RURAL DISCONNECT
Talk topic: Phoenix booming, while rural areas deteriorate; bill aims to attract investors with tax incentives
On the surface Arizona appears to be booming. But, according to the Greater Yuma Economic Development Corp, the reality is that Maricopa County is booming and the rest of Arizona, including Yuma County, is struggling as the Greater Phoenix area gets the majority of infrastructure, education and shared tax revenues.
This inequity will be addressed during the GYEDC Quarterly Investor Luncheon on Feb. 11, which for the first time will be open to the general public. It will take place from 11:30 a.m. to 1 p.m. at the Hilton Garden Inn Pivot Point Conference Center, 310 S. Madison Ave.
Trevor Stokes of Regional Analysis Partners, and formerly the workforce programs manager for the Governor’s Office of Economic Opportunity, will share “where we were, where we are and where we need to go from here.”
Investor tickets are $30 and available until Feb. 4. General admission tickets are $40 plus a $3.19 fee and available until the day of the luncheon. Tickets can be purchased at Eventbrite.com. For more information, call Greater Yuma EDC at 928-782-7774.
“DETERIORATION OF RURAL ARIZONA”
In a Jan. 15 letter, Julie Engel, president and CEO of GYEDC, stated that “GYEDC is taking the lead in addressing the silent
but deadly deterioration of Rural Arizona.” She noted that “one area of the state is cannibalizing the remaining areas … We are being told Arizona is leading the nation in many economic metrics, but when you breakdown the reports they tell a very different story.”
According to a report from the 2018 Arizona Office of Economic Opportunity cited in Engel’s letter, Greater Phoenix metro’s gross domestic product per capita, which is a common indicator used to track economic health, was $44,534, which is 12.5% higher than the state’s GDP per capita at $39,583.
Notably, GYEDC pointed out, Greater Phoenix is the only region in Arizona that has a GDP per capita above the state average. Flagstaff has the second highest GDP per capita in the state at $35,636, which is still 10% below the state average.
The story is similar when exploring Real GDP (inflation-adjusted), as Greater Phoenix accounts for about 70.2% of Arizona’s total Real GDP. Tucson is ranked No. 2 at 11.3%.
Engel noted that by 2021 Greater Phoenix is projected to account for 84.7% of all new job growth in the state. This means that if 165,691 jobs were created in Arizona, 140,347 of those jobs would be within the Phoenix metro area.
“Greater Phoenix is the only region in Arizona that is expected to see its share of the state’s job total increase by 2021,” she said. “As a result of this enormous gap, much of our infrastructure, education and shared tax revenues are funneling into the Greater Phoenix metro.”
PROPOSED JOBS BILL
In response to this “abysmal inequity,” GYEDC has created a bill designed to attract investment in rural areas by offering tax incentives. The bill was created under the guidance of Yuma County Assessor Joe Wehrle and Paul Melcher, the county’s economic development director, and GYEDC anticipates that Rep. Tim Dunn will introduce the bill this legislative session.
GYEDC hopes that the tax incentives will move investors looking at only Phoenix for their projects to explore rural areas. Investors who bring projects to the outlying areas would have a lower property tax classification that would remain in place for 10 years or until they get all of their money back for constructing infrastructure such as roads or sewers, whatever happens first.
Greg LaVann, GYEDC senior vice president, hopes this bill will give investors an opportunity to at least think about Yuma before considering Phoenix as the only option for them. “The last three projects we’ve done have been over $15 million each, all three projects chose Phoenix in the onset,” LaVann explained during Wednesday’s Chamber Chatter radio show. “We had to go up there, up to the capital, and pull them from the fire and explain to them why Yuma makes a lot more sense than Phoenix does. So the first challenge for all of us, is getting people to know where Yuma is at (and) giving us a chance.”
The bill is meant to help the 14 counties outside of Maricopa, and not just Yuma. “The way we crafted the bill, there’s a lot of autonomy for each region and each jurisdiction to determine what is an impactful project for them. So we did not layer a lot of guidelines,’ Engel said. “We have put the onus on the jurisdiction to say this is what’s going to turn our economy around and this is the kind of project we welcome and will benefit and will also then receive the incentive.”
GYEDC collaborated with the Arizona Commerce Authority in crafting the bill and hopes it has Gov. Doug Ducey’s support. The agency is also asking the community to support the bill and help educate local and state elected leaders of the disconnect from the Phoenix metro area.