These days you're hearing announcements, calm in tone but frantic in motivation, about the latest round of threats to federal funding for the Corporation for Public Broadcasting. Should we be worried? Timothy Noah has seen it all before, and has an interesting analysis of the recurring situation.
The package of tax cuts working its way through the Arizona Legislature is important for business recruitment and retention, but no more so than maintaining a high quality educational system, says the head of Arizona's leading business organization.
Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry, said in an interview today in Phoenix that executives of a lot of companies looking at Arizona will say that they like low taxes and little regulation, but that if the higher education system isn't top notch, "we'll send you a postcard from Alabama."
Hamer said Gov. Jan Brewer's economic development package, expected to be revealed as early as next week, will include important business tax cuts. He said just as important will be its enhancement of a new economic development arm, the Arizona Commerce Authority.
There's no way to tell how many jobs can be created as a result of attracting businesses to the state with the tax cuts, Hamer said, but he said it should make up for the 300,000 jobs lost in the recession over the last threee years.
He called elements of the tax-cut package "a game changer for us" in terms of attracting businesses.
A critic sent me an obviously unproofread review in which his software's spellchecker had changed the name of (admittedly obscure) conductor Fuat Mansurov to "Fat Manure." I do wish people would (1) read their material before they send it into the world and (2) put far less faith in spellcheck and autocorrect features. I learned my lesson the hard way many years ago when I wrote an article about conductor James DePreist and didn't notice that the software had changed every mention of his name to "DePriest." From that moment, I came to regard most of Word's automated functions as little more than, well, fat manure.
Glenn Hamer, president and ceo of the Arizona Chamber of Commerce and Industry, will discuss the state's economy and incentives for getting it moving on Arizona Week Friday.
The program will focus on state efforts at economic development, including a package of business tax cuts and Gov. Jan Brewer's soon-to-be-announced economic development package. Her spokesman said today that package could be unveiled as early as Monday.
After Hamer is interviewed, economist Jim Rounds will appear to offer analysis of state economic development efforts. Rounds is senior vice president and senior economit at Elliott D. Pollack & Co., an economic and real estate consulting firm in Scottsdale.
Republican leaders in the Arizona Legislature say their proposals to cut business taxes will make the state more competitive and encourage job creation.
But will they? Depends on whom one talks to and what information one considers. Hence, the answer is definitive: yes, maybe, no.
First, lower taxes are a good thing, in general, and they certainly are part of the mix of what businesses consider when choosing location and making expansion and hiring decisions.
But they are not the be all to end all, according to numerous economists. Let's quote just one, Dennis Hoffman, director of the L. William Seidman Research Institute at Arizona State University. In a report he and colleague Tom Rex wrote in November 2008, they said:
"Nearly any position on the relationship between taxes and economic performance is supported in the published literature. However, the bulk of the modern literature indicates that taxes have only a small effect on economic growth."
The report goes on to say: "Generally, tax burdens must be far out of line with competitor regions before much of an effect on the economy can be measured. ... In general, tax policy is an inefficient way to stimulate the economy. Investment in infrastructure and education has been shown to have a greater effect on economic growth."
By anecdote, one can surmise that tax cuts have had little effect on national job growth. It has been widely reported that the Bush administration tax cuts of 2001 and 2003 were followed by creation of far fewer jobs than the administration projected. Additionally, those tax cuts -- and more -- remain in effect today, and job creation can be described as lagging at best, anemic at worst.
Discussion and study of the issue is important as the Legislature stands ready to approve the tax cuts, and Gov. Jan Brewer is poised, perhaps, to call a special legislative session to consider a comprehensive economic development package.
Arizona Week is exploring for Friday's program the state Legislature's package of business tax cuts, working their way through committees and to the floors of both chambers soon.
A series of bills, with slight differences in the House and the Senate, would reduce what multi-state corporations must pay in states taxes on their sales, reduce the corporate income tax rate and reduce property tax rates on business real estate and business equipment. The reductions would be phased in over the next several years.
The idea is to create a business-friendly atmosphere that will attract new businesses to the state and more jobs. It's a key part of Gov. Jan Brewer's larger economic development strategy, to be led by the state's newly formed Commerce Authority.
The Joint Legislative Budget Committee analyzed the the bills and estimated that at full implemented, six years from now, they would have reduced corporate taxes paid to Arizona by $475 million total. That's 5.5 percent of the current state budget.
The committee has not released estimates of numbers of jobs that would be created -- and thus increased state revenues from them and more business in Arizona -- by implementing the tax cuts.
We will detail the tax cuts package, what it means for businesses and seek expertise for Friday's program to show what kind of an ROI -- return on investment -- there would be to the state for these cuts.
