BUSINESS CLIMATE COMMITTEE MAKES RECOMMENDATIONS

May 30, 2002 (State Capitol, Phoenix) -€“ Drawing on recommendations provided by business and civic leaders from communities throughout the state, the House Ad-hoc Committee on Arizona’s Business Climate, chaired by Representative Barbara Leff (R-Paradise Valley) has issued its Final Report, concluding that the state must develop policies that ensure all of Arizona’s businesses have the opportunity to grow and prosper.

In an unprecedented effort to solicit the business community’s perspective on state policy, the Committee held town hall meetings in nine communities across Arizona. Local business owners, civic leaders, and members of the public participated in open discussions aimed at finding ways to promote economic development by improving the state’s business climate.

Among its recommendations, the Committee concluded that Arizona must:

• Maintain a stable state and local tax structure

• Avoid an oppressive regulatory climate

• Eliminate duplicative paper work at the state and local level

• Encourage access to affordable and quality healthcare

• Sustain recent investments in education and recognize that education is the key factor in ensuring future success for individuals in the state as well as for the state economy

• Direct education funding to the classroom rather than administration

• Attract research and development operations and federal research opportunities

• Establish an infrastructure that generates ‘deal flow’ to lure venture capitalists

• Recognize the importance of tourism to the state economy

• Recognize that taxes and regulations disproportionately burden small businesses

• Avoid new taxes

Committee Chairman Barbara Leff hopes the Legislature will heed the Committee'€™s recommendations. "€œWe have heard from hundreds of business people who have shared their perspectives and ideas. Because of this committee'€™s work, the Legislature can now make better-informed decisions regarding the impact of their policies on businesses throughout the state."€

Although there are many important factors that contribute to a healthy business climate, stability was seen as the most significant issue. Because business plans are based on long-term projections, changing policies haphazardly is detrimental to economic development. The Committee concluded that the Legislature must be very cautious about the message it sends to business when discussing repealing tax credits, destabilizing the unemployment tax fund, increasing business€™ exposure to lawsuits, or undermining Arizona'€™s right-to-work laws.

The Committee also concluded that Arizona is a young state whose leaders have a unique opportunity to shape its economic destiny. Arizona'€™s future continues to look bright.