How Arizona Can Become the Oakland A's of the States

In the book Moneyball, Michael Lewis describes how the Oakland A’s manager assembled a competitive team on a budget by ignoring expensive heavy hitters and rocket-armed pitchers. Instead, he looked at very basic things in inexpensive players like on-base percentages and ground-out rates. The Oakland A’s went on to win two-thirds of their games in 2001. This approach could be instructive to policymakers considering how to set a state up for future success.

Moneyball came to mind when Marty Nason, the Chief Financial Officer of a small up-and-coming company, responded to a recent column I wrote in the Phoenix Business Journal about what Arizona policymakers could do to get the job engine cranked up. Marty’s company wants to produce biodegradable plastic bottles and they were considering opening their plant and basing the company in Phoenix. But neither will be.

Facing high sales taxes on equipment, significantly high property taxes, demands that the company finance electrical infrastructure, and a lack of interest from government officials, this CFO decided to locate the production facility in Florida. States he’s considering for a second facility include Texas and Nevada, but not Arizona. None of these other states has an income tax. And Texas doesn’t sales tax production equipment.

As Marty said, “Phoenix appears to be looking for only ‘home runs.’” That is, Phoenix and by extension Arizona, only want big companies with lots of employees and fat paychecks, bribing them to come here with tax subsidies. “They forget hitting many ‘singles and doubles’ is often better than ‘home runs,’” he said.

He’s right. And today we have the chance to elect state policymakers who will pay attention to the basics – low taxes, small government, efficient transportation, private property rights – and if we do, we could be the Oakland A’s of the states.

Learn More:

Goldwater Institute: Lessons from Texas on Building an Economically Healthier Arizona (PDF)

Goldwater Institute: A New Tax Plan for a New Economy (PDF)

Phoenix Business Journal: My View: Look to Texas for Example of Clear-Headed Thinking