Cheer up, Tucson: Austin isn't example to follow

Posted on June 23, 2006 | Type: In the News | Author: Noah Clarke
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Convinced the grass is greener, some Tucson business leaders and public officials recently went to Austin to study its best practices for generating growth.

According to a series of articles in the Tucson Citizen, the Texas capital has "rhythm and synergy," a cool music scene and a hip downtown.

Local policymakers fear Tucson lacks a "vibrant core" and will never attract "creative class" workers that supposedly drive economic growth.

If only we were more like Austin, they opine.

Austin may very well be cool, but if the goal is economic strength, Tucson is the hot place to be.

The challenge with the "creative class" is that it's a myth.

There is no class of jobs with exclusive insight into meeting society's ever-changing demands.

For example, until Starbucks, coffee was just coffee. Now it is a multinational firm employing tens of thousands of people.

Its founder, Howard Schultz, grew up in a housing project in Brooklyn and played college football, hardly the stereotype that bohemian policymakers hope to attract.

Entrepreneurs, not hot nightclubs, generate economic growth.

And entrepreneurs want affordable housing, cheap electricity, safe neighborhoods, low taxes and few government regulations.

Tucson fits this bill. According to Inc. Magazine's Best Cities for Doing Business ranking, Tucson ranks 60th.

Austin came in 173rd, behind such boomtowns as Amarillo, Texas; Des Moines, Iowa; and Rochester, N.Y.

Austin is actually losing population while Tucson is growing.

This is vital, because the more people a city attracts, the more potential entrepreneurs there are to expand the economy and create jobs.

Austin's economic centerpiece, a new Samsung microchip plant, only happened after the city, county and state committed to give the electronics giant $233 million.

This is no model. Tucson can improve its economic outlook by lowering the city's sales and property taxes and streamlining the business licensing process.

"In Tucson, would-be entrepreneurs must navigate a 17-step process that the city's own Small Business Commission has described as 'seemingly never-ending,' " Institute for Justice lawyer Tim Keller found in a study conducted for the Goldwater Institute.

Tucson home-based businesses face equally cumbersome requirements and restrictions.

Changes to such bureaucracy would encourage out-of-state entrepreneurs to relocate to Tucson, and they would provide the right incentives for Tucson's own citizens to discover the next big thing.

This would give the city more energy than even the best espresso cafe.
Noah Clarke is an economist with the Goldwater Institute Center for Economic Prosperity.

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