Archive for November, 2008

 We’ve reported in this blog before how quality education institutions and an educated population are critical competents of future economic success.  The TREO blueprint has identified education enrichment as one of our communities top 5 priorities. The recent Tucson Regional Town Hall listed education as a major area for requiring improvement. We all agree to be world class we must start with world class people.

T.U.S.D. continues to be our major school district with 59,000+ students enrolled in fiscal 2008.  The district continues to be under fire recently for how it educates, how much it spends on administration and results they have been getting. With an $381.2 million annual budget paid for by you and me via property taxes (among other taxing mechanisms), people are starting to ask questions and demand better results before more money will be allocated.

Growing Role of Charter Schools

Charter schools have exploded in our community and in the state. Parents are choosing to exercise their free market choice and take their kids out of the district. 

The charter schools receive $6600 per student from the the state. Those of us that send their kids to private schools pay out of pocket and don’t burden the state with having to educate our kids at all. Charter schools must pay for their facility, attract and train quality teachers and produce results. T.U.S.D. essentially collects close to $12k per student when you factor in the fact that they have no cost for building their schools and they can bond for capital improvements.

Proposition to increase TUSD funding failed at the ballot box

T.U.S.D was recently defeated on a proposition for increased school funding. This would have been a county only proposition and our way of telling the state that we believe spending more money is the answer. If the state won’t open the wallet we’ll  tax ourselves. The proposition lost. From talking to people about the issue it wasn’t that voters didn’t believe their was a need for a greater investment in our children it was that people have lost faith in T.U.S.D.’s effectiveness in spending our money and producing results.

Enter a new Superintendent, Elizabeth Celania-Fagen. If there was ever a time for a leader now is it. Fagen is inheriting an ingrained bureaucracy, a culture that isn’t too keen on change and internal bickering that has paralyzed the district for years. As a former teacher she’ll be forced to make hard decisions that will certainly anger the teachers union. She must walk the tigh rope of parents, teachers, administrators and a newly constituted school board that each have their own agenda.

During her brief honeymoon as our new top teacher, I for one wish her luck. Our region depends on a quality education for our kids.

Read the Weekly article HERE.

But according to Pedersen, an annual Kids Count report shows that TUSD spends about $7,410 a year per child, lower than the national average of $8,973 but higher than the state average of $6,232.

Pedersen says the other work ahead for TUSS involves spreading the word about what they see as great programs and schools that are already part of TUSD, in an effort to help the district better compete against charter and private schools that are currently luring an estimated 11,000 students from TUSD schools.

In the end, the fate of TUSD schools may come down to survival of the fittest. Celania-Fagen says she anticipates the district will have a better understanding of what schools are meant to stick around–and those that are not–based on enrollment. She has asked school administrators to ask themselves, “What’s it like to learn here, and can you explain that to parents? Does it mean something beyond reading, writing and arithmetic?”

“(It becomes) a consumer-driven thing where we have students and families choosing certain schools, and no one choosing others, and there are probably reasons why no one is choosing that school. That makes the conversation different,” she says.

We better get this right, we have the children depending on us.

 The Cure To Our Economic Problems

 From Mark Cuban’s blog ‘Blog Mavarik’ – HERE.  Mark started Broadcast.com and sold it to Yahoo for $5.9 billion. Like all good .COM billionaire he went out and bought an the Dallas Maverick’s NBA basketball team. 

Oct 23rd 2008 7:16PM

You can cut taxes for 95pct of Americans and raise taxes for the rest. You can cut taxes for businesses and retain the Bush Tax Cuts. You can increase or decrease the capital gains tax 5 or 10pct either way.  Under both programs the deficit for the country will increase,  we will borrow and print more money.  5 or 10pct variance either way, given the big hole  our economy is in wont matter.

The cure for what ails is us the Entrepreneurial Spirit of this country.  We are a nation of people who encourage , support and invest in those of any and all age, race and gender who will use their ingenuity and come up with a new idea.

Its always the new idea that re energizes this country.  Industry, manufacturing, transportation, technology, digital communications, etc, each changed how we lived and ignited our economy and standard of living. Tax policy has never done that.  The American People have.

Entrepreneurs who create something out of nothing don’t care what tax rates are. Bill Gates didn’t monitor the marginal tax rate when he dropped out of Harvard and started MicroSoft (btw, it was a ton higher than it is today). Michael Dell didn’t wonder what the capital gains tax was when he started PC’s Limited, and then grew it into Dell Computer.  I doubt that any great business or invention started with a discussion or even a consideration of what the current or projected income or capital gains tax was or would be.

Entrepreneurs live to be entrepreneurs. I have never had a discussion with anyone about starting a business that included tax rates. Ever. If anyone that wanted an investment from me made a point of discussing tax rates as an impact on their business, I wouldn’t invest in them. Ever.

Entrepreneurs live for the juice of making their dreams come true. Of having a vision and fighting to see it come true. The joy of mission accomplished and the scoreboard of the financial rewards.

We are in an economic mess right now. It doesn’t matter who caused it. It’s here. It doesn’t matter what our Presidential candidates and their economic advisers come up with. Its meaningless.

The cure to our economic problems is the Entrepreneurial  Spirit of All Americans. Instead of bitching at each other, could one Presidential  candidate please show even the least bit of leadership and character and stand up for and encourage the entrepreneurs in this country ?

i don’t care who is friends with whom, who preached when you went to church, whether you know the actual role of the Vice President, whether you voted with President Bush. I don’t care about any of the mudslinging going back and forth. All it does is waste the time of every potential voter.  All of that is meaningless.

What we need is our candidates to stop yelling at each other and starting looking at the American people and encouraging the best of who we are.  That is who I want to get behind. That is what I would like to see for our country. That is what will energize and motivate people to create companies and invent products that will  turn the economy.

The best time for little guys to start a business  is when the big guys are worrying about surviving in theirs. You don’t need to raise money. You need to be smart and be focused.  I had no idea until this current financial crisis that when I started MicroSolutions, my first company, it was in the middle of a very bad recession. I had no idea whatsoever. I didn’t know what the tax rates were, and I didn’t care. I had an idea, a floor to sleep on and a lot of motivation.

Now is the time for Entrepreneurs to step up and do our part for our country. Its up to us to start businesses and create jobs. That is the cure to this country’s economic problems.

 

From the Tucson Weekly article – HERE.

Pima County may have passed the 1 million mark in population, but more than two-thirds of U.S. counties have higher average wages. That disturbs some local leaders, while others believe the community is making progress toward changing the situation.

“When one-fourth of kids go to bed hungry in Pima County,” says Sandra Hinojos of the Community Food Bank, “people aren’t making enough wages.”

The story continues:

Tucson City Councilwoman Karin Uhlich represents many low-income families living in her northside ward and has worked in the social-service arena for many years. She is aware of the TREO process, strongly believes it must address the issue of local wage rates and has her own ideas about how this should be accomplished.

“As we’re trying to generate higher-paying jobs,” Uhlich says, “we can’t ignore those that employ large numbers of people, like retail and health care. … We need economic development that creates middle-income jobs.”

While Shaw indicates that service jobs will be covered in the TREO blueprint, Uhlich thinks the difficulty many low-pay employees have advancing beyond entry-level positions also needs to be considered. She fears some large-scale retailers, like Wal-Mart, are altering their employment practices to make it even more difficult for workers to get by and wants to see these issues, along with bringing higher-paying jobs to Tucson, discussed.

“I think our top goal should be to create a thriving middle class in Tucson,” Uhlich says about the next 10 years. “We can’t stand by and watch the work force earn low wages and the economic disparity in incomes widen. We have to see that diminish significantly.

“We have a 20 percent poverty rate in the city and a low unemployment rate,” Uhlich says. “That confirms our low wages, and we need to address that issue.”

Great opinion in the Arizona Star by Robert Nordmeyer – read it HERE

Perhaps the worse curse for Tucson is the lack of mature visionaries. Our community is quite limited in its ability to manifest any kind of true vision because of its infantile thinking. This inadequacy is similar to that of a small child who, by his or her own nature, is limited and inexperienced. Tomorrow can’t even begin to be envisioned because the capacity of our leaders, both political and business, is quite narrow and, surprisingly, naive.

Every night when you turn on the news it’s gangs and murder. Draw a line1/2 mile east and west of Oracle from Wetmore to Main or pretty much anywhere south of 22nd and you’ve identified the high crime corridors of Tucson. The high crime rate is starting to affect business, it’s causing neighborhoods to become off limits to families and it’s scaring our community. Our neighborhood in the Catalina Foothills is starting a neighborhood watch program, my cars have been broken into twice and we set the alarm every night.

From the Tucson Citizen – HERE. This can’t be good trend:

Through Oct. 28, the Tucson Police Department had recorded 61 homicides this year.

That’s the highest number of homicides within the city limits since 1995, and we still have two months to go in 2008.

The city is on a pace for more than 70 homicides. That would be the most since 1980, when TPD began keeping statistics as part of its Official Uniform Crime Report database.

 Second in our series comparing Pima County other communities around the county. See the El Paso Downtown redevelopment post HERE.

 

Read the INC magazine article HERE.

But if mayors agree that inner cities deserve saving, they don’t necessarily agree on how to save them. Predictably, most fund a variety of business-development programs: tax breaks for businesses, low-interest loans, and the like. Beyond the basics, however, their strategies diverge:

• In Indianapolis, former mayor Stephen Goldsmith cleaned up parcels of brown-field land adjacent to the interstate highways that bisect the city and then personally recruited businesspeople to locate new companies there.
• In Charleston, S.C., Mayor Joe Riley heavily promotes tourism and uses the proceeds from a hotel tax to fund housing and minority-business-loan programs.
• In Kansas City, Mo., Mayor Kay Barnes is upgrading inner-city housing stock, betting that good, affordable residences will attract people who in turn will attract businesses.
• In Los Angeles, Mayor Richard Riordan is working with the large immigrant population to encourage start-ups in the city’s burgeoning garment district.

Austin

Mayor: Kirk Watson (D)

First term: 1997 – present

The emphasis: Austin wants to populate its inner city with small businesses, large tech companies, and even academic institutions drawn from other parts of the city and region.

The programs: The Austin Revitalization Authority (ARA) is spending $86 million through 2005 to redevelop and stabilize the city’s most distressed district, in the central part of East Austin, starting with the construction of a 40,000-square-foot retail and office complex. The city has qualified much of that area for federal loans, in hopes of encouraging indigenous businesses to remain there and expand, and outside businesses to relocate there or expand into the area. Other betterment initiatives include beautification, the demolition of derelict buildings, historic preservation, home construction, and storm-water drainage. In addition, the ARA is trying to attract restaurants and clubs to the area in order to create the vibrant nightlife young professionals look for.

A fiber-optic cable already runs through the neighborhood, and the city is negotiating with three companies to provide Internet access to every building in East Austin. That may help Austin capitalize on its growing reputation as a technology center: the ARA has sent out feelers to Dell, Samsung, and Microsoft about locating offices in the area. Another prospect is the incubator of the University of Texas. “I’d say we have a 50-50 chance of getting them,” says Byron Marshall, interim executive director of the ARA. “If we do, we might be able to get the start-ups spun out of the incubator to stay here as well.”

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“People are starting to realize that East Austin has become an economic engine.”

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The mayor says: When Watson was elected mayor, he named East Austin his first priority. But local politics stymied his efforts on behalf of that area. Meanwhile, private investment in the city’s burgeoning downtown rapidly eclipsed inner-city projects. Now Watson believes interest in East Austin is picking up. “It’s becoming much easier to recruit business to East Austin,” he says. “I get people contacting me all the time about this. It’s not so much ‘What can the city do for me?’ as ‘This looks like an area of exciting opportunity.’ People are starting to realize that an area that appeared not to be a potential economic engine — well, now it is.”

Supporters say: Bob Foster’s Equix Advisory Corp. has refurbished three East Austin buildings for new tenants: an advertising agency and two high-tech companies. Tech companies are easily wooed, he says, by the neighborhood atmosphere, the cheap space, and the bandwidth. And while Foster hasn’t used any of the ARA incentives, he has on several occasions asked for Watson’s aid in cutting through the development bureaucracy. “The mayor’s been a dynamo,” Foster says. “The development process can only be described as a meat grinder. In the 1960s and 1970s a fabric of ‘antigrowth good intentions’ was woven into the system that makes doing anything — good or bad — very difficult. The mayor is willing to get right in the middle of a bureaucratic muddle — to wade right in and say no to people. He’s been really, really aggressive.”

Skeptics say: City Councilman Gus Garcia, an East Austin representative for nine years, says that the city council hasn’t done enough to help private investment in the inner city catch up with that of the downtown. “East of Interstate 35 is not where the emphasis is,” Garcia says. “All the development has been downtown, and the distressed neighborhoods are still distressed. The city has dedicated small amounts of money to distressed areas, but there hasn’t been a capital injection by the private sector. This mayor has moved more things than the others. And the city has gone in to help neighborhoods to develop a good plan. But the neighborhood plans are relatively new, and they need implementation strategies.”

The last hurrah: With five years left in the first phase of ARA’s grand plan for East Austin (a second phase will last through 2013), Watson’s legacy as an inner-city reformer has yet to be written.

Mike Hofman is a staff writer at Inc.

Austin (Travis County) versus Pima County

	Pima County		Travis County     Austin 2006
Total Population	1,003,235		921,006
Unincorporated Population Served*	352,105		166,087
Cities/Towns in County	5		27
Percentage unicorporated	36%		18%
County Budget/Person	$1,365		$719
County Annual Budget	$1.48b		$663 m
Property Tax Rate Per $100	$4.66		$2.52
Employees per 10k population	8.3		2.03
Total County Property Roll	72.1 billion		84.8 billion
Median Home Price	$244,000		$243,800

The above picture (with some modifications) is from a major puffpiece from the November Tucson Lifestyle(the king of puffpieces).  The timing of this article is just fantastic.  It comes out the same week as a new article about how Tucson’s hotel and resorts are hurting.  The trends are pointing to some hard times ahead.

As some may have noticed in today’s AZ Star-Business Section, the local hotel business is not going very well.

Tucson resorts offer fall deals

‘No vacancy’ sign nowhere in sight as slowdown in travel gets slower

By Dale Quinn

ARIZONA DAILY STAR

Bargains Local resorts are offering deep discounts and special packages on other amenities. Here are some of the lowest rates at some local resorts (restrictions may apply). • Hilton Tucson El Conquistador Golf and Tennis Resort, $119 per night • Loews Ventana Canyon Resort, $149 per night • Westward Look Resort, $139 per night • The Westin La Paloma Resort & Spa, 50 percent off the cost of a room on the fourth night.

Resorts in the Tucson area are working hard to fill empty rooms, slashing prices and offering special packages as the peak travel season approaches.

The sputtering economy has cautious consumers tightening their belts and spending less on travel, according to those in the industry, and that means more vacancies at local resorts.

In September, Tucson resorts saw a 12 percent decline in occupancy and room demand when compared with the same month last year, according to figures from Tennessee-based Smith Travel Research. Those resorts also saw an 8 percent decrease in revenue per available room.

Occupancy and room demand have been lower every month this year when compared with the same month in 2007. It may be a while before the trend swings in the other direction, resort officials said.

“I don’t see a speedy turnaround, I think we’re going to see a fairly tepid environment going into 2009,” said Lynn Ericksen, the general manager of Hilton Tucson El Conquistador Golf and Tennis Resort.

The resort at 10000 N. Oracle Road is offering a bed-and-breakfast package — starting at $119 per night — that includes a room and a meal in the morning, Ericksen said. There’s also a golf package for two that starts at $189 per night, he said.

Such discounts are unusual for the time of year when Tucson becomes a desirable travel destination, said Mark Lindsey, a spokesman for the Westin La Paloma Resort & Spa.

The Westin La Paloma, at 3800 E. Sunrise Drive, is offering guests 50 percent off the cost of a room starting on the fourth night of a stay, Lindsey said. It also has a family package with a $50 resort credit, he said.

Resorts rely heavily on business conventions, and a decline in that travel is also pushing the occupancy rate down, said Michael Dominguez, a spokesman for Loews Ventana Canyon Resort. Many businesses, already struggling with the economic situation, are waiting for conditions to improve before planning a big conference, he said.

More than half of a large hotel’s business can come from conventions and group meetings, resort officials said. When the businesses cut back on those expenses, the resort industry takes a hit, they said.

“These are the times that you see our economy is so tied together,” Dominguez said.

Loews Ventana Canyon, at 7000 N. Resort Drive, near North Kolb Road and East Sunset Drive, is offering a corporate benefits package that gives business travelers a food and beverage credit. The longer a traveler stays, the larger the credit.

Among other specials, the resort is offering rooms that start at $149 per night — usually in-season rooms start at $279 a night, said spokeswoman Jennifer Duffy.

Also a factor is the declining number of flights at Tucson International Airport, said Alan Klein, the general manager of the Westward Look Resort, 245 E. Ina Road.

Westward Look, which has nearly finished renovating its rooms at a cost of $10 million, is also offering discounts. Rooms are starting at $139 that would normally go for $179 to $209, Klein said.

Resort officials said this is the worst slowdown they’ve seen in the industry since the Sept. 11 terrorist attacks. Klein the discounts, in part, are to attract Tucsonans to think about staying at a resort in their hometown.

The idea is to entice people who wouldn’t typically stay in their own backyard, he said. “But now they’re thinking twice because it’s cheaper to stay in town sometimes,” he said.

The starting point for Barack’s presidency – From REDCATBLUECAT.BLOGSPOT.COM

When Barack Obama was elected:

The inflation rate was 3.7%
Unemployment was 6.5%
The prime was at 4%
The Dow closed at 9,625
The NASDAQ closed at 1,780
The S&P closed at 1,005
Oil was $60 a barrel.
U.S. monthly domestic oil production: appx 155 million barrels
U.S. proven oil reserves: 21.3 billion barrels
U.S. offshore proven reserves: 3.9 billion barrels

These were the facts as polls closed on 11/4. His domestic success or failure should be measured against them.

 

From Steve Emerine of Inside Tucson Business – Read it HERE.

The supervisors have partially avoided the problem by giving County Administrator Chuck Huckelberry almost total power to run day-to-day county operations. And when asked, he often announces board members’ policies, even when they haven’t yet set them.

When James Keene was city manager, he had many of those same powers. His successor, Mike Hein, has tried to let bureaucrats he inherited handle routine matters but to refer major policy decisions to Walkup and the council.

Huckelberry won high marks from his county bosses, the daily newspapers, environmentalists and neighborhood activists for his Sonoran Desert Conservation Plan to limit growth in unincorporated areas and buy thousands of acres of land from other government agencies, ranchers or developers.

But his costly anti-sprawl crusade has led to greater sprawl as developers and builders moved to Pinal, Cochise and Santa Cruz counties to build homes that were more affordable for Tucson workers than they would have been if they had been built in this county.

Huckelberry’s efforts to reposition the county from the area’s sewage handler to a major player in regional water policy have met resistance from most of the area’s real water providers while risking lawsuits from the county’s one-time ally, Marana.

Results inside Tucson have also been unimpressive.