Archive for January, 2010

Denogean: Food tasty, politics spicy at Rigo’s place

by Anne T. Denogean on Jun. 09, 2006, under Local

Our goals and convictions that drive us to see change in Tucson

WAKE UP TUCSON: Resolutions

By Joe Higgins and Chris DeSimone, special for Inside Tucson Business
Published on Saturday, January 02, 2010

It’s resolution time and we are throwing ours into the ring. Save this article and check back on us when 2011 comes.

A new decade is kicking off with a down economy, our local governments are scrambling to hold on and if you are a business owner like us, you are waiting to see the light at the end of the tunnel.

During difficult times, setting goals and resolutions are more important than ever. When it comes to 2010 resolutions, we are committed to seeing them through.

Each morning the clock buzzer goes off at the crack of too early and coffee starts brewing. We cruise down the road to start our morning radio show at 6 a.m. Day in and day out for two hours we bring it, we serve it up; we do our best to wake this place up.

If you haven’t tuned in yet, what you’ll hear is a cross section of business owners and leaders, authors, politicians and educators sprinkled with local sports, and the best places to eat in town, (in our humble opinion.) Our job is to paint a picture for the listeners of how we think this community really runs. Our job is to Wake Up Tucson and get our community to start paying attention to the basics before it’s too late.

The radio program is just the beginning of our efforts to help change the poor business climate of the greater Tucson area. We are supply-side guys. We believe if business is allowed to thrive, the entire community benefits. All our board service, hundreds of one-on-one meetings, dozens of business events, blogs, and even this column take time away from our business and personal lives. So why the heck do we do what we do?

Below are our 2010 New Year’s resolutions and few of our motivations. Maybe just maybe, they’ll motivate you too.

• With young kids in elementary school, we hope to create opportunities for our children to stay in Tucson after graduating from the U of A. Losing more than 4,000 college graduates each year because of a lack of suitable jobs is unacceptable. The U of A is a brain factory and their end products are fleeing town and not looking back.

• We see an ever-growing pool of people seeking charitable assistance. We realize that what these struggling families need most is a good job that pays all the bills. Creating jobs and industries is not Tucson Regional Economic Opportunities’ job, it’s not the politician’s job, it’s everyone’s job. Ask yourself how much you have personally benefited from this community.

• We realize that the Tucson City Council, Board of Supervisors and legislators constantly make decisions that benefit special interest groups’ voter blocks. We will work tirelessly to end turf wars and bring the fractured business community together to finally have a seat at the table. Unless and until we get our act together, the business sector will continue to be marginalized, minimized and exploited. Check out www.ChangeTucsonChamber.com for details.

• We will be the voice for the merchants downtown. These brave souls have had their patience and loyalty repaid with insider deals, overpaid bureaucrats, too much government interference and very little progress.

• We promise to tell the community, elected officials and anyone who will listen that every day in Tucson should be “Appreciate Small Business Day.” A weak proclamation right before a city election isn’t going to cut it anymore.

• Our goal is to expose and educate the community about funding and accountability measures at the MTCVB, TREO, Downtown Partnership, Fox Theater/Tucson Convention Center and anyone else that takes our tax dollars in an effort to make our community better. If these groups are doing their job we’ll tell you, and if not, let’s just say we aren’t lacking for material.

These are some of the reasons why we do what we do and these are our resolutions for 2010.  Now ask yourself, “Why do YOU do what YOU do?”

Let 2010 be the year that you got off the sidelines and into the game, before the game is over and we’ve all lost. Learn more at ChangeTucsonChamber.com, TakeBackTucson.com, ArizonaPolicyInstitute.com and our daily blog at TucsonChoices.com.

Log on, tune in, educate yourself on the issues and get off the couch!
Contact Joe Higgins at joe@joehigginsinc.com or Chris DeSimone at provenpartner@comcast.net. They’re the hosts of “Wake Up Tucson,” which airs 6-8 a.m, weekdays on The Voice KVOI 1030-AM.

Copyright © 2010 Inside Tucson Business

Looks like the $200 billion in federal stimulus that was sent down the states last year came with a number of strings attached. The strings provided one time federal financial injections that came with multi year commitments in health care, education and unemployment. The WSJ ran an opinionthat details the financial handcuffs.

For example, the stimulus offered $80 billion for Medicaid to cover health-care costs for unemployed workers and single workers without kids. But in 2011 most of that extra federal Medicaid money vanishes. Then states will have one million more people on Medicaid with no money to pay for it.

A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable. “One of the smartest decisions we made,” says Mr. Daniels. Many governors now probably wish they had done the same.

Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries.

Worst of all, at the behest of the public employee unions, Congress imposed “maintenance of effort” spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes.

A little New Years outlook for you from the Arizona Republic. Looks like we are in for a rough few years. Tourism and construction (brought on my migration into our state) are still the big economic drivers. Comments about ‘diversifying out states economic base’ are encouraging for Phoenix but not as exciting south of the Gila.

As Arizona enters its third year of recession, recovery remains elusive.

Despite its increasing diversification, Arizona’s economy needs new residents to fill all the empty houses. It needs tourists and business meetings to fill resorts and hotels.

Arizona will bounce back economically only as quickly as its core industries revive, and that is projected to take four or five years.

But the fundamental strengths that have made the state one of the nation’s fastest-growing for decades haven’t evaporated.

Among them: sunny, scenic deserts; affordable housing; respectable clusters of semiconductor, bioscience, aerospace and defense industries; and the opportunity for year-round golf and other outdoor activities. And, of course, the Grand Canyon.

The recession has hurt Arizona more deeply than most states, and most economic analysts expect the state’s rebound to lag the nation’s largely because of severe government budget deficits and the weak real-estate market.

People must come to the state

What Arizona needs most to come roaring back is more residents. Newcomers would generate more businesses to absorb all the empty buildings and spark the construction industry.

Population growth and construction have been the core of Arizona’s economy for at least 50 years. Currently, a shortage of jobs here and an inability to sell homes elsewhere have contributed to a stunning population stall.

Economists with both Arizona Public Service Co. and Salt River Project estimate that, based on meter readings, population growth is virtually flat. The U.S. Census Bureau estimates Arizona’s net migration fell to about 42,000 in 2009, less than half of what it was every year since 2002.

Pete Ewen, an APS economist, said, “I haven’t seen this (flat population growth) before. . . . We have to go back probably to the 1920s to see something quite like that.”

He estimates there are 60,000 to 70,000 empty houses in the Phoenix area.

Without more people, commercial construction is unnecessary….

Consumers are anxious

Next, consumer spending must rise to boost businesses and replenish state coffers with sales-tax dollars.

A large reason the state’s economy is hurting and budgets are out of balance is that consumers, whose spending makes up two-thirds of the economy, have less to spend and remain hesitant to shop.

If they continue to hold back, said Jay Butler, realty-studies director at Arizona State University, Arizona’s economy could even contract again in what is known as a W-shaped recovery.

But consumers can’t be blamed, as they face layoffs, furloughs and reduced hours…..

There are reasons for hope

Finally, all the fundamental strengths must come into play.

Because Arizona has a history of recovering nicely from past recessions and it’s still a state likely to attract people who are tired of cold weather, experts expect growth to resume eventually.

Some signs to watch for: declines in the foreclosure and unemployment rates and initial claims for unemployment insurance, and increases in building permits and taxable sales.

As the global economy recovers, businesses will travel again and consumers will vacation farther afield, sparking the tourism industry.

Of course, Arizona’s economy today is broader than construction and tourism.

Topper said that when he compares Arizona’s job sectors with national averages, Arizona has slightly more construction workers than the national average but also more professional and business jobs, such as lawyers, accountants, financial experts and corporate managers.

“I think professional-business services is a position of strength for Arizona’s economy going forward,” Topper said.

Plus, it remains a state famous for offering a fresh start.

Jeff Morhet, president and chief executive officer of InNexus Biotechnology in Scottsdale, said Arizona is a mixing bowl with new residents who bring fresh visions and are not bound by tradition, past mistakes or loyalty to one industry such auto manufacturing or gaming.

Morhet, a Gilbert resident who came to Arizona 12 years ago from Texas, said, “It has got a population that is not burdened by any significant legacy or any single industry that it has to grow its way out of.”

Dennis Hoffman, also an ASU economist, harkens to a similar time, the severe recession of the late 1980s. Commercial real estate was overbuilt, savings-and-loan associations were seized by the federal government and billions in real-estate holdings were wiped out.

“People said real estate was a wasteland and no one would venture into it,” Hoffman said. “The state was in a budget mess. We threatened to raise taxes, which some people thought would doom us forever.

“We thought that people would never come back, that real estate was a bust. . . . What happened after that was five of the fastest-growing years we have ever seen.”