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East Valley Tribune editorial: Plan good for state, but it’s not budget fix

Be sure to check out today’s editorial in the East Valley Tribune about balancing immediate and long-term solutions to Arizona’s economic and budget crisis.

Plan good for state, but it’s not budget fix

East Valley Tribune

January 8, 2010

Different economic development plans unveiled Tuesday by House Speaker Kirk Adams, R-Mesa, and Gov. Jan Brewer focus correctly on the fundamentals of Arizona’s future — enticing the free market to re-engage by reducing tax burdens and removing unreasonable government barriers.

As the Tribune’s Ed Gately reported Wednesday, Adams announced a package of measures designed to stop the loss of employment from the recession that started in December 2007. The proposals include adding income tax rebates for businesses that create new jobs and restoring a job training program. Also on the list would be the adoption of a series of tax cuts affecting individual and corporate incomes and property taxes that would be phased in, starting in 2012.

Meanwhile, Brewer is emphasizing a ramp-up in energy development that would include solar, wind and nuclear power, Capitol Media Services reported. The governor’s goal is to eliminate bureaucratic red tape and to leverage tax credits for start-up operations.

It’s a relief that these state leaders have no interest in following the 2009 federal model of throwing a huge amount of cash in every direction – money that had to be borrowed or printed because it wasn’t available – while attaching huge strings of regulation that stifle creativity and efficiency.

The two packages do have an occasional flaw, such as Adams’ proposed Deal-Closing Fund, which essentially would be a slush fund for a governor to offer cash incentives for a handful of businesses that might move into the state.

Until now, Arizona has largely avoided the “incentive wars” of other states that offer ridiculous amounts of money to a high-profile business that delivers only modest benefits for the local economy. The Legislature should stick with policies that make doing business in Arizona appealing to a diverse set of industries, rather than funneling tax dollars to a favored few. Most of the other proposals from Brewer and Adams would do just that.

One final note of caution. The governor and the Legislature can’t delude themselves into thinking a sound strategy for economic freedom will provide relief from the state’s enormous budget deficits for the next two years. As Senate President Bob Burns, R-Peoria, explained to Capitol Media Services: “You’ve got to stop the bleeding of the state right now.”

Good leaders can act simultaneously on immediate solutions as well as long-term, permanent improvements. But lawmakers must not mistake one for the other as they go to work next week.

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