New Arizona Commerce Authority starts tackling unemployment - East Valley Tribune: Business

New Arizona Commerce Authority starts tackling unemployment

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Posted: Thursday, September 23, 2010 4:19 pm | Updated: 10:57 pm, Fri Sep 24, 2010.

Arizona is suffering financially because of a "disconnect" between the business community and the Legislature, Jerry Colangelo said Thursday.

Colangelo, former sports executive, said there is a "lack of a game plan where everyone is on the same page and everyone's moving in the right direction toward the objective of winning." But Colangelo, speaking at the first meeting of the Arizona Commerce Authority, said there is one bit of good news.

"There's only one way to go, and that's up," said Colangelo, named by Gov. Jan Brewer to co-chair the new public-private authority with her. "There's plenty of space here for us to be very, very successful."

That first meeting of the authority comes just two weeks before early ballots go out for the general election where Brewer, who became governor in January 2009, hopes to convince voters to give her a full four-year term. It also comes as she is under increasing fire from Democratic contender Terry Goddard, who has tried to make the state's economic woes - and increasing unemployment since Brewer took office - the focus of the campaign.

Brewer said, though, this is not some last-minute political gimmick to help her campaign.

"We have been working hard and we have delivered in regards to the economy, bringing 34 new businesses into the state since I've been governor, 7,000 new jobs, $1 billion in capital investment," she said. "We haven't been sitting on our heels."

But figures from the Arizona Department of Commerce show that, even with those efforts, the state continues to lose jobs.

As of last month, the number of Arizonans working was 108,300 less than when Brewer took office. And three-fourths of the jobs lost were in the private sector.

Brewer, however, said she is reversing policies put in place by her predecessor, Democrat Janet Napolitano, who quit to take a job in the Obama administration. And the record shows the state had lost more than 225,000 jobs from its peak in December 2007 by the time Napolitano left.

Aside from a freeze on new state regulations, Brewer created the authority by executive order earlier this year as her bid to create that link between the government and business.

"We know that government doesn't create jobs," she said. "What I've tried to do is reach out to the business community that's been very successful in Arizona and are well-recognized throughout the country to come together to work with us to show us and lead us in the direction so we can have economic prosperity. You go to the people that have a track record to show us how to do it."

Colangelo said that cooperation is overdue.

"I think the business community knows how to get it done," he said. "They're successful business people, they get it, they understand it. The cooperation and the partnership we need is with the Legislature to give us the tools to help get us to the finish line."

Eileen Klein, Brewer's chief of staff, told authority members that the governor is providing some of those tools - including some she was instrumental in taking away in the first place.

During the last two years, for example, lawmakers, with the backing of the governor, drained a special fund which was set aside to provide job training grants to companies moving here and those expanding their workforce. That "sweep" of more than $25 million came despite the fact the fund was financed by a direct tax on businesses based on the number of workers they had.

Klein said those raids have now stopped and there now is $13.5 million available.

On top of that, Klein said Brewer is giving $10 million in federal stimulus funds to Science Foundation Arizona to once again help it provide grants.

That maneuver, too, reverses two years of actions where lawmakers, who had committed to providing funds the agency used for contracts on research. But Klein acknowledged that the stimulus dollars are a one-time solution to an ongoing need.

One of the things some elements of the business community have been seeking from the governor and lawmakers is lower taxes.

Economist Dennis Hoffman of Arizona State University said studies show that, overall, Arizona's tax burden is about average of all the states. But he said that doesn't show the whole picture.

For example, Hoffman said, the state's property taxes are considered "pretty competitive." He said, though, the system is more friendly to owners of residential property than it is to corporate property owners.

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