Mike Varney

 

 

We enter a new year here in Southern Arizona with some good news and some lingering issues left over from 2017.  It is my belief that the following topics will in some way influence the future of our local economy and, by extension, our community.

 

Pima County victorious in state court

In mid-December, a three-judge panel unanimously sided with Pima County regarding its construction project to serve as the new home for World View.  A far-right think tank in Phoenix took exception to Pima County’s attempt to keep a space age employer in Tucson and sought to kill the public-private partnership on the grounds that the County had not engaged in a competitive bid process.  

Pima County argued successfully that it followed state law regarding the use of public money in this special opportunity to develop the local economy.  

The judicial panel wrote, “To require competitive bidding in such a circumstance would only frustrate that purpose by driving up the price and thereby nullifying the very power the statute grants: the power to spend monies for economic development.”

Here is what you need to know:  Public-private partnerships (three-Ps) of the sort engaged in by Pima County and World View are the norm across the country.  Three-Ps are the way communities are cooperating to keep employers in their community and the way they are making it attractive for companies to move to their communities.  Hopefully, we will see even more success stories of this nature as our region competes for jobs and economic vitality in 2018 and beyond.

 

optimism surges

According to a recent Bank of America survey of small businesses across the country, there is serious reason for optimism.

71 percent of small businesses are confident that year-end revenue in 2017 will outpace 2016.

Small businesses anticipate their local economy, the national economy and the global economy will all improve.

Here’s a surprise.  The millennial generation is the most confident of all generations (Gen-X, Boomers and Seniors) that company revenue will increase in the next 12 months and that hiring will increase.

Here is what you need to know: Survey results from outreach done by the Tucson Metro Chamber echoes these national sentiments.  Local business executives are more positive about the future of our local economy than ever in the past six years.  Federal legislation that reduced tax burdens on businesses passed just before Christmas, and will only add fuel to the forward momentum.  We look for 2018 to be a great year for job creators in Pima County.

 

The big “If”

Let there be no mistake or misunderstanding about it: improving Arizona’s education outcomes is the X-factor for the continued growth and health of Arizona’s economy.  Funding for education should be the major topic of conversation during the 2018 state legislative session.  It is time to face facts, folks.  K-16 education cannot continue to put out a competitive and talented workforce when it is running on fumes.  Tucson Metro Chamber surveys indicate that business would accept new forms of revenue enhancement if doing so led to a bigger pool of qualified talent.  The legislature will have to get over the “balanced budget” mantra that they wear on their sleeves to deflect critical state needs (such as funding for education) and find a way to recognize this real and growing problem.

Here is what you need to know:  Decent funding for education and a balanced budget can co-exist.  Gov. Ducey has made it clear that economic expansion is his number one state priority.  We like that. 

What we don’t understand is the legislature’s unwillingness to see the obvious: state businesses don’t run on auto-pilot.  They run on talent.  Local companies are going to great lengths and spending their precious resources in search of talent when we could do a much better job of growing our own talent.  2018 is an ideal time for the state and educators to create a “grand bargain” that ups teacher pay and raises money for capital needs in exchange for better classroom outcomes.  In other words, let’s give the schools what they need in exchange for a plan to create a richer pool of Arizona talent.

Mike Varney is the president and CEO of the Tucson Metro Chamber.