Posts Tagged ‘Texas’
Couldn’t resist – Inside Tucson Business ran a story on another list that we really don’t want to end up on. We are in the top 10 most expensive cities to do business in ….NATIONWIDE. Apparently there is a recalculation on how cities are measured and we as a region didn’t fair too well.
We are going to find out how if there is a typo in this statement…. “small businesses saw their annual taxes jump from $744 to $200,000, Jensen said in an e-mail.” Seems a little to big to make sense. Maybe $744 to $2000?
We made a similar list a year ago when ASBA ranked Tucson as the most unfriendly city in the state to do business in. ASBA has over 3000 members statewide that apparently aren’t afraid to point out that Tucson needs to clean up it’s act.
Tucson among 10 most expensive to do business
Published on Saturday, July 25, 2009A new study ranks Tucson among the 10 most expensive cities in the United States in which to do business.
The 15th annual Kosmont-Rose Institute Cost of Doing Business Survey released July 20 puts Tucson and Phoenix in an alphabetical list that also includes Akron, Ohio; Chicago; Jersey City, N.J.; Los Angeles; New York; Newark; Philadelphia; and San Francisco.
The survey, done by Claremont McKenna College, Claremont, Calif., ranked 411 cities in terms of their relative cost to do business. Categories include taxes, fees, economic incentives, transportation amenities, the existence of special enterprise zones, and public-private partnerships. Survey officials said two of the biggest determinants of a city’s cost of doing business tended to be business license fees and property taxes.
Research associate Brad Jensen said what caused Tucson to jump so much was a 2007 change in the way taxes are calculated setting an annual tax of $200,000 for the first $10 million in receipts of the first 100 employees and doing away the old system that was graduated based on the number of employees. Under the change, small businesses saw their annual taxes jump from $744 to $200,000, Jensen said in an e-mail.
The survey was originally developed to compare costs among 250 cities in California but has been expanded to include 161 cities outside the state.
Laura Shaw, senior vice president of marketing and communications for the economic development agency Tucson Regional Economic Opportunities Inc., said she couldn’t comment specifically on the new study because she hadn’t seen it but said a Forbes study released in March this year ranked Tucson No. 105 out of 200 cities.
Once again, Texas cities came out looking pretty good. Four out of 10 cities are in Texas and four out of 10 are in Oregon of all places.
The press release from the Kosmont-Rose Institute took some pot shots at California.
California cities such as Los Angeles, Oakland, San Francisco, and Santa Monica received “Very High Cost” ratings, and as in past years, Los Angeles County continues to be the location of the Survey’s most expensive jurisdictions with 11 of the 50 most expensive cities being in the County. Communities in western states such as Washington, Colorado, and Nevada consistently provide low cost areas in which to do business.
“California and many of its cities are now grappling with the triple witching hour of property tax losses, sales tax recession, and income tax losses,”said Larry Kosmont, president and CEO of Kosmont Companies and founder of the Survey. “Even well-run cities are having a hard time fending off tax increases, particularly since the financially faltering State wants to take back local redevelopment money and gas tax from their local cities and counties. However California should not raise anymore taxes at a time when businesses are already suffering, unless we want to see the exodus continue of companies leaving the State to other more business friendly locations.”
Since the Survey’s inception, California has consistently been one of the most expensive states in which to operate a business and as a result the state has earned a mixed reputation for its treatment of businesses. Recent trends support these conclusions. State workers’ compensation costs are once again on the rise after some years of stability, and a new one percent increase in the sales tax went into effect for the state of California on April 1, 2009. Further, several California counties and cities have recently increased their local sales tax rates. As a result, the California sales tax ranges from 8.25 percent in counties without add-on sales tax to a hefty 10.75 percent in some cities in Los Angeles County.
Even more challenging to a healthy economy are finances at the State level. With the State bleeding red ink due to a 26.3 billion dollar shortfall, and the overall economy in a downturn, the California legislature will need to carve out a budget deal premised primarily on drastic service cuts. However, many worry that the budget will continue to ignore the unfunded programs that are not sustainable due to ongoing revenue deficits that make voter approved commitments such as Proposition 98 education mandates unachievable. This makes the State’s future appear dim to many business leaders.
“California faces tough choices and spending reforms that are needed to resolve budget deficiencies, sufficient for California to become financially solvent, will not be easy ones to accept,” said Kosmont. “Pension and In Home Supportive Service reforms could save the State billions of dollars, however these and other reforms can be perceived as harsh. Ultimately, the California legislature needs to decide if they want to bring credit stability to a system that the business and financial community views as unmanageable and less creditworthy as each day passes.”
We’ve covered the California – Texas differences (HERE, HERE, HERE, HERE and HERE) on this blog quit a bit. As California continues to raise taxes, regulate industries and put in roadblocks to business, Texas took a right turn in the early 2000’s. Texas did did crazy things like tort reform, reduced regulatory requirements and upgraded their tax system. As California loses business Texas is adding them.
The Wall Street Journal ran an opinion peice today about trial lawyers attempt to push back on tort reform gains. After spending $9 million and introducing 900 bills into this years legislature the lawyers haven’t been too successful.
The best line in the article is:
Speaking of the economy, it’s notable that Texas created more new jobs last year than the other 49 states combined. Texas’s low tax burden is one reason. But also important is a fairer legal environment in which companies are less likely than they were a generation ago to face jackpot justice.
We had Senator Al Melvin on the Wake Up Tucson show this morning. We talked about the unique opportunity Arizona has to become a safe haven for enterprise. California is driving there business away and Texas has been opening doors for the past 10 years. Texas implemented tort reform, a relaxed regulatory environment and favorable tax status for enterprise. It’s working. The jury is out as to if Arizona’s conservatives can get it done and start turning the tide.
Even without our Tucson business communities support, we have leaders up north that are trying to turn the tide. Let’s hope Arizona can but the ‘open for business’ sign up. Read about SALC’s lobbing HERE.
AUSTIN – Gov. Rick Perry joined state Rep. Brandon Creighton and sponsors of House Concurrent Resolution (HCR) 50 in support of states’ rights under the 10th Amendment to the U.S. Constitution.
“I believe that our federal government has become oppressive in its size, its intrusion into the lives of our citizens, and its interference with the affairs of our state,” Gov. Perry said. “That is why I am here today to express my unwavering support for efforts all across our country to reaffirm the states’ rights affirmed by the Tenth Amendment to the U.S. Constitution. I believe that returning to the letter and spirit of the U.S. Constitution and its essential 10th Amendment will free our state from undue regulations, and ultimately strengthen our Union.”
Perry continued: “Millions of Texans are tired of Washington, DC trying to come down here to tell us how to run Texas.”
A number of recent federal proposals are not within the scope of the federal government’s constitutionally designated powers and impede the states’ right to govern themselves. HCR 50 affirms that Texas claims sovereignty under the 10th Amendment over all powers not otherwise granted to the federal government.
It also designates that all compulsory federal legislation that requires states to comply under threat of civil or criminal penalties, or that requires states to pass legislation or lose federal funding, be prohibited or repealed.
Developing… From Druge
A State, just like a City or County can take steps today that will change the course of their future for generations to come. Six years ago the legislators in Texas set the state on a new course of action. A number of factors made a difference, not the least of which were tort reform and a favorable tax environment. Texas is touted as one of the most pro-business climates in the US. Both Arizona and Texas have similarities like a strong university system, major quality of life and climate benefits and a diverse workforce. Texas isn’t saddled by our State Land Trust issues which as you look around Arizona is a big hurdle we have to figure out. With the right leadership in Arizona state government maybe, just maybe we can look back in a few years and see Arizona on top of some of these pro business lists.From Expansion Management
State Continues to Draw Projects
Texas remains at the forefront in attracting expansion and relocation projects primarily because of its pro-business attitude. Another factor is two dozen major universities providing research and development capabilities, as well as training partnerships.
When the high-tech industry took off in Austin, Texas’ capital city, Austin Community College developed a program to train high-tech workers so companies could find a skilled and educated work force, said Patrick Shaughnessy, communications manager for the Texas Department of Economic Development.
That’s why Oracle, the world’s largest provider of database software, recently selected Austin for its high-availability data center.
Oracle looked at all viable options within the United States and short-listed 15 facilities, including ones in Missouri, Colorado, Massachusetts and Arizona, said Oracle spokeswoman Letty Ledbetter.
Oracle’s strategic partnership with Dell Computer, headquartered in Austin, was another major factor in the decision.
Also taking advantage of Austin’s high-tech expertise is PerformanceRetail, which moved its headquarters from Houston in July.
“Austin has a solid record in creating some of the world’s largest and most successful technology companies,” said Gregg Burt, president and CEO of Performance Retail. “This move gives us ready access to the talent we need to continue our leadership position in the development of retail technologies and expand our efforts to better serve our growing client roster of global corporations.”
California’s Bay Area was considered, said Dean Cruse, vice president of marketing.
Location Makes a Difference
The state’s 1,248-mile border with Mexico translates into a large bilingual work force, a contributing factor in Clarke American Checks’ decision to open a second contact center in San Antonio in August.
The new $12 million facility will provide customer service and sales via telephone, e-mail and Web chat for its partners and their customers, which includes more than 4,000 banks, credit unions and other financial institutions nationwide.
With 350 people working at its first facility, Clarke American plans to add another 350 at the new 42,000 square foot facility.
Kaari Swope, Clarke American’svice president and general manager of customer service, said the company considered alternative sites in Kansas, Iowa, Utah and other locations in the Midwest.
“We chose to add a second facility in San Antonio because of the existing infrastructure, the high quality work force available and because of the advantages of being able to hire a bilingual work force,” Swope said.
The state’s other major metropolitan area, Dallas/Fort Worth, recently welcomed two new arrivals.
Safety-Kleen Corp., which helps more than 400,000 companies regulate hazardous and non-hazardous waste, will add 250 employees at its new 120,000 square foot corporate headquarters. In a memo to company employees, company CEO Ronald A. Rittenmeyer said Dallas’ central geographic location, its availability of affordable real estate, and a comparable cost of living were important factors.
Those were the same reasons Washington Mutual, one of the nation’s largest financial services companies, announced in May plans to open a national commercial loan servicing and operations center in the region, bringing 300 new jobs.
“We selected the Dallas area – and Coppell, specifically -because it offers quality real estate options, an abundance of highly skilled workers, and high quality-of-life measures, such as affordability, great schools and access to arts and culture,” said Stuart Miles, senior vice president for Washington Mutual.
Company spokesman Joe Arbona said the company considered Kansas City, Houston and Indianapolis, but felt Dallas offered the best pool of talent to fill the positions.
Dan Perkins is a freelance writer based in St. Louis, Mo.
Some highlights of how Texas ranks;
Texas: The Business Advantage
Texas has established a worldwide reputation for its open, positive attitude toward the business community. With a low tax burden, low living costs, a Texas-friendly lifestyle and government programs designed to help rather than hinder business, the Lone Star State is the perfect location to build your company.
- If Texas were its own country, its economy would rank 12th in the world, just below Brazil and Russia and higher than India, South Korea and Australia.
- The Tax Foundation ranks Texas 43rd among states for its combined 2007 state and local tax burden. That’s a contest in which first place is no prize!
- According to the Missouri Economic Research and Information Center, Texas had the third-lowest cost of living among all U.S. states in the fourth quarter of 2007, and by far the lowest cost of living among the 10 largest states.
- The Texas Enterprise Fund, created in 2003, gives Texas leaders unique leverage in using incentives to attract jobs and business to the state. The Texas Governor’s Office reports that the fund has brought 51,800 new jobs to the state and generated $15.6 billion in capital investments.
- Since 2005, Texas’ Emerging Technology Fund has been helping early-stage technology companies bring innovative products and services to market.
- Texas has made a substantial and ongoing commitment to upgrading the skills of its workers. The Texas Skills Development Fund, which provides state funding for employee training, awarded $25 million in grants in 2007 that generated nearly 7,100 new jobs and provided training to 13,758 workers in existing jobs.
- Texas emerged as the clear winner in Fortune magazine’s 2007 ranking of the nation’s 100 fastest-growing companies, with 32. California was a distant second, with 11 companies.
- In Chief Executive magazine’s annual nationwide poll of chief executive officers, Texas has been chosen as the best state in which to do business for four consecutive years (2005-2008).
The CNBC financial news network ranked Texas as America’s Top State for Business in 2008 and best all-around economy in the United States.
By Mella McEwen
Amid the economic turmoil roiling the country and spreading across the globe, the state of Texas is an island of economic calm, according to Texas House Speaker Tom Craddick….
The state also is an island “created six years ago when we consolidated agencies and cut spending and made the government work like every other business,”Craddick added. “We had people who made the hard decisions and did what needed to be done.”
The Midlander told his audience that “We have $12 billion in our rainy day fund and $5 billion to $6 billion surplus funds in our general revenue” as the Texas Legislature prepares to meet in January.“If you’ve been following what’s going on, California is facing a $19 billion budget deficit and has asked the federal government for a loan,” he said. “When I was elected speaker, we were facing a $5 billion deficit. When
I was sworn in, it was a $10 billion deficit. We didn’t ask the federal government for a loan, we formed a new appropriations committee and cut spending.” He cited as an example the Health and Human Services, where 13 agencies were combined into three, saving approximately $1.5 billion a year.
Tort reform passing at the same time also helped, he said, stressing that legislation was not passed just to benefit doctors, though it has attracted 11,000 new doctors to the state in the last four years.
“Everyone across the board has benefited from tort reform,” he said. “We got rid of most frivolous lawsuits” and companies looking to move to Texas have told him one reason is tort reform…
He predicted education funding will be a major focus of the session, telling the audience that “In my opinion, we’ve got to find another way to fund education and move away from property taxes.”
He also wants to update the school formula he said dates back to the 1960s and make sure good teachers are rewarded for their efforts.
Transportation will be another focus, Craddick said, noting that the Transportation Commission recently announced it cannot locate $1 billion in funds.“We’re sending in an audit committee and we will find that $1 billion,” he said. “You won’t recognize TxDOTwhen we get through. Here, about 1 percent of you are concerned about transportation. In Dallas, 99 percent are concerned about transportation. The gasoline tax is not raising enough to keep up with our infrastructure. We need to look at options on funding transportation.”
Health care will be another issue, he said, saying he wants to find ways to let small companies band together in larger groups so they can find healthcare insurance that offers better coverage at better rates.
Mella McEwen can be reached at email@example.com.
“Austin offered a lower cost of living, a great lifestyle, inexpensive services and access to a large, talented pool of technology professionals,” Cruse said.
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