Arizona - Economic policy



The Department of Commerce has primary responsibility for attracting business and industry to Arizona, aiding existing business and industry, and assisting companies engaged in international trade. Its programs emphasize job opportunities, energy conservation, support of small businesses, and development of the film industry. The Commerce and Economic Development Commission (CEDC), a six-member agency chaired by the Director of the Department of Commerce, was established in 1989 as the state economic policy and planning board. Its budget is provided by two scratch games in the Arizona lottery, which amounted to about $4.5 million for FY2002 and the first three quarters of FY 2003. Of these limited funds, 43% went to a study and marketing campaign on increasing Arizona's economic diversity; 33% to support federal loan guarantees for the troubled America West airline; 21% to local development projects, including those encouraging tourism, as matching funds for federal grants; and 3% to a job training program in advanced technology. Other economic development programs supported at least in part by the state in 2003 included the Arizona Enterprise Zone (EZ) Program, which offers tax reductions and exemptions for investment in areas where poverty and/or unemployment are high; the Military Reuse Zone (MRZ) program, established 1992, which offers incentives for investments to retool military installations for civilian use (the first MRZ was Williams Air force Base which became Williams Gateway Airport, and the latest, the US Naval Air Facility in Goodyear which became the Phoenix/Goodyear Airport in December 2002); the Tucson Empowerment Zone Tax Incentive Plan, a $17 billion tax incentive program designed after Tucson won designation by the federal government as an empowerment zone; the Arizona Job Training Program, which designs job training programs; the Economic Strengths Program (ESP), which provides grants for road construction; the Waste Reduction Assistance (WRA), which, in 2003, had $700,000 to support waste reduction programs; the Waste Reduction Initiative Through Education (WRITE), which, in 2003, had $250,000 to support education programs on waste reduction; the Private Activity Bonds (PAB) Program, which replaced in 1986, the Industrial Development Bond Program, and which offers finance in favorable terms for the construction of industrial and manufacturing facilities, student loans, housing, private utility projects and some municipal project; the Lease Excise Tax Program, which offers tax abatements to businesses that lease, rather than own, city property; and the IT Training Tax Credit, which was offered in 2002 for training up to 20 employees in information technology (IT) skills. As of 2003, the state had also designated seven Foreign Trade Zones (FTZs) that were accorded treatment as territory outside of the state's tax jurisdiction. Other tax incentives offered by Arizona include a 10% Pollution Control Tax credit on real and personal property used to control pollution; a schedule of tax credits for research and development expenditures; and accelerated depreciation for capital investments.



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