January 26, 2005
Gov. Janet Napolitano will be touting tax breaks today in California — breaks that do not yet exist — in her bid to get Intel to expand its operations in Arizona.
Napolitano is set to meet with Paul Otellini, the company’s newly installed president. Noah Kroloff, her policy adviser, said the governor believes it is important to convince Otellini, who is now in line to become Intel’s chief executive officer, how va lued the company is in Arizona.
Kroloff said, though, the trip is more than a meet-and-greet.
"We know that Intel is looking seriously at where to make strategic investments,’’ he said. Kroloff said Napolitano hopes to sell Otellini on the advisability of putting that cash into Arizona.
Intel CEO Craig Barrett said last month that the company may upgrade one of two existing chip manufacturing plants in Arizona and is considering opening a third.
Such a move could mean up to $5 billion in new investment in Chandler.
Intel spokesman Bill Calder said Tuesday he could not comment on any specific company plans.
Kroloff said Napolitano is taking the message that Arizona is a good place for expansion.
"She wants to get up there (in California) and talk about the strength of the Arizona work force,’’ he said. Kroloff said the governor also will point out what incentives are available to manufacturers who locate in the state.
But Kroloff said Napolitano also will be telling Otellini about the tax breaks she plans for manufacturing and high-tech firms — breaks that the any legislative panel has yet to even consider, much less approve.
One of those proposals would expand existing tax credits available to firms that do their research and development in Arizona — but only for firms which partner with one of the state’s public universities. She also wants to reduce what businesses have to pay in annual taxes on the value of their machinery and other equipment.
Kroloff acknowledged that Napolitano cannot guarantee that the tax laws will change. "But what she can say is Arizona is committed to moving in this direction,’’ he said.
He also said that governors and economic development professionals from other states make similar arguments.
But Rep. Steve Huffman, R-Tucson, said the governor is unlikely to get what she wants. Huffman, chairman of the House Ways and Means Committee, said there is stronger support for broaderbased reduction in taxes on not just equipment but also on land and buildings.