s economy. Equally concerning is the notion that improving the climate for job-growth will negatively affect Proposition 100 or that a jobs bill should wait until Arizona’s budget challenges are fixed. Can we really remain stagnant another four years while competitor states like Utah, Colorado and Texas improve their competitive position?
House Speaker Kirk Adams and others have called for a balance between economic development programs and tax policies to increase Arizona’s competitiveness. This proposal modernizes Arizona’s enterprise zone, restores job training and encourages quality jobs through the expansion of base industries. It increases sales factor to 100 percent, which will place Arizona first in the nation for base industries; it reduces corporate income tax, moving us from 24th to eighth nationally; and it establishes a capital gains tax for small businesses. These measures will dramatically increase Arizona’s ability to produce jobs.
The Senate has wisely structured tax policy to improve our competitiveness while reducing any potential threat to the budget. For the first time, state policymakers have blended a competitive agenda through improved tax policy and stronger economic development initiatives.
Arizona will not recover nor change our long-term outlook unless we address both areas. The speaker’s proposal and the improvements made by the Senate make this jobs package a winner for Arizona families.
— Barry Broome is president
and CEO of the Greater
Phoenix Economic Council.