Protecting Arizona’s Jobs

Economic development and business leaders say other states are making a new push to lure companies away from Arizona. Find out what they think Arizona must do to increase its competitiveness.

Transcript:

Ted Simons:
The Virginia economic development partnership is trying to lure Arizona companies to Virginia. The group is touting the state's low taxes and excellent education system as reasons to relocate. Here to talk about all of this is Barry Broome president and CEO of the Greater Phoenix Economic Council, and Bob Anderson, president of Prisma-Graphic, a print solutions provider that does business worldwide. He met with the Virginia group in May. Good to have you here.

Barry Broome:
Good to be here.

Ted Simons:
Barry, start with you. Are certain businesses being targeted?

Barry Broome:
Arizona's competitive position isn't being maintained and other states that are starting to come in and call on California, historically, are starting to swing through our state. We've asked business leaders as you've been contacted with other states and they've shared their economic package, would you share with us. And Virginia has been targeting the aerospace and the manufacturing sector in Arizona.

Ted Simons:
Has this happened before since you've been here?

Barry Broome:
It has not. And this is the first time we've seen this. We think there are two things that are important to understand. Number one, California has been this magnet for recruitment from states all over the country -- North Carolina, Tennessee, Alabama. And while in California, they're swinging through Arizona and a discussion that's occurring with our businesses is the competitive advantage that Virginia offers over Arizona and I think it's an important moment for us from a policy making standpoint to graduate to competitiveness here in Arizona.

Ted Simons:
Your business was targeted. Talk to us about this.

Robert Anderson:
I think it was targeted because we have very centristic manufacturing company and they're looking for companies that have a high profile and come to Virginia, look at expanding the business to Virginia or moving your business to Virginia.

Ted Simons:
What was the pitch?

Robert Anderson:
I think the pitch is that they -- the most important, they start to talk about the education system. One of the top education systems for high schools and colleges in the nation. They talk about lower taxes, lower sales tax, lower business taxes. And I think quality of the environment for the real pro-business. They want businesses to be there.

Ted Simons:
Was it more a Virginia is this or a Arizona is that?

Richard Anderson:
I think it was Virginia is this, but we're coming here because Arizona has some problems and are you going to stay in Arizona and face the problems or do you want to pick up and go?

Ted Simons:
Is this something you've been hearing from other businesses as well?

Berry Broome:
We've heard that the aerospace sector has been targeted by Virginia and Tennessee and we have the documentation and we're going to share that with policymakers and one of the important opportunities for this is to educate our policymakers on what it takes to build a great economy and in the presentation of which GPEC will make available. They did side-by-side comparisons. Tax ranks, job training, economic development programs and talk to you about building a building. They can provide a building and they can train your people and they have relocation expenses. And the counter to that in Arizona is we don't have those things. We don't have those types of policy achievements here in Arizona and as our competition for jobs increases, it's something that has addressed.

Ted Simons:
What do you tell policymakers, here's what's going on out there. What should we tell them? What should we do?

Berry Broome:
We have a continuing challenge on the budget side. So we have to meet and balance our budget. But while we're meeting and balancing the budget, the question is, is it adequate for what we need to do competitively. If we're 25% below the average in education and 15% below the average in universities, Virginia is pitching a educational model and tax policy needs to be thoughtful too. We did this two years ago with legislators showing them that states have lower taxes on businesses, better economic strategies and improving or better educational systems and going down this path of understanding the economy, small government or getting out of the way of business is not nearly sophisticated enough thinking for Arizona to achieve its rightful position in the marketplace.

Ted Simons:
When Virginia came after you and mentioned lower taxes and education and quality of life, of those three, was there one they really emphasized and thought would get you?

Richard Anderson:
I think if you look at where they push it, it's education. Their workforce is going to be much better educated than what we have currently in our K-12, especially high schoolers that want to be either in light manufacturing, looking for manufacturing jobs, going to trade schools and that type of thing. They have an unbelievable educational program and there's even schooling for doctors and they have a lot better education program there. Their tech schools for science are much -- two of the schools are top in the nations for high schools.

Ted Simons:
Were you tempted at all?

Richard Anderson:
No, you know, I'm a third generation Arizonan. I have 135 employees. My family is here. My -- I have 135 employees' families that are here. I'm not tempted. What I want to see is I want to see Arizona I think we're lost right now and I want us to get back on track and move forward as a -- as both business and government together. Get the distractions away and move forward.

Ted Simons:
The political climate in Arizona, how much of a factor is this?

Barry Broome:
We're not portrayed in the best light and what people are watching right now, the discussion of the boycotts and the budgets and the controversy, we look like a state that's vulnerable and so whereas, we've been a national leader often in job performance and we spend a lot of time being portrayed in a positive light, when that goes in another direction, people see you as vulnerable and if you're going to sew an array of state development organizations with tools and job training coming into Arizona, I'm not surprised they focused on education. We go and talk in a competitive market about our state we try to find where we're strongest and where they're weakest and the educational debate that occurred with this executive had the fact to do with Virginia was strong and our budget problems are still there. 45, 50 kids in a classroom. This is portrayed across the United States and people observing this and paying attention and they're going to set a strategy to move us out of the market position we've been in and Virginia is the first example of this.

Ted Simons:
The headlines that Arizona is attracting and prompting, obviously affecting folks coming here and trying to lure Arizona company as way. How is it affecting you in trying to recruit companies to come here? Harder these days?

Barry Broome:
The solar renewable companies have been expanding and Governor Brewer has done a great job working with companies. I want to be fair and equitable in this discuss. So when we're one on one with a company, we're able to get beyond the hurdles. The feedback from the marketplace is more on the convention side. One of the things that's starting to affect a lot of multinationals are finding it difficult to recruit talent here. I don't know that I could report we've lost business coming here because of these issues. We haven't, but the businesses are starting to raise other questions about our competitiveness and the recruitment of talent for businesses that have come here has gotten more difficult.

Ted Simons:
What's the lesson for Arizona in this?

Richard Anderson:
I think the lesson is really to get our schools back in shape. Get us to be -- not to be in the bottom, 49. But take a look at our tax rate on businesses and reevaluate the sales tax, I think that's going to be a problem. I know right now it's a short term help but long term it's going to hurt competitiveness. People will buy on the internet more. And take away tax revenue to the state. So I'd say let's get everybody focused back on -- let's get businesses going again in Arizona and jobs going in Arizona. Let's focus on jobs and get jobs for people in Arizona and work on that. That's my mantra. Get jobs back at the forefront.

Ted Simons:
Predatory states, lessons learned. What do we have.

Barry Broome:
It's not your philosophy. It's how competitive you are. And Arizona policymakers need to build a data driven exercise on how we're competitive. What's our corporate income tax rate versus competitors. What's our delivery on workforce and educational attainment versus competitors and what's the tax policy for being competitive and move from the populist model that's put us in a position where we're not as strong as we should be and get moving in a new direction.

Ted Simons:
Gentlemen, thanks for joining us.