Sunday, May 29, 2011

Expert: Recovery falls short of target

Barry Broome, president of the Greater Phoenix Economic Council, often hears that Arizona's economy is on the road to recovery.

"Big deal," he says.

In an economic forecast presented by the Gilbert Chamber of Commerce earlier this week, Broome shared an up-and-down outlook on the state's financial future.

Optimists may cheer upon hearing that Arizona could regain nearly 300,000 jobs by 2015, but when Broome takes a deeper look, he doesn't like what he sees.

The state's recovering economy is even more dependent on retail, real estate and construction than it was before the recession, and those industries will continue to be the state's breadwinner in 2014, Broome said.

"We're creating jobs that won't pay for themselves again," Broome said. "The economy we had in '04, '05 and '06 - I don't want it back. I'm not interested."

Broome's organization focuses on attracting more sustainable industries to the Valley.

In Gilbert, that includes bio-medical companies in areas such as nanotechnology, pharmaceuticals and medical equipment, said Dan Henderson, the town's business-development manager. He also made a presentation at the luncheon.

Although Arizona lags far behind bioscience leaders such as San Francisco and New England, Henderson said the current fiscal year has been Gilbert's most successful for business development since he joined the town four years ago.

While Henderson works to bring quality jobs to Gilbert, Broome is fighting for a better business environment throughout the state, which helps individual communities market themselves.

This year, the Legislature passed two GPEC-supported bills that the organization said would create a more favorable business environment and make Arizona more competitive.

House Bill 2001, passed during a special session in February, established the Arizona Commerce Authority and reduced corporate-income taxes. Broome called it "the best bill that's ever been passed in Arizona for the economy."

The legislation also provides a tax credit for companies that are either expanding or making a new capital investment within the state, Broome said.

Within urban areas, a company must generate at least 25 new jobs and $5 million in capital investment to qualify.

The bill reduces Arizona's corporate income tax, a move that will improve the state's national ranking from 25th to eighth place in that category, Broome said.

GPEC also supported Senate Bill 1041, which would have reduced property taxes for certain businesses.

The bill easily passed the Legislature but was vetoed by Gov. Jan Brewer, who said the incentive would "allow one industry to jump the line in front of other industries."

But Broome said it would have improved the state's regional competitive ranking and could have helped generate up to $371 million in new revenue for the state over 10 years.

Despite his disappointment in the veto, Broome praised Brewer for her support of business-friendly legislation.

"Relative to the history of gubernatorial leadership . . . Jan Brewer's done a better job on the economy than any governor in the last 50 years," Broome said.

Still, the state faces stiff competition from several "star players" throughout the Mountain West region, including Texas, Washington and Colorado.

To keep up, Arizonans must expect more from their political leaders instead of growing complacent with the status quo, Broome said.

There are 90 communities in Arizona with an unemployment rate between 18 percent and 35 percent, he said.

"The idea that we're in this comfort zone relative to our future is one of those things we have to boot out."

by Parker Leavitt The Arizona Republic May. 28, 2011 12:00 AM

Expert: Recovery falls short of target

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