Future Shock

State leaders race to prepare the Copper State for explosive growth

An official letter from the state’s Lawn and Pool Use Enforcement Division says you must choose between taking out your green lawn or draining your swimming pool. You can’t have both, as the state has been severely restricting outdoor water use ever since the population of Central and Southern Arizona swelled to 10 million people around 2040.

You opt to keep the pool because urban sprawl and the heat-island effect have caused Arizona to break yet another record - the number of summer days when the temperature fails to drop below 100 degrees.

But time in the pool is getting rarer. Your daily commute from Pinal County to Phoenix is a grinding two hours. You’d like to work closer to home, but job centers and transportation routes haven’t reached your relatively new subdivision.

Welcome to the Sun Corridor, circa 2050.

With foresight, unified planning and a significant investment in the state’s infrastructure, the above scenario need not play out.

Without it, according to the author of a recent report on Arizona’s future, a part of the state risks becoming, not the next Los Angeles, but its bland sister - the San Fernando Valley.

“You’ll essentially get existing urban development patterns spread all over the place in a seamless, homogenous, urban fabric of chain stores, fast food restaurants and red stucco houses,” says Grady Gammage Jr., a principle author of “Megapolitan - Arizona’s Sun Corridor,” published by Arizona State University’s Morrison Institute for Public Policy.

The report predicts that land stretching from the middle of Yavapai County to western Cochise County to the Mexican border will someday merge into one integrated super metropolitan area - a “megapolitan” dubbed the Sun Corridor.

That doesn’t mean there will be uninterrupted development between Prescott and Tucson - there is too much Indian and federal land in the way. Instead, the corridor’s economies and commuting patterns will merge.

Imagine a series of overlapping circles emanating from Pima, Pinal and Maricopa counties. According to a measurement developed by scholars at the Metropolitan Institute at Virginia Tech, if at least 15 percent of workers from one area commute to another, those commuting patterns have merged.

Already, Pinal County sends 40 percent of its workers into other regions, most likely north to Maricopa County.

“That means Maricopa and Pinal are already merged,” Gammage says.

Some time between 2010 and 2020, Pinal is expected to send more than 15 percent of its workers south to Pima County, Gammage adds, creating an economic bridge between Phoenix and Tucson.

The U.S. Census designates these areas with cross-region commuting patterns as “combined statistical areas,” something the “Megapolitan” report says may happen by the 2020 decennial census.

The Sun Corridor will be one of 10 megapolitan areas in the United States. By 2030, it could be home to 10 million people and 4.5 million jobs, making it a potential hotbed of wealth and productivity. According to the report, the nation’s office market and high-tech clusters are in megapolitans.

However, as the Morrison Institute report asks, will Arizona be able to harness the staggering potential of such an area?

That would require a whole new level of dialogue and cooperation between the five councils of government, six counties, 57 municipalities and 300 other governmental units spanning the 30,000-square-mile area that would make up the Sun Corridor.

And the state is just at the beginning of that process, Gammage says, adding, “We’re behind the curve.”

Shannon Scutari, on the other hand, believes she sees progress every day.

As Gov. Janet Napolitano’s policy advisor for growth and infrastructure, Scutari is on the front lines of important growth initiatives, including the long-term planning exercise developed by the Urban Land Institute, AZ One - A Reality Check for Arizona, held last spring at the Phoenix Convention Center.

AZ One assembled more than 300 people from Maricopa and Pinal counties and guided them through alternative growth scenarios with the spanning the 30,000-square-mile area that would make up the Sun Corridor.

And the state is just at the beginning of that process, Gammage says, adding, “We’re behind the curve.”

Shannon Scutari, on the other hand, believes she sees progress every day.

As Gov. Janet Napolitano’s policy advisor for growth and infrastructure, Scutari is on the front lines of important growth initiatives, including the long-term planning exercise developed by the Urban Land Institute, AZ One - A Reality Check for Arizona, held last spring at the Phoenix Convention Center.

AZ One assembled more than 300 people from Maricopa and Pinal counties and guided them through alternative growth scenarios with the purpose of generating discussion and consensus.

“They’re talking to each other, there’s no doubt about it,” Scutari says of the disparate public and civic leaders she encounters in her job. “Some of them are actually even listening to each other.”

Scutari adds that the governor hopes to see the AZ One exercise duplicated in the Tucson and Flagstaff areas.

While her office is trying to bring several growth issues into sharp relief, Scutari says a pressing challenge is the state’s need to invest in transportation infrastructure.

That is why the Arizona Department of Transportation has begun a $7 million statewide study and is working with cities, tribal governments, land-use planners, regional transportation organizations and others to assess the state’s infrastructure.

One important feature of the Statewide Transportation Planning Framework, Scutari says, will be to connect land-use decisions with transportation infrastructure, something that has never been done. The study already has outlined some of the most critical transportation needs.

Right now, the governor is backing an initiative campaign to put on the November ballot a one-cent increase in the state’s sales tax. The increase would raise $42 billion over 30 years to pay for transportation infrastructure.

The money is needed as Arizona’s roads and freeways are “only going to get worse in the next 25 years,” warns Tim James, director of research and consulting for ASU’s L. William Seidman Research Institute.

James headed a team that spent a year studying the state’s infrastructure and its ability to handle growth. The resulting report did not endorse the Napolitano-backed initiative, but it did say that without changes in funding mechanisms, the state cannot keep up with growth.

“There will be longer commutes, there will be more time spent in traffic, you’ll be traveling at lower speeds,” James says. “It’s going to be more congestion and less safe journeys. The road system is going to become unacceptably poor.”

The report, commissioned by the Arizona Investment Council, formerly known as the Arizona Utility Investors Association, concluded that accommodating growth is going to be “very, very costly” - probably $417 billion to $532 billion in the next 25 years.

In that time period:

• Electricity demand will increase by about 85 percent, yet the state faces a funding gap in paying for new plants.
• Just providing telecommunications services to the state’s current unserved population would cost up to $2 billion. Creating a state-of-the-art fiber network that would guarantee high quality telecommunications would cost about 10 times that.

• Water delivery and treatment systems built decades ago will need to be replaced.

While it is impossible to predict exactly what the Sun Corridor will look like in 2040, planners do know generally where growth will occur.

Eric Anderson, transportation director for the Maricopa Association of Governments, says projections show most growth in Maricopa County will be in the West Valley as developable land in the east diminishes. Pinal County, where it meets the southeast corner of Maricopa County southeast of Queen Creek and the 275-acre state land parcel dubbed Superstition Vistas, will see a lot of growth as well. Finally, Anderson says, areas around Casa Grande and Maricopa will continue to expand.

According to MAG’s latest figures, there are about 1.8 million housing units already approved or entitled in various master-planned communities in Maricopa and Pinal counties.

Jay Hicks, co-chairman of the AZ One steering committee and a vice president at EDAW Inc., an architecture and environment consulting company, says people still can shape the character of future development, even in the face of all that entitled land.

Some parcels may need to be re-entitled as time passes and communities become more cognizant of the way land uses affect pollution levels and energy consumption.

Additionally, 40 to 50 percent of all commercial properties will need to be redeveloped in the next 15 to 20 years, Hick says.

Facing the challenges that come with growth seems daunting, but Scutari says there is “a sense of optimism” among the state’s stakeholders.

As Gammage put it: “There is an opportunity here, if we can seize it and get ahead of it, we can do something really special.”

www.asu.edu/copp/morrison
www.arizona.uli.org
www.azgovernor.gov
www.dot.state.az.us
wpcarey.asu.edu/seid
www.arizonaic.org
www.mag.maricopa.gov
www.edaw.com

I’ve had this idea for quite some time. You turn on the news and here about a $700 bail out to the US financial system. We hear about the $1 billion per day spent in Iraq. What does that mean to you and me? Is the billion a day spent in Iraq equal to a $20 bill to a wealthy american family? What perspective does this all fit into?

So I started to compare each countries Gross Domestic Product or the total amount of economic activity achieved in 12 months by a country.

Then I made an assumption that the top country in the world, at this point the U.S., would correlate to a wealthy American Family that brought in $125,000 per year.  From there a factor was determined and each government expense was plugged into a formula to see how that line item would relate to a ‘wealthy American Family’ earning the arbitrary number of $125k. Below is a breakdown of American Family household income. The top 10% to top 5% fit into the $120k to $150k range. See the chart below.

Then you plug in all the big numbers and you can see what the costs really look like. Here are some highlights?

For a wealthy American Family earning $125,000 year the federal equivalent for spending is as follows;

Education              - $4652 per year
Healthcare             - $8852 per year
Debt Owed Japan   - $5295 total
Debt Owed China  - $4625 total
Debt Owed U.S.     - $69,587 total
Debt Owed ALL     - $93,750 total (this could be equated to credit card debt)

Total Household Equity -        $473,214 (this is basically your house value)
Total Household Mortgages - $107,143

Now for the back up charts. First the national GDP compared to the $125 American Family:

Next the big U.S. federal numbers compared to the ‘real cost’ to a wealthy American Family;

How do we measure up to the rest of the world on the expense side?

By KIMBERLEY A. STRASSEL from Wall Street Journal - Dec. 21, 2008

Air Force One

As he sits at his mile-high desk, clad in his Air Force One crew jacket, George W. Bush is as he has ever been: upbeat, focused, confident in his past decisions and in the future.

Terry Shoffner

This is remarkable given the up and downs — lately downs — of his administration. Through it all, the president has acted on his own convictions, a trait that has inspired both violent critics and passionate defenders.

In a more than hour-long interview, Mr. Bush tells me about his tenure. He ticks off his personal list of domestic achievements: No Child Left Behind, which he says was not only an “education reform” but a “civil rights measure”; a costly Medicare prescription-drug program, which also created health-savings accounts and put “people in charge of their own health-care decisions”; his faith-based initiative, which he says was not about making the state a “religious recruiter” but about creating a government mentality that says “if it works, fund it”; his tax cut, which he credits in part for “52 months of uninterrupted job growth.” He also is proud of “fighting off protectionism and promoting trade,” and his success at getting Trade Promotion Authority back in 2002.

Mr. Bush had many big plans that never came to fruition, from school vouchers to radical health-care reform. He considers Social Security and immigration the “two big issues that were unfinished.” His immigration plan infuriated his base, which viewed it as amnesty. He remains unrepentant. “Immigration was a very tough issue, and I knew it would be tough because it’s a very emotional issue . . . On the other hand, the system was broken, falling apart, and people’s lives were being affected in a way that was really not worthy of our country.”

He also won’t agree that Social Security reform was a casualty of the Iraq war. “Social Security did not pass because legislative bodies tend to be risk-averse, and restructuring, reforming Social Security requires a certain amount of risk. And the idea of asking members of Congress to deal with a problem that is not imminent is difficult.” He contents himself with having “laid out some solutions” and hoping a future president will take courage from the fact he campaigned on it twice, “proving it was not the third or fourth or fifth rail of American politics.”

He’s confident “there will be a period of time when free-market, conservative supply-siders will study the Bush tax cuts and say the following: One, it helped us recover from a recession; and two, by holding down nondefense discretionary spending, we were on our way to balancing the budget.” That latter part might be a leap for conservatives, whose own remembrances of the Bush spending record include farm bills, earmarks and the president’s reluctance to wield a veto pen.

Yet the president remains adamant his budget troubles were the result of a ramp-up in defense spending. “The problem I had on the budget, in terms of perception, was, one we were at war, and I had pledged to mothers, fathers, spouses, children, that their loved ones would have what it takes . . . I refused to compromise on the military.”

The deficit has exploded partly as a result of the administration’s recent financial interventions. Mr. Bush remains convinced they were necessary to prevent the economy from failing and to “preserve the free-market system.” “I think people will look back at this period in time and say that George W. Bush, when confronted with a significant financial problem, put all chips in.”

Is he concerned that putting all the chips in has potentially laid the groundwork for an unprecedented era of big government? “I worry about some using the excuse of rescuing the economy to undermine free-market principles, whether it be domestically or internationally, I worry that the idea of trying to regulate the markets — which requires some regulation no question — but the danger is overregulation . . . So, yes, I’m concerned.” This is why, he says, he gave his speech on free markets (in New York City on Nov. 13), and one reason he hosted the G-20 meeting in Washington a few days later. “I wanted to make sure that we send a clear message that while there were excesses, we should not destroy markets.”

The action that will always most define the Bush presidency will be the invasion of Iraq. It is also the decision he remains most visibly passionate about, especially given it was the cornerstone of his broader “freedom agenda” in the Middle East. That agenda, he says, is working, and he remains confident that while it “was widely criticized by some as being hopelessly naïve and idealistic, is really the only practical way to provide long-term security . . .” He is convinced the region is stepping into a new era, and will continue on that path “unless America loses nerve in our belief in the universality of freedom.”

The president suggests his program that has provided antiretroviral drugs to 2.2 million African HIV-AIDS victims is also partly aimed at national security. Freedom includes “freedom from disease, because [terrorists] can exploit hopelessness, and that’s the only thing they can exploit.”

I ask the president about the Iraq violence of 2006, and whether the surge shouldn’t have happened sooner. He answers that “what seems like an eternity today may seem like a moment tomorrow,” but he also acknowledges politics complicated the process. “In 2005 we were feeling pretty good about ourselves because the political process was beginning to unfold.” Then came the bombing of Samarra, and a “vacuum” because of delays in the Iraqi political process — at which point the casualties and incidences “just skyrocketed.” He recalls that many in his own party were “anxious to get out of Iraq” and “people in my own government who questioned whether or not it was possible to create the conditions so that we could fully succeed.”

He felt the only way for the surge to be effective was a “process that [brought] people along.” Making it more “rough” was the 2006 election, as he was “mindful of dropping decisions in the midst of the campaign . . . People don’t want military decisions based on election cycles or what’s coming up in elections.”

Would it have been easier to just replace Saddam with another strongman? “Early on, I knew we were in an ideological conflict, and you don’t win ideological conflicts by replacing one strongman with another. . . . And frankly, that’s been a big shift in our foreign policy in the Middle East, which is — and this is not a criticism of anybody, it’s a recognition that presidents deal with the realities of the situation. But in the Cold War, to prevent communism from taking root in the Middle East, we promoted stability. Well, it just so happens that over time people became so resentful and so hateful that they were swayed by a group of very smart and very capable ideologues to become their foot soldiers.”

He also counts as an accomplishment his protection of the homeland, in particular that he is “leaving behind tools that future presidents will be able to use — and even though they were controversial when they were implemented, people are going to get in that Oval Office and say, now I understand why this tool is important.”

He dismisses criticisms (some from this page) that his second-term foreign policy has been a shadow of his first — that it has placed too high a premium on a diplomatic multilateralism that has allowed Iran to inch closer to a bomb and North Korea to play the world community. “A credible foreign policy is one in which you initially establish your credibility, establish your principles by which you would govern and stand strongly by them, so that over time, the people will begin to say — in the world — say, well, we can’t change him, let’s join him and try to solve problems.”

Mr. Bush lists as an example the Palestinian issue, in which he refused “to deal with Arafat,” but in which “the world came in many ways to recognize that policy made some sense” and “therefore the two-state solution led by a Palestinian Authority that recognized Israel has now come to be.”

I ask the president how the Republican Party has changed these past eight years. What are the opportunities it has missed, or where has it grown?

Organizationally, he says the “Bush era for the Republican Party” will be remembered for its breakthrough work in 2000 and 2004 in “how to organize at the grass roots,” the “micro-targeting, and a very intense focus on getting out votes” that Barack Obama built on this year with the Internet. Substantively, he acknowledges it is difficult to “assess where [the party] has grown after a defeat” like the one it just received. He wishes he could say that one change “was the capacity to get Hispanic votes” — as he did in 2004 — but this election saw a Latino defection to Democrats.

Yet he remains a believer in the cyclicality of politics, and his own stamp on the party. He says a younger generation will “take our philosophy, which is right of center — compassionate conservatism is how I describe it — and win.” He doesn’t believe change requires an ideological shift, but rather “new faces, new voices, fresh energy” that take “the same basic philosophy — lower taxes, strong national defense, a belief in a responsibility era.”

Speaking of compassionate conservatism, the GOP is in an internal dispute over the meaning of that term, a fight that could shape the future of the party. On one side are those who argue it is primarily a way of describing how conservative policies are, well, compassionate. On the other are those who argue it demands conservatives embrace bigger government.

So I ask the guy who invented the term to settle the fight. “Compassionate conservatism, first and foremost, says that people benefit from a conservative philosophy.” Mr. Bush thinks government has a definite role, though with limits, and with a focus on effectiveness. “People want to say compassionate conservatism means — right off the bat they say, more government spending. No. What I say is, when there’s government spending, it is as a last resort, and it works, which is compassionate.”

Today’s trip is an emotional one to Texas A&M, where the president delivers his last commencement address, to a school that is home of the Bush School of Government and Public Service. He jumps out of the motorcade and greets his parents, flashing former First Lady Barbara Bush a grin and a “Hi, Ma!” Yet toward the end of his address he slightly chokes up delivering a tribute to his father as an “example of courage and service.”

He admits he’ll miss things, one of them “being commander in chief.” One thing rarely mentioned about this president (and he does not bring it up to me) is that he has met with some 2,800 families who have lost loved ones in Afghanistan or Iraq. When I mention it, and how quietly he has performed these meetings, he simply responds that it was important they not be “political.” He does say he’ll miss doing it, because “it’s always been a healing experience. The commander in chief — the comforter in chief gets comforted. Why? Because the character of the American people is so strong . . .”

He is fired up about his library and institute that will be built at Southern Methodist University, which he says will be “a place to promote thought and values,” in particular, freedom. He wants to have Middle East educators come “so that Americans don’t have this image that there’s nothing modern in the Middle East.”

He muses it would be “cool” to bring Vaclav Havel to write a book, or Cuban dissident Oscar Biscet (should he get out of prison) to lecture. Domestically, he wants the center to focus on compassionate conservatism, and to promote successful stories of “social entrepreneurship.”

I ask the president what he’s learned from his time in office — not from a policy perspective, but as a person. His answer is unsurprising from a man who has always talked openly of his faith — though that, too, has earned him criticism.

“I’ve learned that God is good. All the time.”

Ms. Strassel writes the Journal’s Potomac Watch column.

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Back of the Pack - HERE

 It’s no secret - Arizona’s economy has stumbled. Even so, it mist still be a shining star of the Southwest, right? Well, no. Two leading Arizona economists have  rather unflattering comments about Arizona’s economy as it stacks up against other Southwestern states.

“Arizona is not only one of the weaker states in the Southwest, it is one of the weaker states in the country right now,” says Lee McPheters, economics professor at the W.P. Carey School of Business at Arizona State University.

According to Marshall Vest, an economist at the University of Arizona’s Eller College of Management, Arizona has the dubious distinction of leading the nation into recession.

“Normally, the Arizona economy lags behind,” Vest says. “The national economy enters recession and then a few months later, the Arizona economy also tops out. But this time around, it looks like the nation’s economy peaked in December of last year while Arizona peaked in August. We are leading.”

But Arizona may not be alone. Vest says it’s possible Nevada’s economy crested a couple months before Arizona. Thus, two Southwestern states likely are marching the U.S. into recession, he says. In comparison, other states in the Southwest — such as Colorado, New Mexico and Utah — are doing relatively better. Texas is doing quite well, the economists say.

McPheters and Vest blame the weak Arizona and Nevada economies on housing.

“The states that have suffered the most were the states where the housing bubble got inflated the most,” Vest says. “The run-up in housing prices started in California and then moved east to Las Vegas, then Phoenix, then Tucson and it kept going east.”

In Nevada and Arizona, the construction sector and other related industries were dragged down after housing popped, Vest says. However, Colorado and Utah were not as affected by the depressed housing market, and Texas had no housing bubble at all, he notes.

According to the U.S. Department of Commerce’s Bureau of Economic Analysis, Arizona ranked 51st among all states and the District of Columbia for per capita income growth in 2007. Nevada was 48th, Colorado 46th, New Mexico 25th, Texas 16th and Utah seventh.

The Western Blue Chip Economic Forecast, published by ASU’s school of business, tracks economic activity in 12 Western states. According to the May edition, Nevada ranked 11th for wage-and-salary employment growth in 2007. Arizona was 10th, New Mexico ninth, Colorado seventh, Texas third and Utah first.

And it gets worse.

“Arizona retail sales have been very surprisingly weak. That’s all you can say about it,” McPheters says.

Retail sales were significantly stronger in 2007 in Colorado, Utah and Texas. However, Nevada, Arizona and Utah led Southwestern states in population growth last year.

According to contributing writers for the Blue Chip, Colorado is in better shape than it was in the last recession, and Texas may be better positioned than any other state to weather the current economic downturn.

Economic development experts are more upbeat about Arizona’s economic standings in the Southwest, and they praise the efforts of various organizations to stimulate business growth.

“I think Arizona stacks up pretty well,” says Barry Broome, president of the Greater Phoenix Economic Council. “We have dramatically improved our competitive position the last two to three years. California is the technology giant. Utah and Colorado have built technology corridors. But if you look at momentum, Arizona is stronger than the other Southwestern states.”

Broome commends Arizona’s commitment to public infrastructure, but he says it needs to attract more capital and diversify beyond its dependency on construction.

Arizona’s economy is more volatile and cyclical than other Southwestern states because it is driven by population growth, housing and construction, says Laura Shaw, senior vice president of corporate and community affairs for Tucson Regional Economic Opportunities (TREO). However, she says Southern Arizona is growing its bioscience sector along with Phoenix, and TREO has a long-term economic development strategy that focuses on educational excellence, livable communities, collaboration between public and private sectors, high-skill and high-wage jobs, and urban development.

Bruce Coomer, executive director of the Arizona Association for Economic Development, says economic development will play a critical role in Arizona’s eventual recovery. With that in mind, he worries about how the state Legislature is addressing Arizona’s budget deficit.

“To solve that, they are cutting programs here, there and everywhere, and some of them being considered are economic development programs,” Coomer says. “Those are the programs that could be a vehicle to help Arizona end the downturn early, because the engine to bringing back a solid, thriving economy is high-wage jobs.”

According to Coomer, the Arizona Department of Commerce’s business attraction group may be dissolved, and some legislators want to eliminate the department entirely.

“(The department does) an excellent job, but they are underfunded and understaffed,” he says. “Doing away with the department would be a huge mistake.”

www.aaed.com
ebr.eller.arizona.edu
www.gpec.org
www.treoaz.org
wpcarey.asu.edu