Tucson needs stimulus, but what?

By Jack Camper, President/CEO
Tucson Metropolitan Chamber of Commerce
jcamper(at)tucsonchamber.org

There is no doubt that the national economic downturn has gripped the Tucson region. Employment is down, wages are down, construction has stalled and consumers are not consuming with the vigor of past months. And as the economy struggles, municipal governments are finding their revenues down and the presiding bodies are making tough decisions, just like us in the private sector.

They need to cut expenses, but what to do to make the least impact on services? Freeze hiring? Cut benefits? Furloughs? Four-day work weeks? There has been a laundry list of measures discussed in municipalities around our state and nation.

The other aspect is to try to generate revenue. Cities and counties, however, many times are hamstrung because they have limited authority to generate many revenue streams. There are sales taxes, of course, property taxes and development impact fees. Then there are state-shared revenues. That last option, however, is constrained because of the recession – there are fewer state revenues to share, and the sharing is done on a proportional basis according to incorporated population by county.

While the options  are limited, it doesn’t mean cities and counties can do nothing. Rather than waiting to be “bailed out” by federal or state actions, it might be a good time to be proactive locally and come up with a stimulus program that is customized for this region.

Notice I say region. Not just a single city or the county, but every entity that has tools to spur growth can and should work together.

The Tucson City Council was recently confronted with a proposal to waive development impact fees for one year, a proposal intended to jump-start job creation in the city. However, this one idea generated a committee to be formed, with the charge of coming up with a stimulus concept for the economy and bring forth the proposals at a study session in two weeks.

We are interested in what comes out of that committee, and the rest of the region will be watching as to what gets implemented and how. While the city limits house nearly half of the region’s population, all communities are linked, and thus any stimulus should affect as many people as possible. Whether everyone cuts impact fees, shaves their property tax rates, drops a garbage fee or reduce the sales taxes, we encourage every effort to put more money in people’s pockets and give incentives to spend money and incentives for companies to create jobs. We’re hopeful that the other entities in the region will look to Tucson and will consider piggy-back similar proposals for the sake of all 1.1 million people in the greater Tucson area.

It’s clear that our economy needs some help. We need people back to work, we need consumers to return to consuming. Right now, though, with so much “doom and gloom” being reported in the media, the consumer psychology is psyched out – resulting in savings, cutting spending and even pulling assets out of the stock market. Residents in our region need incentives to get out in the economy again. While the federal and state governments have many more tools in their toolboxes to spur economic growth, cities and counties lack some of those tools.

This requires some patience, creativity, cooperation and leadership from our local elected officials to make the most of the tools available.

We at the Tucson Metropolitan Chamber of Commerce are hopeful that all entities will work together to stimulate the economy in an immediate but targeted way. Most importantly, we’re looking closely to see if Tucson will provide some leadership on this issue and move our economy forward. Someone needs to be first; who says the state or federal governments have to set the pace?

Tucson is taking the lead, and we wish to recognize the effort. But to only have one entity pursue this stimulus will have only a limited effect. This is a perfect time for more of the cooperation and creativity that led to the transportation plan.

The economic engine needs jumper cables. We have the power to recharge.