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Local business leaders will discuss what they would like the state legislature to do for the business community in the upcoming legislative session. Among the guests, Todd Sanders, president and CEO of the Greater Phoenix Chamber of Commerce and Farrell Quinlan, state director for the National Federation of Independent Business in Arizona.

Ted Simons: Coming up next on "Arizona Horizon" -- we'll hear about the business community's priorities for this upcoming legislative session. And we'll see how a Gilbert man made his dream of utopia a reality. These stories next on "Arizona Horizon".

Narrator: "Arizona Horizon" is made possible by contributions from the friends of Eight. Members of your Arizona PBS station. Thank you.

Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. Arizona senators John McCain and Jeff Flake today voted against advancing a bill that extends emergency unemployment benefits. The bill would restore unemployment insurance to , Arizonans who lost those benefits last month. After today's vote, a McCain spokeswoman said the Senator did not support the bill because Harry Reid wouldn't allow amendments that offered other ways to pay for the benefits. Tomorrow, on "Arizona Horizon," we'll hear how the loss of extended unemployment compensation is impacting Arizonans. The state legislative session opens next week, and local business leaders are getting ready to present their agendas to state lawmakers. Here to discuss what they would like to see from the legislature are Glenn Hamer, President and CEO of the Arizona Chamber of Commerce and industry, Todd Sanders, President and CEO of the greater Chamber of Commerce, and Farrell Quinlan, state director for the national federation of independent business in Arizona. Thank you very much for joining us.

All: Thank you.

Ted Simons: Glenn, we'll start with you, in general, what are you looking for?

Glenn Hamer: Well, Ted, first of all, we need to reflect that we have made a tremendous amount of progress in the state over the last three or four years. When you take a look at the big deals that we've been landing like Apple, the state really now is starting to fire on all cylinders whether it comes to the economy. So, we're going to want to see it, a continued progress when it comes to certain things of economic development. We'll continue to work on tax reform, regulatory reform, and legal reform, but, an area where you are going to see an increase, an increased emphasis from the business community will be on, really, working to improve our educational system, and our K-12 system.

Ted Simons: I want to get back to that in a second but first, as far as the Phoenix perspective, what are you looking for?

Todd Sanders: Glenn is right, there has been a lot of progress here. If you look what the ACA has done in the past year, 15,000 new jobs, 1.9 billion in new investment. We were going to challenge them to invest in long-term solutions that will not only take those companies like Apple and help them to grow, but attract new companies here, so education is going to be key. K-12, also, early childhood education, as well as the universities.

Ted Simons: As far as small, independent businesses, what are you looking for, and before you get there, what is an independent business? Give us a definition?

Farrell Quinlan: Well, somebody who is most likely not part of, of a national chain, so, it would not be somebody who has a national marketing budget behind them, but there are a lot of franchisees, someone who has not traded on an exchange, and somebody who, who, the owner signs the front of the check, for their employees and, and, and it's usually some -- a company of 100 or fewer employees.

Ted Simons: With that in mind what are you looking for?

Farrell Quinlan: I guess the first thing we're always looking for, regardless of the session, is that the Government should do nothing that harms business. Sort of a Hippocratic oath for lawmakers, and so, we're hoping that that's the case and, and in many sessions, that's the best that you can hope for, but this year we're hoping to consolidate the gains we have made, on, on some of the, some of the tax changes that happened a couple of years ago, didn't happen. They are just now coming into place. Some of the property tax and income tax reductions on the corporate side, and so we're hoping to, to zero in on some of the regulatory issues, about making sure that Arizona truly is welcoming to small business on the regulatory side. And hopefully, do no harm.

Ted Simons: You mentioned tax reform when I asked you for what you were looking for from the legislature. Tax reform in what way?

Glenn Hamer: Well, Ted, Farrell Quinlan made a point. A lot of the tax reforms we worked on, this is property, corporate income, and you name it. Business equipment, and are scaling in, there is additional things that we need to do, we're, we're in the game when it comes to a lot of these major investments, but there is still some things that we could work on, particularly when it comes to, to manufacturing type jobs, where the compensation isn't just from neighboring states, but it's, it's globally, so, we're going to be, you know, we have our big legislative forecast launching in a days, and we appreciate you are going to moderate the legislative panel. We're going to have some things that we'll be asking the legislature to do to make the state more competitive when it comes to the high tech, high-wage jobs.

Ted Simons: We hear about the commerce authority and the success in bringing business and jobs here. What kinds of businesses are coming here? What kind of jobs of course and are they the jobs that will help to grow Arizona to more than just a place where people are cashing paychecks? How about cashing good paychecks?

Todd Sanders: You bet, and that's a big focus for us. When we look at what we're doing in terms of the Phoenix agenda, part of that is how do we keep companies here? How do we get them to grow and get them to create those jobs? I think when you look at what the ACA has brought in with those 15,000 jobs, they are across the board. And there is a lot of quality jobs that are a part of that. The key for us, and I'm sure that, that Glenn and Farrell were talking to their members, is how do we, how do we feed the pipeline? Do we have a workforce? Most of my members will tell me, the biggest issue is they cannot find folks to fill the jobs. When I think about the legislature, we really need to think about that, otherwise they are in and out of the state.

Ted Simons: Are you seeing that with smaller businesses, fFarrell, that there are not enough qualified people here to fill positions?

Farrell Quinlan: Well, I think that it all depends on the mix. There is certain, you know, in the construction area where you have certain skills that you need to have, and in the high tech area, or the highly skilled area, you need that, that workforce that has the skills and the training and the certifications. So, you do see some of that in pockets, but, I think one of the things that, that we really would like to see here is, is, is basically, more certainty when it comes to the things on the Federal side. And, and I think that that's helping hold us back, and the entire national economy has a wet blanket on it, with the health care law and other things that are coming out of Washington. And, and I think that Arizona is traditionally has outpaced the nation when it comes to growth, and right now, when it comes to unemployment and other measures, we're lagging in the, the key indices that traditionally we completely outpace the Americas. So, I think that, that hopefully, we can get some more certainty at the national level, and some of the great things that we've been doing here at the state level can, can, actually, kick in.

Ted Simons: Quickly, is the health care law, the wet blanket, or the fight over the health care law, and other fights going on, in Washington, is that the wet blanket?

Farrell Quinlan: Well, I think that, that there are real, in your, in your kitchen, in your home, impacts that this is happening to Arizonans and employers, and employees. This is not a phony issue. And, and I think one of the ideas that you are drawing attention away from, from the, the Obama care issue, are not, or drawing attention to it. And I think the attention will be there when, when, when -- independent, independent, or, or folks, folks, a lot of the small business people had their own individual plans are being dropped, wait until, until the, the employer mandate kicks in next year, where a lot of employers will just drop all their employees all together and throw them into the exchanges. And that will be, will be hearing a lot of that, and that's not a made up or phony issue. That's real, and it's not something that a P.R. campaign can't fix it. So, that's something that's going to be a problem going forward for this state and the country.

Glenn Hamer: And, and his points are well taken. I want to piggy-back on something that Todd said. We have to continue to make progress at this stage, particularly where we have industries that are producing good, high paying jobs, and one of the areas we are going to focus on, we have been able to get tax reduction, in every different area and, and we're going to work very hard, with other chambers in the state on insurance premium tax reduction and, and that's one area that we have not been able to make progress over the last several years. And the state has been able to still achieve some really, really big job gains from State Farm and other companies. Despite that, we want to make ourselves more inviting. But what Farrell Quinlan said, there is a theme. We're doing some incredibly good things as a state. Reg reform, tort reform, tax reform. What's happening in D.C. has not been positive. The affordable care act is one example of it, and the environmental regulations are another example. It's holding back our economy.

Ted Simons: Was Medicaid expansion, or restoration if you will, was that a problem for Arizona?

Glenn Hamer: Well, we feel it would have been a problem if we did not achieve the restoration, on a number of different angles. One, one being because Arizona's passage of proposition , it, it could have caused an extraordinarily difficult situation for our state's budget, if the state Supreme Court had ruled that, that the state had to cover that. And we were all, also concerned about what we call the hidden health care tax. The cost shifting that occurs when, when claims are not covered. Uncompensated care is clearly has been a very serious and significant problem, and we believe that, that the, the Medicaid restoration will, will help. Both in terms of putting in some sort of downward pressure on private insurance rates, as well as to help relieve some of the uncompensated care issues that, that, that our health care providers have faced.

Todd Sanders: There has been a chilling effect by, through the, the ACA, with regard to the small business issue, we want to hire folks, and there is so much uncertainty, things change, almost on a daily basis with regard the law and, and it does create a chilling effect. So, I think, to the question that you asked, I think it's both. It's both sort of the rhetoric and the practical nature of what's been passed. You are talking 20 percent of the economy. It has huge ramifications, and businesses are being impacted by it.

Ted Simons: The argument goes for the ACA and for the Medicaid expansion slash restoration, that, that if you have folks not paying as much, and we're talking individuals, not in business, but, but the consumer, if you will, not paying as much for health care, or disposable income, buying more, and means more jobs, and better for industry, and better for business. Is that valid?

Todd Sanders: Well, I think that it's valid if, if you take it at that level. The problem is the details on how we get there. The structure that we have, currently, I don't think, is achieving that goal today. Maybe in five years it will look differently, but today, I would not say that's the case.

Ted Simons: Quickly, as far as incentives are concerned, I know that for smaller businesses, they see incentives, for some of the bigger corporations, not too pleased. Where do you stand on this and where do you think that the state should stand on incentives to attract and retain business?

Farrell Quinlan: I think the greatest thing the state could do would be a broad-based fair and low tax rate environment. And I think that we need to move towards that instead of finding certain fashionable or favorite industries this session, and go and take care of that one. In the next session, take care of the next one. If you do that, you have there, you have this tax system that's incomprehensible and is unfair. So, whenever you hear about reform of the tax code, that's what we're talking about, is getting rid of all of these special deals. And that would be the best way to go.

Ted Simons: Special deals, is that you how you see some of these incentives?

Glenn Hamer: Not the incentives that we have. He is right, that the, the most supportive thing that we could do to improve the state's economy is to make sure that we have an outstanding tax code, corporate personal income property. But, when it comes to a lot of these companies, that, that could site their plans anywhere in the country if not anywhere in the world, these other tools are very important. When Texas puts down its arms and closes out its, its, perhaps, 200 million or so deal fund, tens of millions, then Arizona, you know, might want to look in that direction. And, and I don't believe that we should unilaterally disarm. And I really believe that, you know, our Arizona commerce authority and Sandra Watson have done a very good job in a responsible way to use the different tools and to use our dramatically improved tax climate to land these big-ticket companies that all Arizonans could feel proud of.

Ted Simons: The concept of incentives or any other attraction, downtown Phoenix, mid-town Phoenix, which is kind of waiting for a resurgence here, how far do you think that the legislature can, should go?

Todd Sanders: Well, as far as, as far as downtown Phoenix is concerned, I think that you are seeing, for instance, look at downtown Phoenix today versus five years ago with Arizona's future. That's changed what downtown looks like. When you think about a specific area of the state, I don't know that necessarily we should look at incentives that way, but I think Glenn is right. There are certain areas, certain industries that we need to bring to the state, when you talk about quality jobs. And we don't live in a vacuum. We live in a competitive regional and global environment, and so when you think about that, like, like Sandra and her team is doing in a strategic way, I think it makes sense, and I think the legislature can continue to make sure that as these things come up, and we look at this industry might make sense for us, to at least study that and see is this from a policy perspective somewhere that we want to go.

Ted Simons: What happens to, let's say, mid-town Phoenix? When all of a sudden you hear Chandler is doing this and something is happening out there in Peoria, and we would like to see that in mid-town Phoenix. I mean, how do you work that dynamic?

Todd Sanders: I think on the city side a lot of that has gone away in many ways. And so, I think that, that, that seems to be the case probably maybe earlier, and maybe in the 90's, and that's, that's gone, by the wayside. I would not say totally gone, but it's a statewide concern now.

Ted Simons: As far as independent, smaller businesses, the image of Arizona. The factor in terms of doing business here, whether it's attracting and retaining or just doing day-to-day business, what's kind of impact?

Farrell Quinlan: For small businesses, Main Street business, it's fine. Arizona's weather and, and our, our general pro-business systems and taxes and, and regulation, I don't think -- I think it has been overblown that Arizona has a black eye, and I think that, that that was made many years ago, but, I don't think that, that it's really a driver right now.

Ted Simons: Do you agree with that?H

Glenn Hamer: Absolutely. Five degrees. And, and my hometown of Yorktown heights, New York, you know, D.C., Chicago, this is a great place to live. And we have a very favorable business climate. And, and something that's important here, Ted, it's durable. This has been going on for more than 20 years. We've been making a lot of progress, and all of these different areas, so, this is not -- this is not the case of a legislature change, changes, or Governor changes and, and we lose these policies. I would argue in the last three or four years, under Governor Brewer, we have really put the pedal to the medal. But Arizona is open for business and, and our future is very bright, and we have got a great, a great weather climate and business climate.

Ted Simons: And yet migration numbers are not what they used to be, and obviously, there are other factors surrounding that. Is that a concern? The old standard, I should say, is that Arizona's growth industry is growth. And it's got to be better than that, doesn't it?

Glenn Hamer: We always want to make improvements. It's nice to have great, great weather and, and just a great quality of life. But, but, you know, we're certainly not resting on that, and that's why you hear from Todd and Farrell and the rest of the business community. Wire always going to put pressure to make this a better state.

Ted Simons: That's a good point. Is the business community, do you think, putting more pressure on the legislature to maybe side step the more controversial, some might call wacky legislation and get down to serious business?

Todd Sanders: I think that the challenge for us is to make sure that we are, we are going in that direction, and I think that we are going to, to challenge the legislators to do that. There is a lot of work to do, so for instance, on the education front, we have not tackled transportation, something on the table, to do that in a thoughtful way, so we don't exclude the enforcement side, so we'll have to challenge the lawmakers to, to move away from some of those other issues and focus on really what's going to move Arizona forward and keep us on that trajectory.

Ted Simons: Do we have the infrastructure, do we have the wherewithal, if you will, to pay for some of these improvements?

Farrell Quinlan: Well, that's one of the issues that, that I wonder, as the years go out, especially the Medicaid expansion, we're all betting on Congress and Washington keeping the pledge of paying for up to 90 percent of the new costs. And I don't believe that. I don't think that anyone believes that's going to occur, so the question is, that money has to come from somewhere. Either we kick people off the Medicaid rolls or eat into education, some of the things that, that we have heard, that are high priorities. It's one of those problems that we have a, a structural deficit still in the next couple of years. And so there is not going to be a lot of new spending that can occur in Arizona, so we'll have to, have to work with what we have.

Todd Sanders: Unless they are growing the economy in the right way and the revenues come in as a result of that growth. So, that you move away from that structural --

Farrell Quinlan: That would be great.

Todd Sanders: And I think that's the goal.

Ted Simons: And, and good stuff? Got to stop it there. We could go on for hours. Good to have you here. Thanks for joining us.

All: Thank you.

Todd Sanders:President and CEO, Greater Phoenix Chamber of Commerce; Farrell Quinlan:State Director, National Federation of Independent Business in Arizona;

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