Business & Job Creation
Businesses need a friendly and fair business environment so they can compete, innovate, and create jobs. We’re keeping politicians from playing favorites by offering special deals and tax breaks to the favored few.
A recent editorial in the Arizona Daily Star takes the view that payday loans should be outlawed in Arizona, as scheduled, in 2010. Payday loans are very small loans that accept future paychecks as collateral and charge high fees and rates of interest. .
A few weeks ago, I pointed out that Arizona's economy has been disproportionately fueled by the construction industry. In 2006, the proportion of Arizona's total economic output from construction stood at 7.4 percent, 50 percent higher than the U.S. proportion of 4.8 percent. I attributed this to the relatively high commercial property taxes assessed at a rate twice as high as that of residential property.
There is belt-tightening across the nation. Sales at retail stores dropped in November, and sellers are bracing themselves for a paltry Christmas season. The reasons are obvious. The unprecedented decline in stock market and home values has eaten away at families' savings. Companies are laying off workers and cutting back their hours. People are rationally responding by cutting back to preserve what they have.
Senate Republicans recently announced their intention to balance the state budget without increasing taxes, as suggested by the governor. That will require significant reductions in spending.
ASU economist and professor Dennis Hoffman recently argued that reducing state spending by $1 billion would "significantly worsen and lengthen the economic recession." He estimated that 20,000 workers, including 12,000 private employees, would lose their jobs.
Business interests who supported the Arizona Corporation Commission's power grab over energy policy may be having second thoughts after the election of at least two self-described liberals to the five-member body. Combined with holdover Commissioner Kris Mayes, they will give the Commission a solid majority favoring more government control in the energy business.
President-Elect Obama wants to make good on his promise to create 2.5 million jobs by investing heavily in infrastructure, including retooling public buildings to make them more "green." Unsurprisingly, those in the construction industry cheered this news: after all, they stand to gain directly from this government largesse.
The Arizona Senate recently rejected bills that would have allowed new, state-owned roads to be constructed with private money as toll roads. Lets hope the idea resurfaces soon.
Toll roads make sense. They provide access to large sources of private capital a real boon to a financially strapped state. Arizona could get several highways built today without spending a penny, if it would simply let the private sector help.
When the Goldwater Institute filed a lawsuit challenging the Arizona Corporation Commission's authority to impose renewable energy standards--at a projected cost to rate-payers of $1.2 billion--we received lots of questions about why we were doing so. After all, the Commission was controlled completely by conservatives, who could be trusted not to over-reach their authority, right?
By any reading of the man, George W.P. Hunt -- Arizona's first governor -- was a progressive Democrat. He favored creating an income tax, extending the right to vote to women, and passing compulsory education laws. But when it came to drafting a constitution that would bring Arizona into the union as the 48th state, "Old Walrus," as he was called for his weight of about 300 lbs and his handlebar mustache, presided over a convention in 1910 that banned nearly all government subsidies to private business.
With a gross state product of $247 billion, Arizona's economy ranks with Hong Kong and Switzerland, two of the world's leading financial hubs. Our productivity exceeds the oil-rich United Arab Emirates and 187 other nations. On the world stage, Arizona is a player.
Our Southwest location opens the door to particular opportunities from tourism and mineral production to electricity generation. But we need not be limited to innate advantages. Ireland, India and today's economic engines aren't products of a natural-resource jackpot, but the end results of deliberate decisions.