Arizona has been penalized from haphazard growth with nearly total dependence on housing construction to match market demand of in-migration from persons from the mid-west.
This boom fed on itself and for a time produce a booming economy but was a house of cards built on itself. Once a card was removed, the house came tumbling down.
The proposed bills for economic growth recently proposed by some Arizona legislators is more of the same that will not change Arizona's present conditions. This is similar to dove hunting by shooting a shotgun pointed anywhere toward the horizon hoping by chance a dove may randomly fly into one of the shotgun pellets.
Nothing proposed will attract companies to Arizona on any measureable scale. Even if 1 or 2 companies are attracted to Arizona, this is clearly not effective and will never achieve economic growth.
The place to start the hunt for company re-locations to Arizona is first to adopt a blueprint that maps out a strategy to obtain specific sector job-growth using an input-output model. This blueprint will set the parameters, identify the necessary conditions that must be met and provide the needed incentives to attract the right kinds of industries to Arizona that will provide exponential growth by zeroing in on those industries that buy and sell needed inventories to other companies previously attracted to Arizona.
The true engine of job creation in Arizona will always be Arizona's businesses but Arizona state government must first be identified as a stable government that has its residents' welfare as its priority.
All residents must be served rather than only a handful as has been the case for 40 years. We must first get our house in order before we begin inviting guests for dinner.
Arizona enters a new decade with a massive budget deficit of $1.4 billion this year and approximately $3 billion next year.
To compound the deficit problem, there is
also a severe job deficit that threatens to crush hopes for a quick economic
Almost 10 percent of the state's jobs have been wiped out by the national recession, dealing a huge blow to Arizona's state and local government budgets, the housing market and retailers.
More jobs are needed to fill the more than 80,000 houses standing empty in metro Phoenix. More jobs are needed to put money in the pockets of people, whose spending is vital for businesses to get back on their feet. And more jobs are needed in new fields, a labor-force diversification of risk to better weather the next recession.
Arizona now needs to attract and grow major
companies with well paying jobs that will provide a multiplier effect that
ripples through the economies of Phoenix and Tucson (where I went to the
University of Arizona) but also the small towns of Arizona: Superior (my
home town where I was born and went to grade school), Globe (where I went to
high school), Safford-Thatcher (where I went to the EA community college),
Yuma, Ajo, and Flagstaff.
The challenge before Arizona is neither simple nor short-term.
To foster job growth, Arizona needs a vision, a strategy to carry out that vision, and leadership to sustain the vision through political and economic changes.
But before the vision is conceptualized, the first priority has to be to end the budget deficit. So let me start the discussion of government spending by setting the record straight.
From some on the right, I expect we'll hear a different argument if we just make fewer investments in our people, extend tax cuts for wealthier Arizonans, and eliminate more regulations, our deficits will go away. The problem is, that's what we have done for forty years under the auspices of a Republican majority in the state legislature and look where it has gotten us. A huge deficit crisis of $1.4 Billion and upwards of a $3 Billion deficit projected for next fiscal year so obviously, we cannot allow this trend to continue.
Rather than fight the same tired battles that have dominated Arizona for decades, it's time to try something new.
To do that, we have to recognize we face more than a deficit of dollars right now. We face a deficit of trust deep and corrosive doubts about how Arizona works that have been growing for years. To close this credibility gap we must take action at the Arizona capitol to end the outsized influence of Republican legislators. Arizona must give all Arizonans the government that serves all.
Of course, none of these reforms will even happen if we don't also reform how we work with one another.
Now, I am not naοve. I know both parties have fed divisions that are deeply entrenched. And on some issues, there are simply philosophical differences that will always cause us to part ways. These disagreements, about the role of government in our lives, have been taking place for over fifty years.
Let's reject the false choice between protecting our people and upholding our values to defend Arizona's economic growth and forge a more hopeful future for Arizona residents of today and tomorrow.
The First of a Two Prong Approach for Economic Growth: End Tax Exceptions (There should be no free rides).
To lay out a blueprint for an economic development strategy requires a firm foundation to build on.
Unfortunately, Arizona has no foundation to build on. We must first get our house in order and this means starting with the State of Arizona governor and state legislature.
Without the first prong of providing the base to build on, the second prong will never materialize.
For 40 years, the strategy has been to reduce government by cutting taxes but this strategy has proven to be a dismal failure. If the premise of budget cuts are inversely proportional to the creation of economic growth leading to new jobs, just the opposite has happened having budget cuts contributing to the loss of economic growth with fewer jobs.
The result of budget cuts has had its most adverse impact devastating programs for all Arizonans with a magnified severe blow to low and moderate income Arizonans. The quality of life in Arizona is the index measurement and the quality of life in Arizona has steadily diminished throughout the state.
To reverse this trend requires revenue. Arizona urgently needs to take a hard look at increasing revenue. Restoring the public trust demands more than budget cuts. The long term strategy is delineated below but Arizonans can not wait for 5, 10, 15, or 20 years to implement economic growth using
To enact economic growth requires stopping the slide down a muddy slope. Arizona needs to display a face of strength and well-being to entice companies to locate in Arizona and to do this requires immediate revenue for the quality of life is a major factor in attracting industry to any state.
The most immediate source of revenue is to end tax exceptions. There is over a $1 Billion in tax exceptions in the state budget. I know Goldwater Liberians and other Republicans are not keen on this idea, but if these tax exceptions primarily to businesses have not been the answer to promote economic growth concluding by reasonable assumption they no longer can be justified.
Arizona needs revenue this year to begin to achieve enhanced quality of life by funding the multitude of programs and services that tragically have been significantly diminished and in many cases deleted.
All of these diminished programs and services have an adverse impact on the quality of life in Arizona and the quality of life in Arizona is one of the prime incentives for attracting companies to Arizona. It is a a paradoxical catch 22 to impose more budget cuts and expect quality of life to be enhanced.
The variance between revenue and costs has never been greater. What is needed is a two prong approach to begin to establish Arizona as a prime state for company relocation: The first is the state budget with countless tax exceptions that provide an unfair free ride for many needs to be examined to see if tax exception usefulness has ended. Within the next ten days, I will publish an article identifying Arizona's tax exceptions for all to see not all are paying their fair share.
There is no more place to reduce the budget and the Democrats should hold firm on not providing any budget cut recommendations.
The time is long over due to increase revenue and the immediate way is to eliminate tax exceptions.
The Second Prong is to Formulate and Begin to Implement the New vision for Arizona's Future
For fifty years, housing construction was a major component of Arizona's economic base but without consumers with disposable incomes to afford housing, the market collapsed. This may be a simplistic explanation for we all know the national economy has an impact on everyone in the United States but Arizona has never positioned itself to insulate economic downturns.
Now is the time to formulate a new economic development strategy by growing Arizona into a global hub of commerce and strategically siting this global hub of commerce in the center of Arizona near the town of Casa Grande. We must begin to think outside the box.
As a former member of the prestigious Urban Land Institute, Washington DC, annual conferences have always highly touted and acclaimedNorth Carolina's Research Triangle Park. Once nothing more than an idea envisioned for empty acreage in one of the poorest areas of the Southeast, the "science park" is now an economic-development engine.
Arizona can create and build a similar Research Triangle Park near Casa Grande, Arizona, in the golden triangle of Yuma, Phoenix and Tucson.
There are three prime reasons for this siting:
The first being its location on Interstate 8 strategically located between Arizona and Tucson and extending to Yuma.
The second prime reason is the availability of 40,960 acres of state owned land near Casa Grande to build a major hub of international commerce and other economic development activities.
The third reason is geography. The economic development corridor extending from the proposed Arizona Commerce and Trade Center (ACTC) near Casa Grande to Yuma, Arizona will provide access to the Pacific Ocean. With infrastructure including adding an extension of a new ACTC Foreign Trade Zone near Casa Grande could become a major entry and export center of global trade with South American countries.
Mexico cognizant of the opportunities of global trade with Latin America is presently building a new deep sea water port on the western coast of the Gulf of California below San Diego.
To achieve growing Arizona into a major hub of international commerce can only be achieved with adoption of an economic development strategy developed by consensus from all. It will take Arizona government to create the conditions to achieve this hub of commerce by promoting the expansion of Yuma as a new deep sea port of entry and export for global commerce, building infrastructure of added rail capacity from Yuma to Casa Grande with extensions to Phoenix and Tucson and building a Foreign Trade Zone and providing the necessary financial incentives such as industrial revenue bonds, loan guarantees, grants (To receive a grant, an employer must meet certain performance targets and show the economic-development benefits the company provides will exceed the costs of the incentives.), tax credits, sales tax refunds, and a state deal-closing fund, which will be financed by state general funds, to entice businesses to locate in the Arizona Commerce Center.
The purpose of the proposed Arizona Commerce and Trade Center will be to open new markets for Arizona businesses by commerce with the global community by establishing Arizona State international trade offices focusing on opportunities beginning with Brazil, Argentina, Chile and Spain.
Brazil is the most successful progressive and democratic government of Latin Arizona and with the new discovery of a second oil field off the coast doubling its oil preserves, Brazil has already become the economic powerhouse of Latin America. In particular, the economy of Brazil is expanded to include all sectors of a vibrant industrial country.
Argentina adjoining Brazil provides both countries working together to become the "breadbasket" of the Americas.
Chile is unique in agriculture particularly becoming a wine exporter of fine wines comparable to France and Napa Valley. At a higher level of achievement, Chile formerly ruled by dictatorships has become a beacon of democracy enabling and encouraging commerce with the United States.
Spain is now becoming a world leader in advanced technologies and is seeking partners in the United States. In particular, Spain excels in technologies relating to the environment and energy production. Additionally, Spains major exports include chemical products, ancillary mechanical and construction industry products, habitat, horticultural products, wines and oils.
Now with the widening of the Panama Canal, cargo ships have a more direct route to and from the west coast of the Gulf of California where Mexico is planning a deep sea port.
In addition, warming of the oceans will intensify hurricanes and extend the season from June through November in the Gulf of Mexico disabling port operations resulting in international trade seeking safer ports.
Even without raising sea levels, Arizona's access to the Sea of Cortez working with the Mexican government could bring economic development to northwest Mexico and southwest Arizona.
Yuma, Arizona is presently planning on expanding its infrastructure to accommodate its access to the Pacific Ocean.
Today, the Sea of Cortez is 20 miles southwest of Arizona. The demise of the polar ice cap will bring the Pacific Ocean into Arizona and will enable Arizona to facilitate an opportunity to become a player in the U.S. intermodal transportation system by adding marine transportation through a new port on the Pacific side of the Americas and at the upper end of the Sea of Cortez.
For this reason, the Port of Yuma is moving forward to structure an inland port as modeled by eastern seaboard ports.
The mouth of the Colorado River flows into the Sea of Cortez. The area between the United States and Mexico south of San Luis to the Sea of Cortez is 20 miles of marshes that dredged could provide a deep channel to port facilities; however, the flow of the Colorado River as controlled by US Federal agencies determines the depth and at times may leave the entrance into the Sea of Cortez without water sufficient to enable tankers to navigate. With the appropriate lobbying, this could be changed.
Mexico is also embarking on establishing a port on the Sea of Cortez with highway and railroad lines being built northward to Arizona and California.
The prime factor in success wherever a port is located is contingent upon back haul. Cargo users will not use any Sea of Cortez port if once the containers are disembarked there are no containers to load to be hauled back to point of origin or points in between.
A new major international trade port for Mexico located in close proximity to Arizona will provide for thousands of Mexican port construction jobs with high wages and will enable construction workers to move not only into port operations but also to new Mexican companies providing support to port operations.
This could achieve a multiplier of 5 creating jobs in housing, school and retail construction.
The boom in port facilities in Mexico with a U.S. Foreign Trade Zone near Casa Grande, Arizona would facilitate international trade with Latin Arizona.
The proposed Free Trade Agreement of the Americas may be years away but already most member nations located on the Pacific side have entered into bilateral trade agreements with the United States and Latin Arizona. It is this corridor that would be the prime engine to move containers through the Arizona/Sonora port into Arizona where trade items could then be distributed primarily throughout the southwest but also throughout the western United States. In times of hurricanes, this distribution network would expand to provide traffic to areas that were previously served by the Gulf of Mexico ports.
A sea port at the Sea of Cortez could have an significant economic impact on Arizona by enabling Arizona to become part of annually moving more than 15 billion tons of freight with a total value of over $10.1 trillion. As trade volumes increase, the capacity of America's total intermodal transportation system must also increase in order to maintain our nation's economy. The Arizona/Sonora port could position itself to become an integral part of this trade.
While domestic waterborne trade is expected to grow modestly, U.S. international container traffic is projected to at least double from 2001 to 2020 according to the June 2005 Report to Congress on the Performance of Ports and the Intermodal System submitted by the U.S. Department of Transportation Maritime Administration.
Nowhere will this pressure be felt more than at U.S. ports, which serve as gateways for both commercial and military cargo. This proposed port could provide access to the Military facilities located in the Yuma area.
Since the advent of containerization in the early 1960's, ports have had to keep up with significant evolving changes in vessel and shore side infrastructure needs. Container vessel capacities have grown TEU (standard "Twenty Foot Equivalent Unit" steel ocean shipping container) ships to over 8,000 TEU's and next generation containerships with capacities of 9,000 TEUs are already under contract. Private sector railroads, addressing supply chain competition and ports' needs to accommodate commercial and military cargo simultaneously, have employed double stacked trains. Double stacked trains require larger facilities for increased rail traffic.
Introduction of new terminal technologies that enhance and improve just in time delivery processes within the nation's supply chain, a projected doubling of throughput on the system, providing needed maintenance on the current system will require flexibility and massive new investments in intermodal transportation infrastructure.
It is with these acknowledgements of progress these three countries of Brazil, Argentina and Chile have made that make for prime opportunities for Arizona businesses selling products and services to these countries and provides for Arizona businesses to become the sellers and providers of goods manufactured in Brazil, Argentina and Chile to be sold by Arizona businesses.
The Arizona Commerce and Trade Center will be established to enable Arizona businesses to enter new markets using World Bank guidelines to develop partnerships in other countries.
To enhance the Arizona Commerce and Trade Center, the proposed global community partnership will establish economic development offices in growing global economies to create and expedite trade opportunities for Arizona businesses.
The Arizona Commerce and Trade Center will feature co-located data services as well as office space for international commerce companies. By creating co-location space and office locations for companies around the globe, were helping the local economy and driving continued growth.
Above is Part 1 and is a