PHOENIX - Mohave County Reps. Doris Goodale and Nancy McLain are backing a new economic recovery bill announced by Arizona Speaker of the House Kirk Adams Jan. 5.
The bill is based off of an economic study commissioned by the Arizona House of Representatives. A copy of the bill is not yet available on the House Web site, but it will be introduced to the Legislature this week.
"It has all of the good things the economy needs," McLain said.
McLain said the state needs to increase its number of base industries - businesses that export their product. That keeps new money flowing into the state, whereas most retail trade keeps money circulating from employer to employee to business within the state.
The bill contains the Arizona Quality Jobs and Arizona Job Training programs. The Arizona Job Training Program was suspended in 2009 due to budget constraints and would be reinstated under the new bill. Funding for the program will come from tax withholding collected from employees by the state. It would repeal the current Job Training Tax paid by companies.
"In order to attract strong base companies, the job training program is extremely important to the success of this bill," Goodale said. "The training program will be enhanced, more robust and responsive to new and existing base industry companies in Arizona."
The Arizona Quality Jobs program, Adams said, would provide cash rebates to companies that create high-wage jobs in Arizona. The rebates would be paid for by sending back 50 percent of each new employee's income tax withholding collected by the state to the company that hired them.
In order to qualify for the rebates, a company must have a payroll greater than $2 million for at least five years and must meet wage and healthcare requirements. If a company fails to meet the requirements at any time, it will forfeit any current rebates and have to pay back to the state any rebates it received in the past.
A new Arizona Deal Closing Fund would use federal stimulus dollars and a percentage of withholding taxes from newly created jobs to provide incentive funds to lure new business to the state.
The bill would also slowly reduce the corporate income tax from nearly 7 percent to 4.5 percent over four years starting in 2012; reduce the assessment ratio on businesses' property taxes from 20 percent to 15 percent over five years starting in 2012; reduce individual income taxes and eliminate the state equalization tax, which provides a means of funding K-12 education.
The assessment ratio is how much of a percentage of the full cash value of a property is used to calculate property taxes for a parcel of land. Businesses in Arizona not only pay property and income taxes but also pay taxes on equipment, buildings and other materials.
This wouldn't be a drain on state coffers, because it targets new jobs, jobs that wouldn't be there without the tax rebate incentives, McLain said. And the state needs more jobs.
It will also modify and expand the Arizona Enterprise Zone program, which encourages businesses to move into depressed or blighted areas. The property assessment ratio for businesses moving into an enterprise zone would be set at 5 percent. A business would also receive a tax break for each new job it created in an enterprise zone.
"Challenging economic times require new and bold ideas, swift decision-making and rapid, yet strategic, implementation," Adams said. "This is our first step in growing the Arizona economy and creating good, well-paying jobs for Arizona citizens. Without strategic policy action, we risk further decay of our economy and standard of living compared to the U.S. as a whole," he said.
"I hope it's successful," McLain said.
As part of the new Legislative session starting on Monday, the House Republicans have launched a new Web site, "Grow your opportunities, Grow Arizona." The Web site also contains some details of the economic study and the new economic bill. It can be found at www.azhouserepublicans.com.