House Republicans push bill to help businesses
Republican leaders in the Arizona House of Representatives plan to introduce a bill this week to expand and attract businesses.
They have not yet filed the Arizona Economic and Job Recovery bill to make it public. They released a report Tuesday that outlines the reasoning behind the bill, as well as a fact sheet about general components of the bill.
"This strategic bill will lead Arizona citizens and businesses to growth and prosperity," House Majority Whip Andy Tobin said. "It will allow for a more business-friendly environment that will attract new business to the state and bring strong, solid job opportunities for Arizonans."
Some of the job creation incentives in the bill would take effect immediately, but the tax cuts wouldn't take effect until 2012 and they would occur gradually over a four-year period, Tobin explained.
Fellow Legislative District 1 Rep. Lucy Mason expressed support for the bill, saying it provides future certainty to corporations considering moving here.
Senate Majority Whip Steve Pierce, R-Prescott, said the plan is a good long-range planning product, although he isn't sure how it would help immediate budget concerns.
The pre-2012 incentives wouldn't cut state revenues because the state would pay for them with a portion of new withholding tax revenues that come from new jobs, Tobin said.
The tax cuts would drop tax revenues by about $150 million in 2012, he said.
The fiscal impact analysis of the bill does not include potential new revenues from new jobs, because the House leaders didn't want to make any assumptions about how many jobs it would generate, Tobin said.
The general components of the bill that would start right away include:
Create the Arizona Quality Jobs Program that would use new withholding tax revenues to provide cash rebates to base industry companies that create good, high-paying jobs. The fact sheet cites similar successful programs in Arkansas, Kansas, Louisiana, Missouri and Oklahoma.
Re-instate the Arizona Job Training Program and repeal the existing job training payroll tax that brings in $15 million per year. New withholding taxes would help cover the costs of training new employees.
Create the Arizona Deal Closing Fund with federal stimulus money and new withholding tax money to provide incentives to attract new base industries.
The report defines base industries as those that export their products out of a region, and result in the importation of money into that region.
Modify the existing Arizona Enterprise Zone Program so base industries are eligible for its reduced property tax rates and job tax credits.
Consider commissioning a State Economic Development Strategy and paying for an effective agency. Tobin said the existing Arizona Department of Commerce could be that agency, but it needs more private-sector involvement.
Tax cuts in the bill that would gradually occur in 2012-2016 include:
Reduce the corporate income tax from 6.968 percent to 4.5 percent.
Reduce business property tax class assessment ratios from 20 percent to 15 percent. It's already being reduced from 25 percent to 20 percent.
Permanently repeal the state equalization tax, which the state already has suspended.
Reduce the individual income tax rate by an unspecified amount. Most small business owners pay this rate.
Tobin said the latter tax rate reduction is unspecified because House Republican leaders still want to hear from the public about their proposal.
People can go online to www.azhouserepublicans.com to read the report that spawned the bill's details.
The House Republicans commissioned an economic consultant company called Elliott D. Pollack & Co. of Scottsdale to write the report so it wouldn't be influenced by politics, Tobin said.