I recently did a post on GOP ‘trickle down’ tax cuts dug Arizona’s structural revenue deficit hole about a report in the Arizona Republic that makes the case that I have been making for years: Tax cuts have left Arizona short on cash.
This week the Arizona Republic published another economic report that makes the case that I have been making for years: corporate tax cuts and lack of government regulations are not what attracts businesses to relocate (refuting faith based supply-side trickle down GOP tax cuts).
What attracts businesses to relocate to a state is its commitment to a strong education system that produces a well educated and highly skilled workforce. But our lawless Tea-Publican legislature has for years made certain that Arizona performs at the bottom of education in the country. No way to attract business.
The Republic reported, Arizona CEOs see schools as key weakness:
Arizona’s educational system and the workers it produces are viewed as major impediments to better economic growth, a survey of business executives here has found.
Collectively, the executives didn’t see taxes or regulations among their biggest problems, though these have remained popular policy prescriptions.
Instead, nearly three-quarters of the survey’s respondents saw improving K-12 as the most important task for local governments, and 56 percent saw boosting K-12 funding as the state’s biggest job.
Similarly, many of the executives wanted better-trained workers and more funds for higher education without abandoning pro-business tax policies.
[Chamber of Commerce types who always want something without having to pay taxes for it.]
The survey of 400 business executives was conducted in November on behalf of the Arizona Commerce Authority, the Arizona Chamber of Commerce and Industry, the Greater Phoenix Economic Council and Alliance Bank.
The findings from a powerful political constituency helps explain the push in recent months for education reforms in Arizona, a subject that lately has overshadowed tax cuts, a customary favorite at the state Capitol.
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“While the results didn’t surprise me, I was a little taken aback at how strongly the need for investment in education came through,” said Jim Lundy, founding president and CEO of Alliance Bank.
Chris Camacho, president and CEO of GPEC, said the findings show that the business community expects Arizona to put more resources into education, and improve its brand. [Then pay taxes to support it.]
Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry, said the results underscore the need for Prop. 123. [No, it does not.]
“There is a very real skills gap in our workforce. The state needs a K-12 system that will develop critical thinking along with hard skills, like coding, for the economy into which they will graduate,” he said in a statement.
* * *
The survey found that while executives were generally optimistic about their near-term business prospects and see Arizona as an improved place for commerce, many still see the state as falling short of their ideal. Only two in five of these leaders thought state legislation and regulation was on the right track for a healthy business climate.
Half of those polled picked the education system as a challenge to doing business in Arizona. The quality and availability of the workforce came in second with 42 percent. State government, a broad label that didn’t specify whether it related to things like leadership or policies, came in a distant third with 27 percent.
In a sign of the competition Arizona faces elsewhere, a report accompanying the survey noted that in 2014 CEOs in talent-rich Silicon Valley put educational improvements No. 2 on a similar list of needs.
The survey asked respondents to choose the top three benefits of doing business here. Two-thirds agreed quality of life was in that category. The state’s climate came in second with 56 percent. A low cost of doing business came in third with 47 percent.
Just 14 percent picked top-notch universities or access to skilled labor.
Only 2 percent said a negative image of Arizona made business challenging here. Even so, enhancing the state’s image was the most popular choice to have a positive impact on Arizona business, with 67 percent.
Increasing the flow of graduates with backgrounds in science, technology, engineering or math was next with 61 percent.
From there, the executives splintered quickly. Thirty-four percent picked immigration reform and 32 percent picked increased access to venture capital, something woefully lacking for years. There were 21 percent who supported either tax increment financing, lower taxes generally or reduced regulations.
Many executives gave Arizona’s labor pool credit for a willingness to learn and for their personal values and team attitude. At the same time, similar numbers of the executives noted labor pool weaknesses in math and science skills and in communications.
Overwhelmingly, the executives said local government’s biggest role could be in improving education, with 74 percent choosing that. Related to that, 47 percent said local government could improve workforce development. Streamlining the business permitting process was third at 40 percent.
At the state level, 56 percent said increasing funding to K-12 education would do the most to improve the business climate for their company. Increasing the funding for higher education came in third with 43 percent.
Between those two, pro-business tax policies came in second with 46 percent, suggesting that whatever clear call for better schools exists, it also comes with a desire to pursue lower taxes as well.
[Again, Chamber of Commerce types who always want something without having to pay taxes for it.]
Nearly 70 percent of respondents said the K-12 system was worth their personal involvement. After that, shaping a path to legal-immigration status came in a distant second with 36 percent and comprehensive tax reforms garnered 31 percent.
* * *
The survey’s respondents came from a cross-section of industries, with finance-related companies representing the largest single segment at 18 percent. More than 60 percent came from businesses reporting less than $10 million in revenues and more than half from companies with 20 or fewer employees. Eleven percent had 500 or more workers and 18 percent had more than $100 million in revenues.
Lundy said he would like to make such surveys of business leaders an annual feature.
The Republic’s Laurie Roberts noted the cognitive dissonance among Chamber of Commerce types and their GOP bootlickers in state government who make public policy. Roberts: Want to grow the economy, Gov. Ducey? Then grow the schools:
Arizona’s CEO’s are trying to clue in our leaders as to why our beautiful state isn’t a magnet for economic growth.
Noooo, it’s not our taxes, as the Arizona Legislature has insisted for lo’ the last two decades. The Legislature has cut taxes to the tune of $4 billion over the last 20 years, according to an analysis by economists with Arizona State University’s W.P. Carey School of Business. That doesn’t count already-approved business tax cuts still to be phased in over the next few years.
Noooo, it’s not burdensome government regulations, as Gov. Doug Ducey seems to think. Though there’s nothing wrong with streamlining regulations if they’re overly burdensome, that doesn’t seem to be much of an impediment to luring good companies to Arizona.
Our problem is our lousy commitment to public schools.
According to a survey of 400 Arizona business executives, K-12 education is holding us back. Fifty six percent of them said boosting K-12 funding would be the best way to improve the state’s business climate.
That’s not exactly a stunner, given that Arizona has made among the nation’s deepest cuts to public education since 2008.
Ducey and the political set point to Proposition 123 as if it’s the answer to Arizona’s school funding woes.
That negotiated plan would temporarily fund annual inflation for schools out of the proceeds of the state land trust for many districts, while forcing others to raise local property taxes.
But it does nothing to reverse some of the nation’s deepest cuts to public education during the Great Recession. We’re still down 23 percent in total state per-pupil funding compared with 2008 — the nation’s worst, according to a recent study by the Center for Budget and Policy Priorities.
And I see no effort to start building up school budgets.
Ducey has called Prop. 123 a good start but he hasn’t pledged to boost school funding beyond that. Instead, he’s said yet another tax cut is coming our way.
Listen, governor, to the executives surveyed by the Arizona Chamber of Commerce and Industry and other business groups.
“While the (survey) results didn’t surprise me, I was a little taken aback at how strongly the need for investment in education came through,” Jim Lundy, founding president and CEO of Alliance Bank, told The Republic’s Ron Hansen.
“There is a very real skills gap in our workforce,” said Glenn Hamer, chamber president and CEO. The state needs a K-12 system that will develop critical thinking along with hard skills, like coding, for the economy into which they will graduate.”
Meanwhile, Ducey’s proposed budget for next year contains scant new funding for K-12 education – though there now is a legislative plan, at least, to restore $28 million of the $30 million cut last year to the state’s Joint Technical Education Districts. Meanwhile, the governor has proposed restoring [only] $8 million to universities. This, after cutting $99 million this year from a university system that already had endured the nation’s deepest cuts since the Great Recession.
Oh, and the community college system was zeroed out in last year’s budget. That’s right, zero dollars.
Gov. Ducey is trying to brand himself as the “Education Governor,” and our lawless Tea-Publican legislators are all breaking their arms trying to pat themselves on the back for restoring 28 million to JTED funding, after they all needlessly voted to cut $30 million out of the budget last year. Roberts: Ducey rescues technical education? Wait…what?
The governor’s budget proposal did not propose restoring the funding cuts. Rather, it proposed a three-year competitive grant program that would have distributed $10 million a year. The Governor’s plan was rejected by state legislators, even members of his own party.
Tea-Publican legislators taking credit for partially restoring the JTED cuts is like taking credit for putting out a fire that you intentionally started by arson. That would only make sense to a criminal mind.
Don’t fall for it. Arizona Tea-Publicans are dedicated to dismantling public education and replacing it with a for-profit privatized education system. They are not entitled to any credit or even the benefit of the doubt as a result of their bad faith. They all need to be removed from office if Arizona is ever going to start improving the lives of its citizens.