Archive for January, 2010
Someone is building a hotel and convention center in our region and it’s not near downtown Tucson. The Pasqua Yaqui tribe is building a hotel and convention center west of downtown Tucson. Private money building private projects is a novel concept. Unless and until Tucson government starts getting out of the way we’ll never see a downtown revitalization.
The best quote from the article:
“I think the more people who identify Tucson as a destination for these kind of things – a destination for conventions and for large group meetings – the better everyone does,” Hecker said. “It just enhances Tucson’s image in the marketplace as a desirable place for conventions and group meetings.”
At the same time, the revitalization of the Tucson Convention Center is progressing “fairly aggressively,” Hecker said.
Kimberly Schmitz, director of communications and public relations for the Metropolitan Tucson Convention and Visitors Bureau, also welcomed Sol Casinos’ plans.
“The Pascua Yaqui have created some really great products for our destination,” Schmitz said. “An additional 215 rooms to Southern Arizona’s offering are always welcome, and we will definitely look forward to promoting this and the convention center as part of our product.”
By Josh Coddington – firstname.lastname@example.org
Published: January 26, 2010 at 6:10 pm,
A trolley car full of passengers crashed into three vehicles after its brakes went out Jan. 16 in Tucson.
The trolley, part of the system that has been operating in Tucson for about six months, was travelling south on Fourth Avenue when operators realized the brakes had failed. Loaded with approximately 10 passengers, it picked up speed as it rolled down an incline at the entrance of the Fourth Ave. tunnel, which was recently expanded to handle cars and the trolley line. It hit two vehicles along the way.
It was headed toward the intersection at Congress Street, a busy arterial road, before losing momentum on a small hill leading out of the tunnel. That’s when it reversed course and rolled backward into a third vehicle.
Tucson Police and Capitol Police Officer Scott Schade arrived shortly after, parking their patrol cars behind the train to prevent it from moving any further.
Schade said the vehicles were damaged, but no injuries were reported.
“It was pretty lucky. It could have been something pretty major,” he said. “There is an electrical line in there, who knows what could have happened.”
Schade said there have been a lot accidents associated with the trolley system.
“It’s just been a nightmare I guess down here,” he said. “Ask any officer about the trolley, and they will just shake their head. I’d like to see them shut it down actually.”
Just another reason that the board of directors of the Tucson Chamber need to do the right thing and ask their fearless leader to step down. After that happens, it’s time to rebuild the Chamber to be the effective force it needs to be.
Just so you know, the board that enables the stagnation at the Chamber is listed below. Please urge them to enact change. An effective Chamber benefits all of Tucson, not just its members.
Tucson Chamber 2009-2010 Board -
They only meet quarterly.
Chairman of the Board
Vice Chair, Program of Work/Chairman-elect/Secretary
Southwest Gas Corp.
Vice Chair, Budget and Finance
BBVA Compass Bank
Vice Chair, Education and Community Development
Vice Chair, Economic Development
Citi Cards Tucson
Vice Chair, Public Affairs
1st Deed Funding, LLC
Vice Chair, Governmental Affairs
Vice Chair, Membership and Communications
Tucson Airport Authority
Board of Directors
Jim Arnold, KOLD TV
Barry Bendall, Wells Fargo
Steve Craddock, Lennar
Wyllstyne Hill, Raytheon
Paul Kappelman, Northwest Medical Center
Wendell Long, Sol Casinos
Zory Lopez, American Airlines
John Low, Asarco
Daniel McGraw, Chase
Mark Mistler, BBVA Compass
Bill Petrella, Westin La Paloma
Wayne Silberschlag, Burlini/Silberschlag, Ltd.
Richard Underwood, AAA Landscape
William Valenzuela, WG Valenzuela Drywall
After years of court wranglings it looks like the Goldwater Institute shot a big canon across the bow of to cities and towns that chose to use tax dollars to entice business into their jurisdictions. As you look at this decision ask yourself if it’s OK for your government to pick winners in the market place? Ask if you have enough faith in our political system to allow elected officials to hand over $100m of your tax dollars to a private firm? Can you think of any potential tax hand overs going on here in Tucson?
Read the article HERE from the Arizona Republic:
A deal that could give nearly $100 million in tax incentives to the Phoenix retail-and-housing development CityNorth can proceed, the Arizona Supreme Court ruled Monday – even though the deal “quite likely” violated the state Constitution.
Though the court allowed the deal, its ruling laid out strict new provisions on tax incentives. Those rules could have a deep impact on future tax-incentive deals, which cities have long used to attract new commercial development and the accompanying sales-tax revenues.
There are implication here in southern Arizona as well.
Here are existing agreements the town of Oro Valley has with developers.
• Oro Valley Marketplace: Vestar Development Co. in Phoenix gets 45 percent – up to $23.2 million – of sales taxes generated at the shopping center.
• Oracle Crossings: B.P. Oracle Crossings Investors LLC gets 46 percent of sales taxes – up to $6.5 million – of sales taxes generated at the shopping center.
• Steam Pump Village: Evergreen-Steam Pump LLC gets 40 percent of sales taxes.
• Hilton Tucson El Conquistador Golf and Tennis Resort gets a rebate of one-third of the town’s 6 percent bed tax.
• The town also has an agreement with Cañada del Oro Partners, whose projects remain undeveloped. Details were not available.
Capitol Media Services’ Howard Fischer contributed to this story.
The state wide impact will be felt. From the Explorer:
Turken v. Gordon has been pursued in the court system by The Goldwater Institute. In prepared remarks Monday, Goldwater litigation director Clint Bolick said the court’s decision “vindicates a core protection of taxpayer rights in our state constitution. The days of rampant corporate welfare in Arizona are coming to an end.”
“The ruling should stop schemes that government concocts to subsidize developers based on grandiose promises that often fail to materialize,” Bolick said. “Although we’re disappointed that the Court allowed the CityNorth deal to stand for now, that development has proved to be such a disaster that it’s doubtful taxpayer money will ever change hands. CityNorth will stand as a monument to government folly.”
Pima County is being run by, controlled and directed by a very strong environmental lobby that has the singular focus of keeping the environment priority one and jobs, affordable housing and strong families a distant second.
• Covers 9,184 square miles
o 42.1% is owned by the San Xavier, Pascua Yaqui and Tohono O’odham
o 14.9% is owned by state of Arizona
o 14.9% is Forest and BLM Land
o 12.1% other public lands
o 17.1% is individually or corporately owned
o Current indebtedness $757 million, if include bonds passed but not sold it goes over $1.07 billion
BOND FUNDS: Approved by 66% of voters – no budget crisis in 2004.
• All $174.3 million of the 2004 Open Space Bond funds have now been spent.
o $164.3 million for open space and habitat protection and another
o $10 million to protect Davis-Monthan Air Force Base from urban encroachment.
o Purchased over 51,000 acres of private land
o 127,000 acres of leased State Trust Lands
• PAY BACK: with interest that is $226.59 million dollars ($1.30 payback per $1 spent according to letter Ray Carroll to Chuck Huckelberry, December 29, 2009)
NEW BOND REQUEST FOR NOVEMBER 2010: $285 million
• The Conservation Acquisition Commission (CAC) Recommending a new bond for $285 million for more open space
• PAYBACK: with interest that is $370.5 million.
• County Administrator Chuck Huckelberry is recommendation $120 million.
• PAYBACK: $156 million
Take a look at Boulder Colorado, the first municipality in the US to embarked on an aggresive no growth policy in the 1960′s.
In the decade of the 1950s, Boulder’s population grew from 25,000 to 37,000 and during the 1960s it grew by a whopping 29,000 to reach 66,000. Some initial efforts to manage this growth included the “Blue Line,” a citizen-initiated amendment to Boulder’s charter in 1959 that restricted the extension of city water service above an elevation of 5,750 feet. It was later extended by ordinance to sewer service. While a few exceptions have been granted at the ballot box, the effect of this measure was to limit the city from extending water service to properties along the mountain backdrop. Property owners can still develop in the county, but at much lower densities than is typical in the city and only with individual water and septic systems.
Another important growth management program began in 1967, when Boulder became the first city in the United States to pass a tax specifically dedicated to preserve open space. This open space system forms the outer extent of the Boulder Valley, a joint planning area between the city and county.
What are the results after 50 years of restricting land use?
What Are the Pitfalls?
· Boulder’s region encompasses the whole county. Therefore, the city’s surging job growth and limitations on residential growth have had a significant impact on housing demand in adjoining communities. The most striking example is the nearby town of Superior. In 1990 the population of Superior was 255; in 1996 it was 3,377. It has practically no jobs and no sales tax base. This regional imbalance between jobs and housing has created tremendous problems with traffic congestion, lack of affordable housing and school facility needs.
· Getting a hold on sprawl is only half the equation. What happens within the urban service area is the other. In Boulder’s initial planning efforts, there was a clear expression of a preference for infill and redevelopment over sprawl. Since there is no requirement that a certain amount of land be contained within its service area (such as the 20-year required land supply within Oregon’s urban growth boundaries), Boulder does not have to make a trade-off between expansion versus infill and redevelopment. However, it is increasingly difficult to convince specific neighborhoods and the community as a whole that additional density is in their best interests. not grow.
An old friend of mine has a saying, “Even the worm learns.” Prod one several hundred times, he says, and it will learn to avoid the prodder. As California enters its annual budget drama, I can’t help but wonder if the wisdom of the elected politicians here in the state capital equals that of the earthworm.
The state is in a precarious position, with a 12.3% unemployment rate (more than two points higher than the national average) and a budget $20 billion in the red (only months after the last budget fix closed a large deficit). Productive Californians are leaving for states with less-punishing regulatory and tax regimes. Yet so far there isn’t a broad consensus to do much about those who have prodded the state into its current position: public employee unions that drive costs up and fight to block spending cuts.
Earlier this month, Gov. Arnold Schwarzenegger proposed a budget that calls for a $6.9 billion handout from Washington (unlikely to be forthcoming) and vows to protect current education funding, 40% of the state’s budget. He does want to eliminate the Calworks welfare-to-work program and enact a 5% pay cut for state employees. These are reasonable ideas, but also politically unlikely.
As the Sacramento Bee’s veteran columnist Dan Walters recently put it, the governor’s budget is “disconnected from economic and political reality.” Mr. Walters suspects what will happen next: “Most likely, [the governor] and lawmakers will, to use his own phrase, ‘kick the can down the road’ with some more accounting tricks and other gimmicks, and dump the mess on whoever is ill-fated to become governor a year hence.”
Mr. Walters’ Jan. 10 column was fittingly titled, “Schwarzenegger Reverts to Fantasy with Budget Proposal.” Shortly before releasing his budget, the governor and Democratic state Senate President Pro Tem Darrell Steinberg held a self-congratulatory news conference. Mr. Steinberg used the spotlight to bemoan what he deemed to be unfair attacks on California. Mr. Schwarzenegger told a hokey story about his pet pig and pony working together to break into the dog’s food. It was an example, he said, of how “last year, we here in this room did some great things working together.”
Meanwhile, activists are fast at work. For example, the Bay Area Council, a moderate business organization, is pushing for a constitutional convention to reshape California’s textbook-sized constitution. The council’s aim is to ditch a constitutional provision that requires a two-thirds vote in the legislature to pass budgets. Other reforms being proposed include a plan to institute a part-time legislature and another plan to require legislators to pass drug tests. None of these ideas will ratchet down state spending.
To do that California needs to take on its public employee unions.
Approximately 85% of the state’s 235,000 employees (not including higher education employees) are unionized. As the governor noted during his $83 billion budget roll-out, over the past decade pension costs for public employees increased 2,000%. State revenues increased only 24% over the same period. A Schwarzenegger adviser wrote in the San Jose Mercury News in the past few days that, “This year alone, $3 billion was diverted to pension costs from other programs.” There are now more than 15,000 government retirees statewide who receive pensions that exceed $100,000 a year, according to the California Foundation for Fiscal Responsibility.
Many of these retirees are former police officers, firefighters, and prison guards who can retire at age 50 with a pension that equals 90% of their final year’s pay. The pensions for these (and all other retirees) increase each year with inflation and are guaranteed by taxpayers forever—regardless of what happens in the economy or whether the state’s pensions funds have been fully funded (which they haven’t been).
A 2008 state commission pegged California’s unfunded pension liability at $63.5 billion, which will be amortized over several decades. That liability, released before the precipitous drop in stock-market and real-estate values, certainly will soar.
One idea gaining traction is to create a two-tier pension system to offer lesser benefits to new employees. That’s a good start, but it would still leave tens of thousands of state employees in line to receive lucrative benefits that the state must find future revenues to pay for. Another is to enact paycheck protections that require union officials to get permission from their members before spending union dues on politics (something that would undercut union power).
My hope is that these and other reforms find support in unlikely places. Former Assembly Speaker Willie Brown, a well-known liberal voice, recently wrote this in the San Francisco Chronicle: “The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But we politicians—pushed by our friends in labor—gradually expanded pay and benefits . . . while keeping the job protections and layering on incredibly generous retirement packages. . . . [A]t some point, someone is going to have to get honest about the fact.”
State Treasurer Bill Lockyer, another prominent liberal Democrat, told a legislative hearing in October that public employee pensions would “bankrupt” the state. And the chief actuary for the California Public Employees Retirement System has called the current pension situation “unsustainable.”
As the state careens toward insolvency, these remarks are the first sign that some people are learning the lesson of the earthworm.
Mr. Greenhut is director of the Pacific Research Institute’s journalism center and author of the new book “Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation” (The Forum Press).
The City of Tucson caved to neighborhood pressure in 1999 and passed an ordinance limiting the size of retail ‘big box’ stores in the city limits to under 100,000 square feet.
To appease a few neighbors (surrounding what was El Con Mall) the geniuses leading the city of Tucson cut off a revenue stream equal to more than $100m. One large retail store can generate $2 to $4 million per year in general fund sales tax collection for a municipality. Two to five big boxes hitting the streets per year and you can see how the dollars add up. The reality is that these retailers will still come to Pima County but locate outside of city limits. Marana, OroValley and Sahuarita benefit and you as a consumer have to drive a little further to buy you a years supply of pickles.
From today’s paper a new Costco has finally made it through the planning stage after years of wrangling with neighborhoods, bureaucrats and politicians. Not only did it take years to launch but they went through the shake down of kick backs to job training fluff organizations, grants to non profits and neighborhood improvements. Really makes you want to come to Tucson doesn’t it.
The new Costco would measure 180,000 square feet, which is a “big-box” under Tucson code that classifies every store of more than 100,000 square feet as a big-box store that has to follow special rules.
After years of city debate about the property, the City Council voted 6-1 in March 2007 to allow a big box on site, but with extra conditions put on Eastbourne, including $2 million to pay for job training, business-assistance programs, neighborhood improvements, economic-improvement grants to area nonprofit organizations, and improvements for pedestrian access and roads. That money will be matched with $4.5 million the city expects from construction sales taxes at the site.
Jim Portner, a consultant for the project’s developers, said the 14 acres will be sold to Costco after the final construction permits are obtained from the city. The remaining retail will be developed by Eastbourne and Retail West, he said, although there are no other stores currently signed on to move in.
It’s a great first step maybe next time we can get one approved quicker without shaking down the big bad developer.
Firm’s input on Kino Hospital shushed: Pima supervisors were not briefed on analysts’ full report
By Erica Meltzer The Arizona Daily Star, Tucson
Date: Sunday, June 7 2009
Jun. 7–Find someone else to run Kino Hospital.
That was the top recommendation of a health-care consulting firm hired by Pima County to review the operations of University Physicians Healthcare, the physicians group that runs the hospital at Kino under a long-term lease with the county.
However, County Administrator Chuck Huckelberry did not include that, or four other recommendations, when he sent the report to the Board of Supervisors in April.
Huckelberry said he left them out because they were unprofessional, unsupported and unactionable.
“The report was fine, as far as it went, but the recommendations were not,” he said. “They didn’t explain why they drew that conclusion. Are we supposed to terminate that lease on that one sentence and reorganize?”
But Supervisor Ann Day, a longtime critic of hospital management, said the county cannot continue to support UPH at the levels it has requested — $30 million next year and possibly more in the future.
She believes Huckelberry withheld information that made UPH look bad. Huckelberry only revealed the recommendations when she requested them, after learning from another source that they had been omitted.
“It’s a very scathing report, and it cries out for more digging by an independent auditor,” she said.
The other recommendations were that UPH overhaul its pricing, billing, bad debt and charity-case procedures to bring in more money; change doctor compensation and overhead allocation to reflect market rates; restructure staffing throughout the organization, including reducing staff and reassigning workers; and maximizing revenue from residency programs, some costs of which are reimbursed by the federal government.
University Physicians CEO Larry Aldrich called the recommendation to dump his company “outrageous.”
A representative of HFS Consultants could not be reached Friday.
University Physicians Healthcare, which took over operations of the county hospital at Kino in 2004, has asked the county to pay it an additional $20 million next year, on top of the $10 million the organization already receives under the lease agreement, and commit to an ongoing annual subsidy of $30 million or more for the foreseeable future.
The county lost $30 million the last year it ran Kino as strictly a psychiatric facility. The lease agreement with UPH called for a subsidy that would decline over time as the hospital became self-supporting.
UPH officials say they have invested far more than they ever planned to turn the hospital into the only full-service medical center serving the South Side and all of southern Pima County.
Without an increased subsidy, the hospital would have to cut drastically the services it provides and turn away far more uninsured patients, creating more of a burden on other area hospitals, they say.
Huckelberry hired HFS Consultants earlier this year to examine UPH’s $30 million request, the hospital’s overhead and rates of uncompensated care. The initial report raised questions about the amount spent on administrative costs, billing procedures, how uncompensated care is calculated and other aspects of UPH’s management. UPH administration strongly disputed nearly every finding in the report.
HFS Consultants said it could do a more detailed report for another $192,000. The initial report cost $30,000 and the contract was awarded by Huckelberry, rather than going to the Board of Supervisors as larger contracts must.
Huckelberry said it makes more sense to wait for a report from Chartis Group, a firm hired by the College of Medicine and UPH, a report expected this fall.
“That’s like having the fox be the security consultant for the hen house,” Day said. “We need an independent analysis to find out what the truth is and isn’t.”
But Huckelberry said the Chartis Group is working closely with the county and looking at every aspect of how the hospital is run. He said there was no reason to believe just because UPH and the University of Arizona are paying for the study that it will be favorable to those groups.
Huckelberry said he does not believe consultants tailor their recommendations based on who pays the bills.
“To think otherwise is to see the system as absolutely jaded. I’m not that jaded,” he said.
Aldrich said University Physicians, having invested more than $40 million in improving Kino, would be happy to explore alternative management arrangements, but he did not believe anyone else would be interested.
“It’s an outrageous conclusion based on what they had to work with in a very short period of time,” he said. “We disagree with any conclusion that disparages the leadership. That said, if there is another way to run this, we welcome that conversation.”
He pointed out that the county lost as much money running Kino as a psychiatric facility as UPH does running a full-service medical center.
Supervisor Richard Elias said the report raises concerns that must be addressed, but the recommendations were not realistic and would have required the county to break its contract with UPH.
Elias said Kino’s financial situation needs to be part of the county’s larger budget discussions, but county support must continue.
“It doesn’t change the reality that a lot of people in that community are not insured, and Kino is a vital service,” he said. “It needs to remain open with a general hospital license.”
Contact reporter Erica Meltzer at 807-7790 or email@example.com
To see more of The Arizona Daily Star, or to subscribe to the newspaper, go to http://www.azstarnet.com . Copyright (c) 2009, The Arizona Daily Star, Tucson Distributed by McClatchy-Tribune Information Services. For reprints, email firstname.lastname@example.org , call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
September 21, 2009
Valley of denial
ASU’s Morrison Institute has always labored under two Sisyphean tasks. First, its public-policy scholarship necessarily antagonized the state’s ruling elites — hence, it was forced to pull its punches to avoid losing funding, and, even then, the elites wouldn’t accept its work. Second, it was treated in the media as the “liberal” equivalent of the (Bob) Goldwater Institute. This, even though the “Goldwater” Institute is an arm of the national right-wing advocacy machine, not a genuine think tank that engages in open-minded, peer-reviewed research. With the loss a few years ago of my sometime collaborator Mary Jo Waits, author of Morrison’s most prescient and important works (Five Shoes, Meds and Eds), the institute became even more marginalized. Now Morrison is trying once again to become part of the conversation under the leadership of Sue Clark-Johnson, retired Arizona Republic publisher and close friend of ASU President Michael Crow.
Good luck. Unfortunately, the first effort, Forum 411, seems destined for the dustbin of forgotten, well-intended reports at an even faster speed than its predecessors. It is brief, as to be expected from an entity now headed by a former Gannett executive, and strives to be inoffensive. Think of a pep talk. Anthony Robbins on economic development. It states two broad themes: the obvious (Arizona needs to diversify its economy) and the untrue (which I will deal with momentarily). Worst of all, it leaves critical information entirely out. The loss of Waits’ intellectual heft is obvious. So, too, is the continued bowing before the Real Estate Industrial Complex (the report’s sponsor is the suburban mall developer, Westcor).
(Some disclosure: For years, Clark-Johnson rebuffed efforts by the powerful developers and house builders to fire me as a columnist for the Republic (until the economic collapse made the need to please advertisers paramount). Even though I pulled my own punches for self-preservation, her protection allowed me to tell the truth about Arizona and Phoenix’s dire situation, including predicting the current depression there, as well as supporting a variety of good civic causes, such as light rail. At her behest, I accepted a Morrison fellowship in 2003-2004, although I declined any compensation and did not write about Morrison or its work in my column during that time.)
This first “411″ is entitled, The Road to Recovery: Lessons from Arizona’s First Economy. Its conceit is that Arizona today can learn from the state’s rebound from the Great Depression. Clever, but bad history. As happens with much of the Information Center’s “journalism,” the state of Arizona is misleadingly conflated with metro Phoenix. In fact, the Depression was very hard on the copper-mining districts of the state. Its effects were much less severe in the capital city. The Great Depression did not damage Arizona in the same way as this Great Recession.
Unlike what metro Phoenix had become in the 2000s, the old agricultural-ranching economy was relatively sustainable; even mining in the state was more “real” than the housing bubble. In addition, the initial diversification beyond the “Five Cs” was not undertaken by Arizona — where state officials were as reactionary then as now, although not insane — but by forward-leaning leaders of Phoenix. Arizona was a large, diverse state that did not move in lockstep with Phoenix and had very different issues and challenges.
The report goes on to examine the state’s “cluster” strategy in the 1990s without stating the essential truth: the attempt to build such a tech economy failed because of lack of focus and funding. Some semiconductor manufacturing and a few other legacies of the 1950s-1960s economic efforts remained; Tucson was somewhat successful with optics. But compared with the leaps made by rival cities in that decade, Arizona metros turned in abysmal performance. No major companies were created. No major high-wage industries cornered. Unlike in India, call centers did not prove to be gateways into higher-skill technology jobs and sectors. Hundreds of tech companies were lost and Motorola began its long retreat. I recall an anecdote from the early 2000s, when I was hell-raising in the paper three times a week. The Greater Phoenix Economic Council undertook a confidential study: Did the clusters work, and what was the truth about metro Phoenix’s wages compared with its peers? At one meeting, as the results were discussed, a participant gasped aloud, “My God, Talton is right.”
The reality is that the Phoenix leaders from the late 1940s through the 1960s achieved much: developing tech and aerospace sectors, while Phoenix continued to be a major agricultural player (something that allowed the region to export and have some food self-sufficiency, not to mention cooler nights). That was diversification. Indeed, until the 1980s, wages and incomes in Phoenix tracked or exceeded the nation and peer cities, before beginning to fall behind thereafter. Another local effort came after the 1990 S&L crash, when GPEC was formed under the dynamic leadership of Ioanna Morfessis. It succeeded for a time, but Phoenix lost its key corporate engines, especially Dial and Valley National Bank. Economic development efforts faded — and things seemed “good.” The economy was “growing.” Yet this growth was in population and construction, rather than incomes, venture capital, initial public offerings, educational improvements and other measures of competitiveness and social good. The sometime successes, whether Intel’s new fab or Amazon’s distribution centers, were not enough to create a diverse economy and sustainable prosperity for a metro area of this size. Still, the Growth Machine made the elites wildly rich and any reform efforts provoked stout resistance.
When the economy crashed in 1929 (and much of the agriculture economy had been ailing through the 1920s), Arizona’s Five Cs remained viable awaiting a broader revival. And, critically, the state had a very small population: 436,000 in 1930. When the economy crashed in 2007, metro Phoenix’s tech sector was smaller as a proportion of the total economy than at any time since probably 1950. All the “Cs” were gone, except for (rapidly warming) climate. The entire state was dangerously dependent on the intertwined sectors of housing, real estate, home-improvement, low-wage service jobs. All were a Ponzi scheme, not only because of the national financial frauds but also because they were contingent on continued large, unsustainable rises in population. Now metro Phoenix has 4 million people, which brings huge “carrying costs” just to keep the economy afloat and handle the bare infrastructure needs and urban problems of such a huge metro.
So a look back to the Depression is largely unhelpful. So, too, are the anodyne suggestions that mark the report’s conclusion. All fine. I love Science Foundation Arizona, too (Ironic that Ireland, its model, crashed in a Phoenix-style real-estate bubble). Too bad the Legislature stabbed it, and the universities, in the back. But the report is very 2003, when the hopes of Napolitano, TGen, etc. were still fresh. It avoids a hard look at where Phoenix and the state (still distinct entities) really stand today.
The realities now are far different:
1. Intense population growth, and the huge debt bubble, to support the old sprawl of the Real Estate Industrial Complex, may not come back.
2. State finances are a disaster, making funding for leap-frog initiatives difficult and even making it impossible to catch up on the infrastructure needs of the past, that were pushed forward to allow quick profits for the land barons. Phoenix and Tucson are the largest close metros in the nation with no passenger rail service, to take but one example. The state has been badly wounded by years of tax cutting, and worse, a tax structure totally incompatible with the needs of a populous, highly urbanized state.
3. Arizona is paralyzed by political extremists and bigots, a crazy show that conveniently perpetuates the status quo. On the national and world stage, it turns stomachs. Top scientists and engineers will not come to a place in significant numbers when a hostile Legislature is always cutting funding for research while the dominant political party fires up its “base” by attacking people who aren’t white, straight and suburban. Arizona can’t understand that in today’s economy, government must do some things very well — from education to infrastructure, etc. It’s true from China to North Carolina. The nihilistic reactionaries of Arizona are one of its biggest impediments. Unfortunately, they’re in charge. For years they have underfunded or not funded key investments for real economic growth, such as the universities. They have refused to employ the economic-development best practices used successfully by such communist regimes as Georgia, Alabama and the Carolinas.
4. The “good years” were squandered. This is especially true with the Phoenix Biomedical Campus, which by this time should have been built out with hospital(s), medical, nursing and pharma schools, more research operations and for-profit pharma and biomed manufacturing all on one site, with the critical mass the creates breakthroughs. Now there seems no will to move ahead, even as Arizona has been left even further behind by its rivals.
5. The competitive landscape is changing even more than before the crash. China will become more of an economic force than ever, yet Arizona is doing nothing to attract foreign direct investment or build trade. China and Europe are making leaps ahead of America in renewable energy, and Arizona is not on the radar even within the backward U.S. Neither Arizona nor Phoenix even have a strategy to recruit companies from the LA area.
6. Suburban sprawl and political Balkanization continue to kill Phoenix. They prevent even a coherent “brand” in the world economy — what the hell is “the Valley?”; nothing they know about in Shanghai. Metro areas, not states, are the new competitive units of the world economy. It’s city vs. city — but not Chandler against Gilbert for sales taxes. Yet the little mandarins of the suburbs would rather fight to keep the magical name “Phoenix” from even being uttered.
7. Degradation of quality of life and the environment continue apace. Phoenix lacks the attractive city assets of its rivals — even though those rivals have lookalike suburbs, too. This is a particular disadvantage when dealing with such a populous place; Phoenix is not Santa Fe, or even Fresno. Phoenix is too much one flavor. And there’s no Plan B: to retrofit suburbia for the future; create high-quality density and walkable town centers with transit, etc. Hot weather and endless driving from the subdivision to a Westcor mall may attract retirees and a self-selecting cohort of Midwestern and inland California suburbanites. Those “assets” and Arizona intolerance won’t attract the world’s most talented workers. Combined with the state’s backwardness and political extremism, they will continue to repel capital for anything but, maybe, real estate.
8. The underclass time bomb continues to tick. Millions are cut off from the economic mainstream and a ladder up, stuck in a horrible school system, segregated in linear slums. It’s a tragic waste of human capital, a moral crime and a social explosion waiting to happen.
9. Arizona is less prepared than ever for the realities of the 21st century, including climate change and peak oil. It is among the most vulnerable states to the consequences. It is unwilling even to acknowledge its own water situation and take the aggressive land-use steps to address it.
None of this is in the Morrison report, which concludes: “We have matured as a state in economic terms and dynamics, and now is the time to put that maturity and knowledge to work…” Not really. The elites are just waiting for the Growth Machine to sputter to life — Please, God, give me one more bubble… The reigning boosterism, delusion and denial prevent discussion, much less action, on the huge issues that will affect Phoenix and Arizona, whether they want it or not.
I can’t wait for the “Goldwater” Institute and its sock puppet on the Information Center’s editorial page to strike back at this socialist Morrison manifesto.
Excuse me: I should have said it in Kook: SOCIALIST MANIFESTO!!!
TrackBack URL for this entry:
Listed below are links to weblogs that reference Valley of denial:
- September 2012
- August 2012
- July 2012
- April 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008