Economic Development

Your government budget

Something to ponder when you hear about public employee pensions and the state or local government budget.

Goldwater Institute Daily
August 26, 2010

Federal health care bill keeping job creation on hold
by Byron Schlomach, Ph.D.

The nation’s high unemployment rate has barely fallen this year, in part because many businesses are waiting for the other shoe to drop from federal health care reform.

At this point, business people can only guess at what new employees will cost in the near future. Already, health care benefits constitute almost 8 percent of the total cost of an employee. Though these costs were rising before, they did so predictably.

Now, the Arizona Department of Administration has warned of a previously unexpected 37 percent increase in state employee health care costs due to federal reform. That follows announcements by John Deere and AT&T of unexpected expenses of $150 million and $1 billion, respectively, also due to the federal health care bill.

Michael Fleisher, president of Bogen Communications in New Jersey, recently wrote of an unexpected and extraordinary 28 percent increase in his company’s health insurance premiums. “As much as I might want to hire new salespeople, engineers and marketing staff in an effort to grow, I would be increasing my company’s vulnerability to government decisions to raise taxes, to policies that make health insurance more expensive, and to the difficulties of this economic environment,” he wrote in the Wall Street Journal.

Similarly, Steve Wynn, the hotel-casino magnate, while discussing new ventures in China, told CNBC, “No one in the (U.S.) business community from one coast to another has any idea what’s next…The uncertainty of the business climate in America is frightening, frightening to everybody, and it is delaying a recovery.”

Add the many thousands of regulations yet to be written to the current almost-3,000 pages of health reform legislation. It’s no wonder that entrepreneurs are skittish. The certainty needed to inspire widespread job growth will only return when this “reform” is stopped.

Dr. Byron Schlomach is an economist and the director of the Center for Economic Prosperity at the Goldwater Institute.

Business fights higher capital gains, dividends rates
Business Courier of Cincinnati - by Kent Hoover Washington Bureau Chief

Americans will invest less in U.S. businesses unless Congress prevents a scheduled tax increase on capital gains and dividends.

That’s the argument business groups are making as the calendar creeps closer to Jan. 1, when the tax rate on most capital gains is scheduled to increase from 15 percent to 20 percent. The tax rate on qualified dividends will increase from 15 percent to the tax rate in effect for each taxpayer’s ordinary income, which could range up to 39.6 percent next year.

In a letter to Congress, 453 businesses and trade associations urged Congress to maintain the current 15 percent tax rate on capital gains and dividends.

Increasing these taxes “could derail America’s fragile economic recovery,” the letter stated. The effects of such a tax hike “include deterring the use of capital in ways that will grow the economy and hence maintain and create jobs, incentivizing companies to use excessive debt financing, and discouraging businesses from paying dividends.”

Read more: Business fights higher capital gains, dividends rates - Business Courier of Cincinnati

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From Neal Boortz - In the great push to pass ObamaCare, politicians promised us many things. They did this without actually reading the legislation. Remember, we were supposed to “pass the legislation so we can find out what is in it.” So one of these promises made prior to the passage of ObamaCare was that over four million companies would qualify for a tax credit to provide health insurance to employees. Now the truth is out. The National Federation of Independent Businesses (NFIB) found that fewer than two million companies will qualify for tax credits. The NFIB points out a few examples of who will be ineligible for a tax credit:

• An employer with 17 workers and an average wage of $39,000 will not qualify for a tax credit.
   
• None of the 23 million-plus self employed Americans can get the tax credit either.
   
• Less than one third of California’s employers would qualify for a tax credit.

That’s just to name a few. Isn’t it amazing what these people have managed to pull over the eyes of the American public? Ultimately - you will suffer. Businesses forced to provide health insurance for employers will have less money to invest or hire new workers or give you a raise. These companies will pass off those costs to the taxpayers. Remember, businesses don’t pay taxes .. people do. Just another unintended consequence of ObamaCare.

It’s good to know that the Chamber is fiddling while Tucson burns……..

Chamber kitchen gets a facelift

Jack Camper, President & CEO of the Tucson Metropolitan Chamber of Commerce

After the June Scholarship Reception, this year’s Chairman of the Board, Gary Clark, Vice President-SW Gas, wanted to know who prepared the great food.  It turns out that the Chamber’s own Cindy Brown was the caterer that month.  When Gary complimented her on the scrumptious hors d’oeuvres, she led him into the kitchen and pointed to the two-burner cook top, the microwave oven, and the toaster oven.  “That’s what we use when the Chamber caters its own events,” she told him.

As impressed as he was for her resourcefulness, Gary nonetheless saw a need to revamp the thirty-plus year old kitchen.  He offered to put in a gas range that not only had four burners, but a full oven as well.

The original kitchen was never designed for much more than coffee brewing, so adding the range turned into a major piece of work.  Gary and SW Gas purchased not only the stove but a microwave/oven vent from Tucson Appliances as well.  Another board member, Colleen Edwards, owner of Tucson Appliances, on hearing the purpose of the purchase, arranged for a deep discount on the purchase of  the appliances.  When Gary contacted Mike Motzkin, owner of Pioneer Plumbing, to install the gas lines, he also wanted to help out and offered to do the work for free.

Matt Hazelton, Supervisor/Customer Services for SW Gas and Jim Foster, Manager for Pioneer Plumbing, worked together with their respective crews to ensure that all the details were handled professionally and quickly.  In the span of just three weeks (which, of course, included acquisition of the necessary city permits), the Chamber’s kitchen had the appliances in place.  Next will come new countertops and sink.

The Tucson Chamber owes Gary Clark, SW Gas and all of these great business leaders and their companies a huge “thank you!”  Because of their efforts and generosity, the Chamber will ultimately have a brand new kitchen.  Don’t forget to come by and see it the next time you’re in the Chamber office.

By Joe Higgins and Chris DeSimone, Inside Tucson Business
Published on Friday, August 13th, 2010

Read a newspaper, turn on the TV news or listen to the radio and you start hearing the same buzz words over and over from local power brokers and politicians. They’ve been using them so long, you can’t help but notice they don’t add up.

At the suggestion of listeners to our radio show, we’ve put together our Wake Up, Tucson dictionary of definitions to these common buzzwords and phrases.

• Transparency or accountability.
Implied meaning: As stewards of taxpayers’ hard-earned dollars, governments constantly strive to expose insider or backroom deals and honestly report the financial impacts of decisions.   Print this storyEmail this storyPost a CommentShareThis
 
Real meaning: We will do fancy multimedia presentations with beautiful photos of things like folklorico dancers, but never actually show you anything important. We hire consultants to justify decisions we already know we are going to make. Pima County government has an additional meaning: If you are a county employee and your name appears in the news media, clean out your desk.

• The half-cent additional city sales tax is for cops and fire.
Implied meaning: The tax on the Nov. 2 ballot will go to funding necessary basic city services.

Real meaning: We will throw the money at fire and cops; meanwhile we’ll continue using city money to subsidize $5 yoga classes and Sun Tran services. If the new tax were really for cops and fire, why would Councilwoman Regina Romero have told Sun Tran’s striking Teamsters to “wait until the new sales tax is passed” when the city has more money in the kitty.

• Public-private partnership.
Implied meaning: A symbiotic relationship between a government and private businesses that will bear mutually beneficial economic fruit.

Real meaning: The business model is so bad that no private business would dream of sinking its own money into it. (Think downtown Tucson convention hotel.)

• Think outside the box.
Implied meaning: We are a cutting-edge organization constantly looking outside the norms of the typical boring way of thinking.

Real meaning: We can’t come up with an original thought and besides, any idea that does come up never gets implemented so we have to say something like this to make it look like we might actually do something some day.

• Blue ribbon panel.
Implied meaning: We have gathered the area’s brightest stakeholders to solicit ideas, debate them and present the resulting solutions in a clear, concise manner.

Real meaning: The place where good ideas go to die.

• Regionalism.
Implied meaning: A broad-based and inclusive partnership of municipalities working together to achieve a common goal by realizing the economies of scale and complimenting each of the other’s strengths and weaknesses.

Real meaning: A super government put into place by Pima County with the City of Tucson supposedly an equal. The goal is that once total control of water and wastewater is complete, the “region” can start to be turned back to the way it was in the 1940s. Meanwhile, the battle rages on the outskirts where the real region’s last hopes for progress lie in the the municipalities of Marana, Oro Valley and Sahuarita. (Bring up the “Star Wars” theme music.)

• Small business day (as proclaimed by the Tucson city council leading up to the November 2009 election).
Implied meaning:  The attitude of the city and it’s bureaucratic red tape is improving so much, it’s a snap to open a business in Tucson. Things are “shovel-ready” and ready to go.

Real meaning: The city needs revenue so it has come up with a bunch of new fees to nickel-and-dime you when you try to open a small business. As an example, how about the city’s new $5,000 non-refundable application fee for temporary revocable easement review? In Oro Valley,a full Development Review Board review is $350.

• It’s for the children.
Implied meaning: The increased taxes and fees government is proposing on businesses will go to programs that will benefit the most vulnerable members of our society.

Real meaning: The extra money will go to politicians’ pet projects to increase reliance on government by the most vulnerable in our society, thus helping to reassure politicians’ re-election.

There are others we can’t fit in this column, such as “the four-mile $160 million modern streetcar will spur development;” “we have to build a downtown convention center hotel to save the annual gem shows;” “the $200 million spent so far by Rio Nuevo on downtown redevelopment sets the stage for private investment;” “spending $46 million on a $31 million downtown underpass is a great deal;” “I support copper mining but I’m concerned about how much water Rosemont Copper will use;” “the orange griffen and Scott Avenue is the heartbeat of downtown Tucson;” and “Huntsville, Ala., has nothing on Tucson.”

There are more buzzwords out there and we’d like to hear them. Send us your suggestions at the e-mail address below.

Consider it an educational as well as fun exercise. This stuff would be funny if it weren’t so painfully true.

Contact Joe Higgins and Chris DeSimone at wakeuptucson@gmail.com. They host “Wake Up Tucson,” 6-8 a.m. weekdays on The Voice KVOI 1030-AM. Their blog is at www.TucsonChoices.com.

Brian Miller throws his support behind Jonathan Paton

Paton: “Now is the time for us to come together as conservatives”

Aqua Vita, a neighborhood grocery store caught fire on April 30th and had to shut down to remodel. They are reopening this week. The Star interviewed the owner and who does he site as a stumbling block to reopen?  If the City of Tucson wants and needs more money for core services EXPAND the pie.

How hard would it be to help this guy recover quickly after his entire life has been shaken. Wouldn’t it be amazing if this guys quote was; “I couldn’t believe how helpful  the City of Tucson’s was in getting reopened and getting my staff back to work.” Doesn’t anyone else get it?

The Star talked with Aqua Vita owner Harmeet Singh about the store’s fire, closure and reopening:

Q. How much damage did the fire do?

A. About $400,000. The electrical system was gone, and the walk-in cooler was gone.

Q. How did you learn about the fire?

A. The Fire Department called me at 6 a.m. and woke me up and said, “Your store is on fire.” I was very surprised. The electrical system was more than five years old. Usually, this kind of electrical work goes for 30 to 40 years with no problem. We couldn’t figure out why this happened.

Q. Did it take longer to get ready to reopen than you expected?

A. Oh yeah, way longer. I expected it would be fixed in two to 2 1/2 weeks. With the insurance and the city of Tucson permitting, it took a lot longer.

Q. Was that frustrating?

A. Big time. But I didn’t have to deal with the permitting and the other stuff. The electrical contractor dealt with it. They worked with TEP (Tucson Electric Power Co.) to get the electrical equipment fixed.

Q. Did your insurance cover it all?

A. It partially covered the damage, but I still had to pay money out of my own pocket.

Q. Did you make any other changes?

A. We upgraded everything to 2010 city codes. . . . We installed energy-saving equipment - all the computers, water machines and a new water system. We had to replace the whole inventory in the store. We didn’t want to be selling three-month-old stuff to customers.

Q. Have you been profitable until now, and will you be profitable this year after the fire?

A. Before the fire, the business was going up every single year for the past three years, despite the recession. We have a good staff here. We provide better service to every single customer. People like shopping here. The fire will definitely hurt our profits, for sure, but we’re still hoping for a profit this year.