House Republicans unveil plan to create jobs - East Valley Tribune: News

House Republicans unveil plan to create jobs

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Posted: Tuesday, January 5, 2010 4:09 pm | Updated: 3:40 am, Sat Oct 8, 2011.

Arizona House Republicans Tuesday unveiled a legislative proposal aimed at attracting and retaining more base industry employers - manufacturing, research and development, and mining - through job creation and training programs, increased incentives and tax relief for large and small businesses.

House Republicans tout business tax cuts

Arizona House Republicans Tuesday unveiled a legislative proposal aimed at attracting and retaining more base industry employers - manufacturing, research and development, and mining - through job creation and training programs, increased incentives and tax relief for large and small businesses.

House Republicans tout business tax cuts

The Arizona Economic and Job Recovery Bill will be introduced next week at the start of the Arizona Legislature's new session. The legislation is based on a study completed by Scottsdale-based economist Elliott Pollack.

House Speaker Kirk Adams, R-Mesa, outlined the legislation outside Boeing Co.'s plant in northeast Mesa. The legislation would be phased in over four years starting in fiscal year 2012.

"Since December 2007, we are approaching nearly 300,000 lost jobs (in Arizona)," Adams said. "No state has lost more jobs than Arizona with the exception of the state of Michigan. Something is going wrong in our economy and clearly it is incumbent upon us to do whatever we can to get it back on track."

Tony Ham, Boeing's Mesa site leader and director of operations, said the company employs more than 4,700 people at the plant and impacts more than 570 companies, from small machine shops to large industry, throughout the state.

"Speaker Adams' support of business is critical as the cost of operating has risen in a strained economy, and many states are doing all they can to entice employers to relocate to their state," Ham said.

Mesa Mayor Scott Smith said state tax and economic development policies play an important role in cities and towns landing large employers like Boeing.

"We don't have the tools as cities and towns to close the deal. So we're at risk of not only not being able to gain jobs, but in keeping jobs," he said.

The legislation calls for the creation of the Arizona Quality Jobs Program, which would provide cash rebates to base industry companies that create high-wage jobs, Adams said. The rebate program would be funded through current withholding taxes paid by the employers, he said.

"This model is based on successful models in states like Arkansas, Kansas, Missouri and Oklahoma," he said. "The Oklahoma Quality Jobs Program has created more than 339,000 jobs since 1993 with a payroll exceeding $11 billion. That's the kind of success we hope to achieve in Arizona."

In addition, the legislation would establish the Arizona Job Training Program, which would replace the state's job training program that was suspended to provide more money to cover the state's budget deficit, Adams said. Unlike the suspended program, the new program would be funded through withholding taxes paid by employers seeking job-training money, he said.

"We believe we need a new, more robust and enhanced job training program to replace the existing one, but it also needs to be one that is more responsive to base industries and one that does not impact the (state) general fund," he said.

The legislation also would create the Arizona Deal-Closing Fund to provide incentive money to attract large employers.

"Closing funds are necessary to close the deal and secure high-wage jobs, and the resulting benefits to our economy and state coffers that come with that," Adams said. "At least nine other states have similar funds that are used to attract large employers and base industry, and the jobs that come with it,"

Federal stimulus dollars could be used to get the fund started, he said.

"That is at the governor's discretion, and we believe she will be supportive of this idea," Adams said. "We look forward to talking to her in more detail about the use of those stimulus funds for this purpose."

The legislation also would alter the state's business tax policy by rolling back the corporate income tax rate from 7 percent to 4.5 percent and further decreasing the state's business property taxes.

"Additionally, the legislation contemplates eliminating the state property tax beginning in 2012 phased in over a four-year period to 2016," Adams said.

The legislation would modify the state's Enterprise Zone Program to allow base industry companies to participate. It provides tax incentives for job growth in specific areas.Also, it would help small businesses by providing across-the-board reductions in the individual income tax, which is paid by most Arizona business owners and individuals in the state.

When it comes to bringing in major companies that offer well-paying jobs, Arizona has not been in the game "for quite a while," Pollack said.

"Essentially most major companies in town are essentially grandchildren of companies that came here in the 1950s and 1960s," he said. "We have to change that. What do those base industries do? They bring in above-average wages, and these wages mean a multiplier effect is higher. For example, for every one job created at Boeing, a total of 3.2 jobs are created in the economy as a whole. For a retailer, the multiple is about half that much and for tourism it's about half that much, and that's because the level of wages is lower."

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