High-end jobs key to Arizona economy

Arizona must ramp up education, overhaul its tax system and better tend to its environment so the Valley can evolve from a low-paying job hub to a hot spot for high-end firms.

Phoenix area needs smart growth, leaders say

Catherine Burrough and Glen Creno
The Arizona Republic

Phoenix can’t count only on affordable housing and sunny weather to carry its economy into the next decade.

The message was delivered to hundreds of the city’s business heavyweights Friday at the Arizona Biltmore at a session titled "Metro Phoenix in 2012: Vibrant Economy or Also Ran?"

"This doesn’t mean shut down growth," said Grady Gammage Jr., a real estate attorney and Arizona growth historian. "We keep doing what has worked so well, but make it more interesting and cool so we bring people here for other reasons."

The Valley’s population has continued to climb in the past few years as people have been enticed by some of the lowest housing costs in the West. But job growth has plummeted, shaking the Valley’s economic position.

"That is a real serious problem," said Rick Weddle, chief executive of the Greater Phoenix Economic Council.

Also, many of the jobs created during the last decade offer below-average pay. Phoenix’s unemployment rate hit 5.6 percent this summer, up from 2.7 percent at the end of the ’90s. About 71 percent of the jobs created in the Valley during the ’90s pay below the mean for the area, Weddle said.

Arizona’s rock-bottom ranking in education polls has been a deterrent for some firms considering a move to the Valley, particularly companies in need of a large pool of well-schooled workers.

Gov. Janet Napolitano told the crowd that education is her top priority and got a loud ovation when she said she won’t sign legislation that cuts funding for schools. She said the state has "starved" education too long by underfunding schools and the results show in poorly performing students.

Friday’s session wasn’t the first time these warnings have been sounded. In late 2001, as the Valley’s economy began to tumble, several of the area’s top executives formed the Greater Phoenix Business Leadership Coalition to tackle the problems. The group has met several times, and GPEC has adopted a new cluster strategy to attract more high-paying jobs.

The commercial real estate industry has been pushing for change in property taxes, saying the levies deter economic development and investment. Gammage held up a ranking showing Arizona is the sixth-priciest state for commercial property taxes in the country, but ranks low at No. 31 for residential property taxes.

Kevin McCarthy of the Arizona Tax Research Association said that higher commercial property taxes are a big impediment for attracting firms. Two commissions are working on recommendations to update the state’s fiscal policy.

http://www.azcentral.com/arizonarepublic/business/articles/0913phoenixforecast13.html