Arizona

ARIZONA

 

Evolution or Change in Arizona Policy System(s)?

 

Arizona is not California. Osborne gently, for no specific reason, considers it “southern” in its approach to politics and political culture. Having spent some time there, I would not argue with him, but am sensitive to the demographic—and generational–change that followed publication of his book. Arizona is certainly a western state as well; it has followed a western chronology and Arizona was an important state in the so-called rise of the Sunbelt and has shared in its key themes such as the importance of the federal government, war production, industrial decentralization, Fortress ED strategy, and internal migration patterns unleashed by all of the above. A beneficiary or victim of simultaneous suburbanization, it sprawled and has since defined its environmentalism in terms of sprawl and the need for water to permit sustained growth. The huge inflow of Transition Era immigration from “south of the border, down Mexico-way” has transformed its demographic base every bit as much as the huge internal migration inflows. Even in Arizona that is a lot of water over the dam. However much Arizona has changed over the years, the nature and extent of such change in its state policy system has been arguably a principal focus in its commentary.

 

The first policy system, constructed during its nineteenth century territorial years, was modified to accommodate approval as a state in 1912—by progressive reformers who. off and on, continued the reformist bent into the Twenties (Hunt). The progressive state constitution that sketched out this policy system, shockingly, however, modified since then, still serves as a brace to support a structural system that persists to today. That constitutional structural brace and a persistent cultural legacy that has defied time—despite subsequent immigration and internal migration and considerable economic transformation.

 

David Berman, one of America’s premier scholars of American state government, pursued a lesser-known career as Arizona’s most astute student of its politics and government. Continuity is primary for Berman:

the state’s political history [through the turn of the 21^st century—our Transition Era] can be understood as a simultaneous quest for (1) autonomy for governments, for governmental institutions, business, and individuals; (2) democracy, that is opening up the political process to more people … and securing honest and accountable government; and (3) economic development, that is developing the state’s natural resources and building the state in terms of business, investment, jobs and people. These interrelated drives have their roots in the frontier culture of the early settlers.[i]

Berman believes three distinct policy systems evolved in Arizona: (1) a “progressive” reformist policy system that while short-lived succeeded in writing the state constitution and leading Arizona into statehood; (2) a solid, one-party southern traditionalist (aka a Daniel Elazar) Democratic and closed policy system that (3) shifted after a twenty year transition into the present-day “modern” two-party competitive, more open system due to population migrations and economic growth (p. 22).

 

Our take on Arizona’s ED is heavily influenced by my sense that state government has not appreciably changed its core policy system since  Gov. Bruce Babbitt, and at heart remained largely faithful to a core policy system that evolved from a post-1960 to 1987 transition from the state’s second one-party policy system. That means the Contemporary Era policy system began in mid-1960 and has persisted to the present time. Berman’s structural and cultural continuity through these policy systems, if nothing else demonstrates the validity of Jurassic Park’s Dr. Ian Malcomb’s observation that nature, our culture, “finds a way” to endure.

 

The Democrat/progressive reform policy system, the state’s first, lasted until the Depression, but was in noticeable decline through the Twenties—in effect its golden years were less than a decade. The state constitutional convention was overwhelmingly dominated by progressive Democrats in alliance with miner’s unions.(p.32). The convention borrowed from Oregon and Oklahoma progressive constitutions. The convention, opposing the wishes of President Taft whose presidential signature was a precondition for statehood approval, approved initiative, referendum and controversially, judicial recall, flexible amendment process, imposed a primary system for choosing political party leaders (weakening parties and creating a candidate-centered policy process that oftentimes rendered the party label useless in determining voting behavior). Each House district elects two representatives (multi-member district is only found in Washington, North Dakota, Idaho and New Jersey’s lower house at time of writing). There was, and is today—no lieutenant governor. The Secretary of State is second in line.

 

Administratively, the constitution set up a bureaucratic structural system that included a long ballot fragmenting the executive function into fourteen independently elected officials, two year election terms, embraced progressive home rule (and prohibited special municipal legislation) empowering cities to develop more autonomously from state control (facilitating a subsequent decentralization in Arizona’s state ED/CD policy system). The miner unions did not get all of what they wanted but the constitution included several anti-railroad provisions, an eight hour state workday,  worker liability reforms, established a “corporation commission” to regulate business “for the public good”, and importantly to economic development, established a simple but powerfully restrictive gift and loans clause (Article 9, Section 7) that forbade the state, county, city, town, municipality or subdivision to “give or loan its credit in the aid of, or make any donation or grant, by subsidy to any individual, association or corporation, or become a subscriber to, a shareholder in any company or corporation or become a joint owner …”[ii]. That simplicity has played out unevenly over the years as different state Supreme Court decisions have interpreted it narrowly or loosely. On the whole the gift and loan clause has been bypassed when it stood in the way of a major deal, for example in 2016 a major Tucson EDO, the Rio Nuevo Multipurpose Facility, was exempted by the state Attorney General because, illogically, it was a “tax-levying public improvement district” so that it could enter into a complex deal to land a major Caterpillar facility[iii].

 

The original constitution does not survive intact, over 120 constitutional amendments have since been approved (most from the legislature and mostly technical adjustments—Arizona did not follow California’s plebiscite path), but Berman in 1998 reported that three-quarters of the constitution are unaltered, but fifty percent words added. One such amendment, of course, is the 1946 state right-to-work legislation. George W. P. Hunt, the seven term reformist governor, dominated Arizona state politics, relying chiefly on a closed party primary and an extensive use of patronage to build a machine of sorts. Despite this there was effective competition from Republicans and Hunt was out of office almost as much as in office. His progressive policies, especially in social services, increasingly cost him support as taxes increased, and unions became more unpopular. Hunt opposed the Colorado River Compact, the federally negotiated agreement that opened up irrigation by use of the Columbia River. Hunt believed, with some justification that California was “stealing” the water—and held instead that Arizona had sole rights over water that flowed within its state. That opposition kept him in power during the 1920’s.

 

The reformist state policy system gave way during the Depression to a second system, described by Berman as “one-party conservatism”. The change was fueled principally by increased and consistent migration from southern states after WWI. The Republican Party almost disappeared from political life—unable to elect even one state senator from 1933 to 1951—and a high of eleven in the seventy-two member House. Democrats enjoyed exclusive occupancy of the governor’s office until the 1950’s. Despite, or more logically because of, its monopoly of political power, Democrats lost coherence and the legislature and governorship confronted factional and opportunistic membership that, if anything, tended to gridlock, and inviting a counter effort by legislative leaders to develop powers to overcome paralysis. Governors fought their own party members. In the ensuing decades long factional struggle, the dominant agglomerations (copper, cattle, and cotton—the 3 C’s) of the Arizona economy, through an extensive and intensive use of lobbyists using “beefsteaks, blonds, and booze—the 3 B’s, took over what passed for state-level economic development policy. In this period, however, sub-state economic development, revolving around attraction, infrastructure and tourism—and in the postwar annexation, flourished.

 

The mining companies and their allies in rural areas—the large farmers and ranchers—were interested in keeping state expenses down, thus avoiding taxation on their properties. They looked with suspicion on water projects and other public works intended to bring new industries and more people into the state because this would disrupt the status quo.[iv]

This factionalized and fragmented policy system, lacking a formal state-level lead EDO and a empowered executive, utilized a number of specialized hybrid public-private “commissions or authorities”, particularly in infrastructure and water. The latter encountered serious opposition from the state’s “3C” agglomerations who considered water as a protected property right, making water regulation and redistribution a third rail of Arizona politics. Regarding water, the second policy system lived off the successful first policy system’s use of federal investment (Roosevelt Dam, 1925 Mormon Flat Dam, the 1927 Horse Mesa Dam and the 1930 Stewart Mountain Dam). Despite leadership from its Congressional delegation (Carl Hayden) Arizona, unlike many western states, did not in this period effectively employ federal funds for water projects—with enormous implications for water table levels. As a general rule, agglomeration-based sectors were deeply involved in state ED policy-making.

 

State government as shall be described has not been the powerhouse of Arizona ED. That honor goes to municipalities, both city and suburb. Given the enormous flexibility Arizona constitutional home rule afforded to local governments, a b-modal state ED policy system evolved for nearly a half-century—with the state at best a lackadaisical barrier to mainstream and community economic development. To the extent the state pursued economic development, it favored rural ED, and for reasons other than attraction and recruitment, created a business climate favorable to local attraction efforts. The 1946 right to work law was advocated aggressively by the mining corporations for their own benefit, and took advantage of an anti-union political culture—and an increasingly radicalized postwar Republican Party. Thus until the 1960’s the Arizona ED story, the evolution of Arizona CD and Mainstream ED is mostly a sub-state tale. The New Deal and the Age of Urban Renewal was a local affair, Phoenix and Tucson (housing authorities) for example were the chief players in the Depression Era federal ED programs—and Phoenix was the principle advocates for war production and industrial decentralization largesse.

 

All this began to change during and after World War II. More than a million military were trained in Arizona, the southern diaspora flooded thru, and into, Arizona, factories were relocated, an aerospace and electronics industry founded, and airports and highways built. Between 1940 and 1952 Republican enrollment increased from 12% of party registration to 25%–the increase was an urban affair, chiefly Phoenix and Maricopa County. Phoenix newspapers, with a near-monopoly, led the not-so-loyal opposition to the second Arizona policy system. Part of the reason was a shift in population migration, away from the South and from the small town Midwest. The conservative state Democrats were increasingly out of step with their national party and Washington. A liberal, generational wing of the Democrat Party slowly emerged (especially in Tucson).

 

The second party system endured chiefly thanks to malapportionment (especially in the Senate which became the bastion of the last years of the second policy system) that favored rural areas and penalized major urban centers. After WWII the “3C’s” suffered from diluted impact and reduced employment as the American/Arizona economy shifted to auto and defense industrialization, service sectors and technology. Truth be told, tourism was the chief challenge to the “3C’s” and Arizona’s public utilities alliance shifted to support local ED attraction/ promotion—urban growth—both had a dramatic positive effect on mainstream sub-state ED. In the 1950’s Republicans finally captured the governorship (John Howard Pyle in 1951 and recaptured it with Paul Fannin in 1958) and noticeable success in Congress/Senate. Republicans increased their power state legislature, amassing a sufficient number of votes to affect legislative policy—oftentimes allying with conservative Democrats. Still by the early 1960’s the second policy system was in clear decline, waiting for the proverbial shoe to drop.

 

The “Old” ED Policy System Evolves into a Third Policy System

It seems to be that the rise of the Sunbelt can best be seen through the prism of sub-state jurisdictions, economic bases, and changing political cultures. The state was not so much the chief player in the dramatic transformations that prompted regional change. This is certainly true for Arizona. Apart from the normal ups and downs of the American economy Arizona has always been a “politics of growth”—felt first by those closest to the economic bases transformation. Sunbelt municipal economic base growth took off during WWII war production and postwar federal industrial decentralization. The aerospace and defense gazelles, the semiconductor and electronics industries found in California also moved into Arizona—as did military bases and facilities. Firms came to Arizona not because they were recruited, as many feel the South did. They came for their own reasons or because they were compelled to by the federal government. Relocation of the more dynamic sectors of the American postwar economy greatly affected the culture and policy direction of Arizona’s corporate leadership and the politics, program areas, and policies they advocated. New firms were not extraction and agricultural firms associated with the old policy system. The electronic industry, Motorola an outstanding advocate for change and Arizona’s “integration” into an advanced economy, impacted greatly Arizona local and then state ED.

 

Despite the state’s, low cost- less regulation, right-to-work, business climate, the almost non-existent state ED apparatus played little role in luring them or making deals to get them to Arizona. To the extent that occurred it was done by municipal jurisdictions. The state did little to create the dynamic economic bases found in its municipal areas—it mostly reacted to them—and modernized to the extent it did to accommodate their demands. Arizona, in fact, was (and is) known as a “piker” regarding incentives and deal-making. One gets the feeling that Arizona thought much like a cowboy trying to lasso cattle stampeding into his corral—why bother, let them go—they are going where I want them to go? Not surprisingly, EDOs such as the Great Phoenix Leadership, and the various EDOs under its influence, can be thought of as Arizona’s chief economic leaderships. It was left to them to fabricate some solution to the 1988 policy antics of Governor Mecham which brought the Phoenix tourism and convention industry and business attraction to a standstill. Member of this group corralled Governor Babbitt and served as the cutting edge for whatever passed for Arizona’s entrepreneurial state. It was left to the GPL to rescue the universities from a budget crisis induced by stalemate caused by paralysis between a besieged Governor Symington and the legislature. (p.66 Berman)

 

Finally, Arizona’s version of environmentalism, not California’s, certainly not that of Jerry Brown, has been saturated by a scare resource: water—the desperate need to find more to allow growth–not growth management nor sprawl abatement. Arizona’s second policy system shifted from the first system which emphasized state rights versus the federal government, but snapped up whatever federal largesse was available for water/dam/ irrigation infrastructure and encouraging the use of water for the “3C’s” industries..

 

CAP draws water from the Columbia River, a river that flows through six states and Mexico. In 1921, the federal government authorized the states to join together to negotiate an interstate agreement on use of the water and infrastructure planning. A Colorado River Compact was agreed to in 1922. Arizona did not ratify the compact and remained outside thanks to Governor Hunt who saw the compact as thievery by California and preferred instead to unilaterally allow Arizona to harness and use whatever water flowed through the state. He did envision a canal to draw water to arid central valleys of Phoenix and Tucson.

 

Hunt opposed Hoover and FDR’s water infrastructure projects when the latter went ahead with the agreements negotiated within the Colorado River Compact. Arizona responded with law suits and senate filibusters. In 1934 Arizona Governor Mouer declared martial law and stopped construction on a federal Arizona dam (Parker Dam) and associated canals that flowed to California.  Mouer sent the Arizona navy, a steamer that literally fired a symbolic shot into California in opposition to the initiative. The steamer broke down shortly afterwards and had to be towed back to port by a City of Los Angeles tug boat. This example strongly suggests that John McCain is a true Arizonian. It says volumes about the state’s political culture.

 

 

Water, less for irrigation than residential and business use, has been the chief driver of Arizona infrastructure since Carl Hayden (slightly imitating Pat Brown) cut his CAP deal with FDR in the mid-1940. Postwar second policy system priorities increasing supported, at minimum accommodated, sprawl and population and economic growth. The cornerstone water infrastructure is (and has been) the Central Arizona Project (CAP). CAP was intended to transport 1.2 million acre/feet 336 miles from Lake Mead (Colorado River) annually, beginning in Phoenix by 1980 and then to Tucson by 1991.In 1944 the state ratified the Columbia River Compact and negotiated a contract to build the Boulder Canyon Project and to commence studies to plan and design the CAP. It took twenty-one years before the feds would approve the CAP, however (California legislators were opposed). In the interim water depletion due to growth (the state lacked groundwater legislation until 1980, see Babbitt below) became critical. Approval was forthcoming in 1968 (thanks to Hayden and Stuart Udall, the Secretary of the Interior from Arizona) and the federal government, Department of Interior Bureau of Reclamation broke ground.

 

CAP was not the only system changer that happened in 1968 Arizona!

 

One of the most important triggers in the shift from the second to third policy system was the entry of the urban municipal perspective into the state policy system. This occurred because of the 1964 S.S. Supreme Court Baker v. Carr reapportionment decision. Berman thought Arizona’s subsequent 1968 reapportionment changed the policy system, but not in a way progressives and liberals would expect.

The year 1966 marks a watershed in Arizona politics. Running under the court-ordered reapportionment plan, which based representation in the state legislature on population, the Republicans, for the first time in state history captured both the House and the Senate. Reapportionment also severely reduced the influence of the rural conservative Democrats, and indirectly, of mining, ranching, and farming interests in state politics.[v]

This was because Republican urban areas (Maricopa County) increased their legislative strength immeasurably, and the state became truly two-party.

 

On the other hand, both Osborne and Landry (in Fosler) focus on the change brought to state government by Babbitt in 1978-87, considering him as a more or less “modern” governor (his “blueness might have helped”). But considering what came after 1987, the “old-style policy system periodically reasserted itself, Berman describing turn of 21^st century Arizona asserts “there remains much about Arizona politics and public policy that has not changed from previous eras, as the state continues to reflect cultural, constitutional, and other long-term influences or conditions”[vi]. The quest to link the emergence of a state-led ED agenda, an entrepreneurial one in particular has been a difficult one because the governor’s office  simply has lacked the horsepower—and gubernatorial administrations have been so “uneven” in their pursuit of a sustained ED agenda. It will be little surprise that deep into the Contemporary Era, Governor Jan Brewer privatized Arizona’s state-level ED. That decision could be viewed as the logical continuation of a pattern that dominated the Transition Era as well.

 

The governor’s office, as described previously, is not perceived as particularly strong. Governor Sam Goddard did acquire a budget office (state Dept. of Finance) in 1966—the last state in the Union to adopt an executive budget. Previous to that “any influence the governor had on budgeting decisions was largely coincidental”[vii]. In 1968, a constitutional amendment expanded the governor’s term to four years and reduced the number of independently elected officials by two—leaving twelve remaining. In the early 1970;’s the legislature (see below) acceded to state bureaucratic reorganization (which included economic development). In 1974, the state adopted a merit system. But at the same time, the legislature itself professionalized, creating a legislative budget office capable of inserting itself into bureaucratic policy-making. The tenure of leadership in commissions and even departments does not match the governor’s—inhibiting the development of a gubernatorial “administration”. While there is no pocket veto in Arizona, the governor has used veto power to get the attention of the legislature (the governor does have a line item veto but local tradition inhibits its use).

 

Succession, given the flux during our Transition Era (six governors did not finish their term in office) was an important dynamic in the evolution of the third state policy system. An impeachment, a jail term, and a resignation further reinforced the institutional weakness of the governor, and the exercise of legislative influence and bureaucratic autonomy in a ED policy system composed of hybrid commissions and authorities. Since 1968 Republicans sat for thirty-three years and Democrats twenty-one. Of the sixteen governors since 1948, only two (Babbitt and Moffatt) were born in Arizona (three from Missouri, two from New York City, one from Mexico, and six originated in Confederate states); since the 1990’s two from NYC, and one each from Missouri, LA, and Ohio. At least no one was born in Austria.

 

As much as anything, however, during the Transition Era in particular, partisan divided government has frustrated the expansion of gubernatorial power.

In the 1950’s and early 1960’s, Republican governors faced legislatures controlled by Democrats. A period of party government under the Republicans began in 1966, but ended in 1975 when the Democrats took over the governor’s office and the Senate. For the next several years Arizona had a Democratic governor and a legislature usually controlled, though often narrowly, by the Republicans. That ended in 1987 when Republican Evan Mecham briefly took over the job as governor. In 1988 divided government again characterized the state until 1993, when Republicans gained full responsibility for running the state.[viii]

Babbitt, considered as the first “modern governor”, was a strong and effective governor largely on his ability to fabricate consensus in a paralyzed policy process. Strong governors, Babbitt, Symington, and Napolitano, have been known for their uncommonly high use of vetoes (the latter, 180 a state high).

 

Pre-Babbitt State-Level Economic Development

The old system, therefore, had a distinct rural versus urban tone, deep-seated bias, which if anything, compelled those metro areas to stand on their own, forge their own path, and develop their own fairly autonomous political and policy sub-system reliant upon local government.

 

The ED-related vision that propelled the old policy system was of past growth trends repeated into the future: tourism and health/climate-related moderate intensity growth, and reliance on the so-called “4 C’s: cotton, copper, cattle and citrus economic base—amended to include tourism—which was largely a urban municipal ED strategy which the state did not, or could not, inhibit. Structurally, state ED was almost non-existent apart from support for the elements of its economic base, a general low-tax, minimum government, low regulation Privatist business climate that came almost naturally to the closed policy system—and water/highway infrastructure. Arizona approved right-to-work in 1946.

 

Aside from infrastructure-related EDOs, the state lacked a solid EDO capable to playing a serious role in ED policy-making. The Phoenix Chamber was the dominant player in the state—and that was an outsider to the old state policy system. That all changed radically during and immediately after the Second World War. In April 1956, the state approved an Industrial Development Authority enabling legislation that authorized local governments to form industrial development agencies to issue tax-exempt IRBs—in the flurry of states that adopted IRBs during the so-called American economic development “shadow war” between the states.[ix] The Act further decentralized the Arizona ED state system as local governments, city and suburb alike, across the state created an EDO with sufficient authority to pursue local ED.

 

After 1940, Arizona non-agricultural employment grew 50-500 percent faster than U.S. non-agricultural employment over the next four decades, until 1980. By 1980, Arizona’s manufacturing employment was 1700% greater than its 1940 level. Service, trade, FIRE and construction sectors were 1100% higher. Agriculture, however, 17% of state employment as late as 1955, was reduced to 3% by 1982[x]. “The rise in manufacturing was directly linked to the military. The federal government began directing military spending to Arizona in 1941 … the war years saw the operation of several military installations [three army camps and six air bases … [and] defense industries. … During the Cold War military installations in Arizona continued to serve the national defense, but the state’s war-related industries began to serve civilian as well as military markets. … Electronic firms were particularly attracted” to Arizona[xi]. After 1970, this sector picked up considerable momentum, with consequences to be discussed shortly. The old state policy system was as much an innocent bystander as player in all this. Phoenix and Tucson were transformed into growing metro areas with a simultaneous growth of incorporated and unincorporated suburbs that over the years joined forces with the rural old system to put constraints on Phoenix and Tucson annexation campaigns.

 

In a noteworthy initiative, Republican Governor (later Senator) Paul Fannin established the private 501©4 nonprofit, the Arizona-Mexico West Trade Commission. Stating that “God made us neighbors, let us be good neighbors”, Fannin signed an agreement with this Sonoran state counterpart in 1959. Intended to foster economic prosperity and quality of life through advocacy, trade, networking, and information.. It was subsequently restructured by Governor Jack Williams in 1972, renamed the Arizona-Mexico Commission, and formed six committees: trade, tourism, banking and finance, health, agriculture, and livestock, and lodged in the Governor’s office, it stressed private sector relationships and initiatives. Today it is housed in the Governor’s Economic Opportunity Office. The AMC usually goes unmentioned in the list of international/export/trade state entrepreneurial EDOs, but it is one of the earliest. It does bear the curse of being private, rather than governmental.

 

Carl Hayden, Senator, his own player, made the Central Arizona Project a signature initiative—picked up by along the way by a string of governors beginning with McFarland (1955). Water access permitted attraction of manufacturing and later electronic/semiconductor manufacturing, firms possible. Privatist Phoenix-based political and ED elites (including Barry Goldwater, soon Senator) marketed the area, presenting a serious autonomous, challenge to the old now 1950’s state policy system. By the early 1960’s the old state policy system was under attack, still entrenched in its legislature and bureaucracies until the Baker versus Carr reapportionment decision in 1964 when its electoral pillars were toppled. The control by old policy system legislative leaders was fragile, and involved compromise. In 1968, Congress approved and provided initial funding to CAP, and the federal (Interior) Bureau of Reclamation commenced construction. The cavalry, in the form of diverted Columbia River water, was on its way to support further Phoenix (and later Tucson) growth.

 

Bruce Babbitt, a Democrat, is generally held as the first modern governor, but Jack Richard Williams (1967-75), a Republican former radio announcer and three term, Charter Government Committee member, mayor of Phoenix Williams served for three terms, including the first four year gubernatorial term. Williams pursued a consistent, if low intensity ED agenda (defended by his principal supporter, the Phoenix-based newspaper, Arizona Republic, as reflecting the reality of a “state constitution that doesn’t give the governor much power” (Wikipedia)). He set up the first coherent state-level EDO (see below) and was the first to establish the Indian Development District to lead ED on Tribal Reservations. Overlapping terms with California’s Reagan, Williams also stressed business climate (property tax reform, balanced budgets, and like Reagan got himself in trouble with (community development and union mobilizer) Cesar Chavez, who led an unsuccessful, but politically disruptive, recall initiative based on Williams’s signing of a Farm Labor bill that forbade striking during harvest.

 

By the early 1970’s the state of Arizona required a lead EDO to cope with all this. In 1972 the Office of Economic Planning and Development (OEPAD), after which a goodly number of current Arizona sub-state EDOs are named) was established. OEPAD, congruent with the traditional old policy system priorities, pursued a state recruitment effort to attract manufacturing TO RURAL AREAS. It provided technical assistance primarily to local rural municipalities to attract and site such facilities. During these years, the agency, exempted from civil service, acquired a reputation for “being a dumping ground for political appointees” and the rural attraction effort, competing as it was with professional Phoenix-based economic developers, was not successful. When Babbitt first became governor (1978) Phoenix political and economic development leaders met with him early on to replace OEPAD’s rural strategy with an urban one. They were partially successful.

 

As the second policy system entered into decline and the third slowly evolved over the twenty years between 1964 and Bruce Babbitt in 1987, a sort of courthouse style politics characterized by strong, populist/evangelistic conservative rural-biased state legislature and a moderately empowered governor with less than adequate influence over his various state bureaucracies, an aggressive state judiciary did not lend itself to policy coherence or sustainable administration and management. Over any period of time there were always many fingers in the policy-making pot. Vetoes and legislative involvement in bureaucratic decision-making were earmarks of Arizona’s third state policy system that was often typified by periodic policy flare-ups and quirky issues that both inflamed and distorted its operations. In the Transition Era several sorry episodes over Martin Luther King’s birthday noticeably affected the viability of ED programs and strategies and brought economic developers into policy areas not of their immediate concern.

 

Which brings us to Bruce Babbitt. His story begins with the election of Mexican-born Democrat Governor Raul (Hector) Castro, Fidel’s brother—just kidding.  Castro in 1977 was appointed by President Carter to Ambassador to Argentina, and the Secretary of State, Wesley Bolin, next in Arizona succession replaced him. Bolin died about a year later, and since the replacement Secretary of State (Rose Mofford) had been appointed, the next in line was Attorney General Bruce Babbitt, who, like Castro had been initially elected in 1975. During the three year interlude, much was happening, and little in fact was processed through a state policy system that had not made the transition from “the old policy system” to a new one. Babbitt, by the time he got to office in 1978 inherited a state in which key and highly salient and controversial initiatives were stalled, and the state’s decision-making process unable to produce decisions.

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Bruce Babbitt: Arizona’s first “modern” governor?

Babbitt’s almost accidental arrival at the governor’s office, not only changed the office but may well have changed Arizona’s policy system. That question, did he create a new policy system or not, is  one we will grapple with in the remainder of this chapter. The answer lies mostly in what happens after Babbitt, but the alternative is Babbitt may well have considerably “enlarged” the policy system, its scope and variety of actors, but left the engine, the little black decision-making box which determined policy outputs, essentially unchanged.  If so, look deep inside the current state policy system and one sees profound continuity with a policy system that has rolled with the punches since 1912 state admittance. There is a third option: that the state policy system has rolled with so many punches over too long a time that it has incrementally, not abruptly or even visibly, become modern in a very distinct and somewhat unique Arizona style.

 

That Babbitt was a successful governor cannot be denied. A scion of a prominent Flagstaff family, he was the first Arizona-born governor since 1948 and only the third in its history (there is only one more since). He was its youngest governor ever. Arguably, he may be Arizona’s most effective governor. Initially, legislative Democrats provided him support but through most of his two administrations, Republicans, albeit by a slim majority, held sway. Babbitt’s use of many, many vetoes, especially in his early years, was very effective. Republican House majority leader Burton Barr and Babbitt worked well together around water issues and Babbitt’s experimental venture into community development and health care. When he left in 1987 the state system looked really different from what he inherited. This has invited much admiration from the academic literature. What Babbitt did was important; how Babbitt did it may be more important. Babbitt through charisma, patience, good timing, and a determination to move Arizona into the modern world thru negotiation and compromise enlarged the state’s policy scope and added new players in state-level ED. He also forged a path for state-level community development.

 

He did not, however, meaningfully empower the governor’s office, break the power of the legislative elites, significantly alter the state’s policy values or priorities, or challenge the state’s default bias to create semi-autonomous public/private hybrid EDOs that spun around a legislative-dominant decision-making core like planets orbiting the sun. The scope of that system, i.e. the range of strategies and programs expanded to include the needs of technology firms delivered by state universities–and the trappings of both the entrepreneurial state and innovation/knowledge-base ED. Babbitt left in place a decentralized municipally-driven ED, but one in which the state played a larger, more “modern” role. Compared to other states, the Arizona governor did not take over ED, or at least compete with legislative elites (like California) and establish her/his “stamp” on its priorities and programmatic substance. That older system as amended by Babbitt would persist into the late Transition Era, and subtly change in the Contemporary Era.

 

There are four separate Babbitt-led policy thrusts during his two+ terms: (1) solving Arizona’s third rail of politics: water infrastructure and environmentalism,  (2) incorporating people-focused CD strategies into the state system., (3) the expansion of new ED strategies and the accommodation of new sectors into Arizona’s closed ED policy system the persistence of old policy system priorities such as rural development and the continuation of traditional core attraction strategy and the privileged inclusion of key firms and sectors into the operation of state ED programs and, (4) His persistent and successful management of a “water management” crisis he inherited upon assumption of the office laid the basis for his future success. Up to 1978 Phoenix had satisfied its water needs by living off the water diverted in the “Salt River Project” dam into over 1200 miles of aqueducts which saturated the “Valley”.

 

Water as Arizona-style Environmentalism

(Does Water-Infrastructure EDOs equal a port authority with Transportation and siloization???

Arizona had no groundwater management program to that point and diverted water was all it had to drink—existing water tables were in crisis level decline by 1978—dropping in some instances ten feet a year. In 1976, an Arizona Supreme Court decision threatened the existing water distribution priority system to cotton farms, (cooper) mining companies, and Phoenix. Legislative leaders had been working on a solution since, but by 1979, the politics surrounding its infrastructure EDO, the Groundwater Management Study Commission, had polarized and paralyzed. Hat in hand they asked Babbitt to mediate.

 

It took six months of hard-nosed negotiation, several breakdowns and finally a Babbitt-compelled “consensus” that looked more like acquiescence. In June 1980 he introduced a Groundwater Management Bill, the state’s first, that established three groundwater management areas with ten year plans that would curtail and hopefully eliminate depletion rates through 2025. It passed the legislature without amendment. On top of an subsequent agreement with the budget-cutting Reagan administration, that resolved a Central Arizona Project crisis by injecting nearly $375 million state dollars into the $1 billion dollar project, Babbitt ensured the CAP would deliver its badly needed water to Phoenix and then to Tucson by 1991.

 

With momentum in hand, Babbitt achieved a watery “hat trick” by tackling yet another water crisis, the increasing toxicity of Arizona water. Through the early 1980’s Arizona was wracked by one pollution situation after another, and again the legislature was unable to forge a solution—in a battle between competing state bureaucracies. Babbitt, a clean water advocate, forced himself into the mess and forced through approval of an Environmental Quality Act that established a state agency of Environmental Quality, made polluter liable for water quality, and established a $5 million dollar state superfund to remediate brownfields. Water quality standards defaulted to levels required for drinking. Babbitt has inherited a state in a water-induced environmental crisis and left it a state with some of the strongest water quality and groundwater management programs in the nation. If water was the third rail of Arizona politics, Babbitt had mastered it.

 

Babbitt and State Level Community Development

In the 1970’s CD had little experience applying its principles, organizational structures or strategies at the state level. Usually, it tempered the application of mainstream ED (incentives, eminent domain, and anti- business climate—and increasingly on dealing with the effects of deindustrialization. Dukakis is known for his first term experimentation, and his second term moved solidly into the sunset/sunrise territory to assist geographies with mature industries develop new targeted clusters. This was the CD strategy that blurred mainstream ED and offered the widest range of agenda possibilities. Babbitt, a Peace Corp, a community development organizer in, of all places, Texas, and a federal War on Poverty VISTA employee, Babbitt held certifiable bone fides as a community developer. His instinctive embrace of the environment—a lifelong commitment, albeit a western-style environmentalism—reinforced a basic CD core perspective.

 

Osborne posits that like Babbitt’s water-related activities, Babbitt’s entry into state-level social services was crisis, fiscal crises, driven. In the same election that Babbitt won on his own (November, 1978), voters approved a California-style Prop 13-like constitutional initiative that limited state expenditures to 7% of state personal income. Cost containment if always a factor, but Babbitt’s second administration’s CD launch four years later showed to me at least that human service community development was a Babbitt signature initiative in its own right. The state’s social service agency, the Dept. of Economic Security (DES up to Babbitt managed the bare minimum of federal social service programs, but the Great Society and HUD created considerable pressure for more aggressive funding and programmatic attention at the neighborhood level, where Babbitt drew much of his electoral strength.

 

In his second term (1983) Babbitt appointed Mexican-born Douglas Patino to head DES and increased its budget by 50%. Patino had worked in three jobs for Jerry Brown and through Patino Babbitt embarked upon a new direction in social services state-level CD social services strategy: nonprofit privatization of neighborhood-level social services programs using state funding, and decentralizing the administration of state programs. It was the latter aspect that was a clear departure for Arizona. Nonprofit “privatization” may well appear to many a bit awkward; the term almost always refers to contract with a for-profit business. In a CD strategy, however, privatization can logically refer to nonprofits.

 

Patino’s DES, decentralized through nonprofit privatization a considerable proportion of DES’s $280 million budget, excepting welfare, unemployment comp and food stamps. The recipients were CDOs of varying types and sizes, from Chicanos por la Causa (CPLC, community mobilization set up by the Ford Foundation), the Urban League, and Catholic Charity. CPLC, a rather large CDO reflected CD’s comprehensiveness tenet, offering city and state funded programs in a for-profit real estate subsidiary, a MBE RLF, job training, unwed mothers training counseling, elderly services, school meals, victim shelters, daycare, mental health and drug abuse. CPLC even played a key role in Phoenix downtown Mercado project. In an added touch nonprofits were contracted to “oversee” or monitor program implementation by nonprofit recipients.

 

Patino’s rhetoric blurred the CD/Mainstream distinction by linking human services “as an integral part … to create a competitive economy. ‘I see human services as a support for the private sector, for our economy. What are the implications for the employer if there is drug addiction in the family, or a high drop-out rate, or a very low income family that needs to give its kids postsecondary education … family malfunctioning has an impact on productivity’. He sponsored a conference for corporate CEOs on day care. In welfare he allowed companies that hired welfare recipients to use the welfare checks for six months as an employment subsidy[xii]. The blurring, however, did little to temper private sector reaction.

 

The Arizona Republic criticized this and Babbitt’s 1985 State of the State address as ignoring the “meat and potatoes of state government, and offering instead “Babbitt’s Dish of Quiche”. That 1985 State of the State was almost entirely devoted to human services, day care, children’s health coverage, a Governor’s Office for Children, expand Child Protective Services—many of which eligible for Patino’s nonprofit privatization. Privatization was extended to health care for low-income (outside our book’s scope) even more aggressively during this second administration. Nonprofit privatization was a major element of Babbitt’s administration—a novel departure for human and health services (Babbitt even contracted with McDonnell-Douglas Aerospace Corp to administer Arizona’s health care cost containment system—a disaster), but strongly congruent with Arizona’s policy system preference for decentralization, shared decision-making, and conventional private sector privatization.

 

Babbitt’s New Directions—Incorporate Technology into the Four “C”

 

Babbitt facilitated the “debut” of electronic and technology sector into Arizona’s traditionally-privileged preferred Four “C” sectors. The leadership and momentum for this sector, however, was internal to the sector, in particular led by the state’s largest and earliest electronics firm: Motorola. Motorola first built an R&D military-related center in 1948. It became a magnet for other firms to follow. By the mid-1980 seven of every ten electronics workers were employed by fourteen firms such as Motorola, Texas Instruments, McDonnell-Douglas and IBM.

 

The electronics agglomeration that developed in the Fifties and Sixties, took off in the Seventies, was helped along by an aggressive Phoenix chamber and the Phoenix Growth Corporation—but was based on internal industry needs and logistics primarily. The state’s business climate, low-wage, low regulation and right-to-work were important, but water was always a problem—semiconductors consume a lot of water in this period. Aside from water, higher education training for engineers, and a solid K-12 educational system increasingly became a serious issue for the burgeoning Arizona electronics sector.

 

Understanding the roots of Mainstream ED’s “knowledge-based economic development”, it is evident that a substantial part of its momentum came from the industry itself. Its labor force was significantly different from the traditional industrial manufacturing workforce—although chip assembly overlapped both. Arizona needed middle-range engineers and the state university system simply did not produce them in quality and quantity needed by Arizona’s firms. Engineers, once hired, needed continual upgrading with technology changes induced by Moore’s law. Part of the reason was Arizona’s K-14 educational system was firmly rooted in the old Arizona—in Babbitt’s year the state required only that youth stay in school through the eighth grade. Teacher salaries, still low by almost anyone’s standards, were dismal in 1980. Technology had not permeated the curriculum or was it available to students. The bond between technology-based firms and education is firm and core to the sector. As the sector matured and diffused into many municipal (and state) economic bases, it permeated into economic development policy-making and strategy due to electronic industry advocacy. That is very evident in Arizona (and, by the way, in Massachusetts as well).

 

The universities, Arizona State, were first to feel the pressure. Arizona did not have Stanford and Dean Terman to lead the way[xiii], it was Motorola that located and motivated a university entrepreneur (Dean of Engineering Roland Haden. In 1978, working with the Phoenix chamber and the Phoenix Growth Corporation, the industry created an advisory committee tasked to work with university. A firm on that committee, was headed by Pat Haggerty, a founder and then chair of Texas Instrument, a friend of Bruce Babbitt since their mutual appointment by President Carter on a 1979 panel to investigate Three Mile Island meltdown. In short order, the meeting with Babbitt was set up. Babbitt was ready—he interrupted the presentation by telling them to think bigger. “I’m not interested in being behind short term or small-time budget increases. Come back to me with a sweeping multiyear program and I’ll support you”[xiv].  A five year, $32 million investment in the engineering school paid for by industry, the federal government, and the state (not the school of course-they only do what they paid to do) appeared on the Governor’s desk. It was approved by the Legislature shortly after.

 

ASU constructed for the College of Engineering and Applied Sciences, a 120,000 sq. ft. Engineering Research Center, installed $15 million of equipment, hired sixty-five faculty, attracted a 900% increase in funded research, and set up a continuing education program In 1984, the National Academy of Sciences rated ASU’s Mechanical and Electric Engineering departments as second and third in the nation. With this momentum a second plan was sent to Babbitt in 1985, this time for $62 million, designed to place the school as a whole within the nation’s top ten. The university constructed a research park, amended its requirements to allow faculty to spend 20% of their time working with private firms, and secure a portion of the patent and royalty payments. Babbitt did his part through state funding of a new Disease Control Research Commission to fund research[xv].

 

Babbitt himself in a 1983 presentation summarized technology inclusion into the state’s privileged sectors:

In earlier less complex times, universities were nice to have, but not essential to economic growth. When Arizona’s first great industry, coper, developed in the late nineteenth century, the main ingredient for success was a strong back and a lot of courage in the face of drought. Then came tourism; its principal ingredients were sunshine and hospitality. Now in 1983, high technology is our growth industry, and the essential resource to sustain high technology evolution … is education, in the form of well-educated citizens with strong scientific and technical skills … Universities and colleges are now an economic asset as important to our economic future as are copper, ore, farms, banks, factories, and airlines[xvi].

Status Quo in Mainstream ED

Despite significant movement in new directions, Babbitt left virtually intact Arizona’s long-standing mainstream ED strategies. Fiscal conservatism, anti-union, low-tax/regulation business climate (see J Brown) attraction with emphasis on rural areas and small business. Nor did he seek to inject the state into local ED efforts. His human service community development approach, however, did make the state a major player in sub-municipal community development. His facilitation of technology/electronics integration into the state’s policy system also made them a preferred sector target for the state’s mainstream attraction program.

 

Early in his second administration, Babbitt’s chief ED policy advisor, Larry Landry (author of the Arizona article in R. Scott Fosler’s anthology), after meeting with key Massachusetts and Pennsylvania economic developers (Michael Barker, Roger Vaughn and Michael Kieschnick), produced an Arizona strategy/plan entitled “Arizona Horizons”. In this work, Landry (Babbitt) recommend adopting Birch’s small business job creation approach, creating new small startups to diversify from high tech. He also stressed the need for aggressive reform in education at all levels. Aside from a small initiative in OEPAD), a two person office of New Business Development, Arizona Horizons had little impact. The Office of Business Development was instrumental in the University of Arizona’s founding of a seed capital for-profit EDO to commercialized ideas developed by its faculty.

 

Landry left the Babbitt administration shortly after—and Babbitt from that point on spent considerable effort in his newly announced Presidential bid. Babbitt’s replacement for Landry, Beth Jarmin, is cited by Osborne as asserting that “Babbitt no longer paid much attention to economic development”[xvii]. For the most part during the earlier Babbitt administration, OEPAD, as Landry himself describes that while Babbitt changed OEPAD’s leadership (Landry), Babbitt “strongly reasserted his [and the Agency’s] conviction that rural economic development must remain the agency’s ‘highest priority’, and that Arizona must strive to ‘balance economic opportunity’ throughout the state and not concentrate its efforts on the two major metropolitan areas”.[xviii] Babbitt thus did not challenge the Legislature’s approach to ED.

 

Landry did, apparently on his own initiative, intensify the application of Birch’s small business creation to the rural economic development program but reports that his efforts to improve rural capital formation were not successful. He produced a publication, “the Other Arizona” which asserted rural quality of life was how rural areas could compete with its metro areas—which was not lost on both metro areas as each also produced a “quality of life” publication. Landry also set up a statewide rural conference in 1979, which continued through his tenure. He restates that OEPAD’s retention and expansion program was limited to technical assistance to local EDOs, especially chambers, and the latter were prodded to get out of their offices to visit firms in their community. Several new firms were located in rural Arizona, discovering that technology firms were unlikely to move into rural locations, but that supplier firms were more realistic targets[xix]. This is an early version of what today is called a “cluster” strategy[xx].

 

Attraction and recruitment, however, was a bit more complicated. Industrial recruitment had always been OEPAD’s preferred strategy and certainly was that advanced by local EDOs. The state, of course, was a recent entry into recruitment, (OEPAD was created only in 1972, and the Legislature was in full support of this strategy, alongside its rural ED approach. The state did not lace its attraction program with incentives, but instead stressed marketing and media placements. It spent about $30,000 annually and that compared to $600,000 for Florida and $1 million for Nevada. OEPAD worked with and through industry trade associations and local EDOs—often participating on their “prospecting trips”—trips paid for by the Arizona Association of Industrial Developers[xxi]. During the early 1980’s these “trips” increasingly refined their target firms, and after 1984 focused on high technology and aerospace supplier firms—a clear tie in with Landry’s, Birch-inspired, proto-cluster development approach.

 

By that time (1983), Arizona got a serious jolt to its attraction program, in the form of a rejection by the high technology Microelectronics Computer Consortium. It chose Austin Texas instead. MCC was an offspring of DEC and a pioneering innovator Gordon Bell. Consisting of twelve firms, it would invest in a $150 million superconductor facility that over the next few decades would launch a number of new firms. The gain spurred Austin’s rise as a leader in high technology, and caused a noticeable transformation in its downtown evolution. The loss was keenly felt in Arizona.

 

The reasons cited was that “Arizona had not yet developed educational excellence in the engineering and research”, and did not have “sophisticated” cultural resources attractive to the professionals the Consortium were recruiting. This is a replay of the earlier “quality of life” theme that state economic developers thought worked in their favor. At the Governor’s request, OEPAD and the area newspapers organized a Governor’s Symposium on High Technology in May 1983. It attracted a diverse, but impactful audience of about 150. Breaking down into work groups, it came up with a series of recommendations across several strategies, education, manpower training, venture capital, industry-university partnerships. The Symposium accelerated the implementation of Babbitt’s technology initiative, described above, and inspired the 1985 second five year plan.

 

Within Arizona’s mainstream, industrial recruitment wing the reaction to all this was decidedly mixed (according to Landry). AAID, chambers, and local EDOs were reluctant to embrace the “entrepreneurial economy” that Landry had developed, and Babbitt presented at the Governor’s Symposium. Advocates for the new strategy were not included within the mainstream ED professional institutions. “A new constituency” had to be formed. Babbitt set up a Task Force on Innovation, staffed by Landry’s OEPAD, composed of a selected diverse variety of institutional leaders relevant to the new approach. Its recommendations led to the Babbitt forming the Arizona Innovation Consortium in February 1985. The Legislature bought into this new approach, authorizing a magnificent sum of $130,000 to create a new business development program that reflected its new directions (startup and entrepreneurism). OEPAD published a booklet for business startups. That may have been “one bridge too far”, however. The Babbitt/Landry New Directions threatened the Legislatures, and traditional Mainstream ED professionals.

 

In July, 1985, the Legislature terminated OEPAD (located in the Governor’s Office), and created the brand new Arizona Department of Commerce. As summarized by Landry, the reasons behind the Legislative action were: “to remove the organization overseeing state economic development from the governor’s office; and to relegate the function of economic development to the status of a major department. With this change, the legislature is expected to be more supportive of the department and more attentive to economic development issues in the future”[xxii]. To an outsider, the upgrading of an “office” to a cabinet level department could be considered a step up in a state’s commitment, but in the Arizona context, a department was more accessible to Legislative input than an aggressive Governor’s office. In any case, in 1986, termed out, Babbitt declined to run against McCain for the Senate and launched his campaign for the 1988 Presidential nomination. In the 1986 gubernatorial election Evan Mecham, a Republican Harold Stassen of Arizona, an automobile dealership owner was elected.

 

Après Babbitt, Les Deluge

Babbitt by the time of his departure had established successful working relationships with powerful legislative leaders—but they also departed the scene leaving a new generation of legislative leaders for Mecham.  Let’s not overthink the governorship of Evan Mecham. He is likely to have been the first, maybe the only governor in the nation, to simultaneous face removal from office by impeachment, a recall initiative election, and a felony indictment (which was later compounded by a second change of obstruction of justice for which he was convicted).

 

Mecham was an aggressive populist, an outsider to the Republican establishment—and the Phoenix business leadership. He was anathema to the progressive wing of the Democrat Party. Mecham commenced his term on January 1 1987 and left office in March, 1988 after an incredibly turbulent year. He did open a Dept. of Commerce trade office in Taiwan. We will not mention his Martin Luther King Day fiasco that resulted in the canceling of some forty-five conventions, his notorious carryover to Arizona attraction and recruitment that attracted comment by many prominent economic developers at the time, nor his numerous bruising battles and vetoes with Republicans in the Legislature. Mecham was removed from office by virtue of his conviction for obstruction of justice. He was succeeded in office by our already introduced Secretary of State, Rose Mofford, who was previously ineligible to succeed the deceased Governor Bolin, necessitating Babbitt’s succession as Attorney General. By the time he was ousted from office, his unwilling successor, Rose Mofford was neither inclined nor situationally able to mobilize around any gubernatorial agenda. Stability and time to heal were important to repair the disruption Mecham caused in such a very short time. Mofford assumed the role as caretaker and declined to run for office in the next election (November, 1989).

 

As one might expect, the gubernatorial chaos followed by a calming, but non-innovative stability of Mofford reinforced the Legislative hold on policy-making, and the day-to-day execution of the state’s ED programs and strategy. The strategy thrusts inspired by Babbitt and Landry were not repudiated, but instead were incorporated into semi-autonomous EDOs, primarily university and industry-associated, congruent with the new directions. The pattern of ED policy system revolving around semi-autonomous or non-state EDOs, rather than a strong gubernatorial administration, had reasserted itself. The Dept. of Commerce continued the (legislative) priorities of industrial recruitment, and rural ED, although electronics and high tech sectors were now a principal target of Arizona’s low-key attraction strategy. If anything, economic development continuity reinforced th dominance of municipal ED-implemented strategies and during Mecham crisis and stasis the Phoenix Group of 40 (GPL) became active and vital players in state policy and budgeting. But the saga continues.

 

In January 1991, Fife Symington, sat in the governor’s chair. Republican Symington was a NYC-born, Phoenix real estate developer (sound familiar?), elected in the state’s only instance of a gubernatorial election. Combative and partisan, he duked it out with Democrats in the legislature—but had time to spare to fight with Republican leaders as well. He vetoed at one point seventeen successive bills. He particularly railed against initiatives that raised taxes and increased expenditures. Working with Republicans, he achieved several tax cuts. In 1992, Prop 108 passed. It required two-thirds vote in House and Senate to increase taxes of fees that caused a “net increase” in state revenues. In his second administration, his past, pre-gubernatorial real estate dealings caught up with him. In 1996, he declared personal bankruptcy, several scandals had erupted in state bureaucracies, and entered into a loud battle with the legislature to reduce university budgets to achieve further property tax reduction. During Symington’s administrations the tax load shifted to “winter residents” and tourists (so-called ‘tax-exporting’).

 

Excepting the Babbitt era, Arizona has been reluctant to utilize federal grants and programs, and has done the minimum on welfare and social services required from federal mandates and regulations. This has taken the wind out of Babbitt’s experimentation, and has correspondingly reduced any drift to a state community development-style strategy. High benefit levels have been viewed by many Arizonians as encouraging, for better or worse, immigration. When bad times flooded the welfare rolls, the state has been most restrictive- in the 1990’s the state welfare program was entitled “Employing and Moving People off Welfare”. Arizona’s poverty rate during this period was considerable higher than the national rate.

 

The natural default was to low tax and low spend to the extent possible, usually linking that to adverse effects on business and attraction of industry—hence economic growth. Supply-side tax cuts to promote economic growth and job creation were critical elements of Governor Symington’s fiscal strategy. Tax cuts for business are compatible with this approach. There is no mistaking this state for its neighbor California.

 

Symington, the Sagebrush Rebellion and Arizona environmental “exceptionalism”.

In 1996, not a good year for Symington, the state created the Water Banking Authority (yet another infrastructure-related semi-autonomous hybrid EDO) to purchase water for storage in the state’s underground aquifers. The initiative was part of what has since been called the “Sagebrush Rebellion”.

Arizona had joined that rebellion during the 1980’s when the legislature had overcome a Babbitt veto and laid title claim to over 11 million acres of federal land in Arizona. The federal government owns about 31 million acres (around 42%) of Arizona as of 1998. Such land was administered by federal agencies, chiefly U.S. Forest Service and the Bureau of Land Management. Babbitt had vetoed the legislation seeing it as a “land grab” by cattle ranchers who, he believed, would overgraze the land. “”It was not a rebellion, he said, but a rip-off”[xxiii].

 

That controversy was negotiated out by Reagan’s Secretary of Interior James Watt who relaxed federal grazing (and other regulations) restrictions. But thirteen years later in 1993, another Interior Secretary, by name of Babbitt, restored the grazing fees and restrictions. He also called for revision of the Mining Law of 1872 that allowed for cheap private “patents”, i.e. mining leases on federal lands. Symington railed against this in his 1994 State of the State address (several western governors by this time were in public opposition) and he demand Arizona take over all lands owned by the Bureau of Land Management. “The heavy hand of federal power is squeezing our citizens. On every front—mining, timber, ranching, and agriculture—the communities of Arizona have found themselves under increasing pressure”. He further expanded the rebellion’s scope by attacking the Endangered Species Act “one of the worst pieces of legislation that’s ever been passed by Congress”—a reaction to a federal court injunction stopping an Arizona logging to protect the spotted owl. The judge Symington said “has a philosophy of keeping natural resources locked up, and he’ll do that until everyone is out of business”. Symington’s position was the lands should be managed by the state Land Dept.[xxiv]

 

The Sagebrush Rebellion is closely tied to federal lands and western states, but by the mid-1990’s, a larger reaction against various initiative and federal legislation across a variety of “environmentally-related” topics involved not only the state of Arizona, its legislature, but several of its municipalities. EPA in particular through its administration of the Clean Water Act has generated a series of complaints and legislative and bureaucratic resistance. The state usually had wound up complying, but does little more than the letter of regulation requires. Berman attributes much of this to Arizona’s cultural resistance to “being pushed around by the federal government”. In any case by the late 1990’s “the state’s urban areas have among the most stringent auto-emissions tests in the country” (p. 165). In 1996, the EPA found Phoenix air quality in “serious violation of federal standards for carbon monoxide and particulate pollution” and gave the state 18 months to come up with a plan to rectify the situation. An associated ozone problem also was disconcerting as it created a potential for further EPA regulation that would restrict business and growth. In 1997 the EPA classified the Phoenix ozone as “serious”.

 

All of this prompted not only Symington but various powerful state legislators into rhetorical action. “A lot of us here are committed to weaning ourselves from the federal government. The point is freedom … Shouldn’t Arizona decide what hoops we are going to make business and industries jump through” declared a state legislator. The legislature swung into action, authorized sending a delegation to a proposed “Conference of States” which hopefully would approve constitutional amendments to required federal balanced budget and allow suing the feds for mandates. Taking action the legislature passed a law in violation of a federal law (and, I believe, an international treaty) that allowed Arizonians to manufacture and use chlorofluorocarbons in cooling systems. Symington endorsed the legislation, comparing it to the Boston Tea Party. A series of other proposed state initiatives were also introduced but not approved (killing wolves, for example). In an action reminiscent of Governor Mouer and the 1934 Parker Dam, Symington sent in the state police to take over and operate the federal Grand Canyon National Park when the federal government “closed down” that year. The Pentagon threatened to nationalize Symington’s police force, prompting, the Governor, the Speaker of the House, fifty unarmed state National Guard troops and an assortment of Park Dept. employees to travel to the gate, bang on it, with appropriate media coverage, and then return home, without the assistance of a Los Angeles tug boat, when the Interior Dept. denied them entrance.

 

The Border, Immigration and Arizona ED/CD

Arizona borders on the Mexican state of Sonora, a 361 mile border that has over the last century and a half developed its own lifestyle, economy and culture distinct from much of Arizona. Tourism and maquiladora (the federal trade/manufacturing program in which companies often set up twin facilities on each side of the border to take advantage of different sets of benefits or segregate management functions from manufacturing) are important features of local economic bases. Immigration (legal or otherwise) and an often informal family-centered binational identity is simply built into the 1990 border fabric, as is the darker side of being a border community (crime, prostitution, illegal trade, drugs).

 

Use of low wage Mexicans for farming as well as manufacturing has been actively promoted since Congress first passed the Mexican guest worker program during WWI.  Some 60,000 took advantage of that program and migrated to Arizona. After the war the border tightened up; the Border Patrol was established in 1924. During WWII FDR by executive order set up the “bracero program” to deal with mostly agricultural labor shortages—the program was built around the needs of American growers and it continued, formalized into a program through 1964 when LBJ terminated it to support union concerns. From the worker viewpoint the bracero program while it offered work where there was none, abuse and mistreatment were not uncommon and wages by anyone’s standard could not support a family. Child labor was taken for granted.

 

The concern with illegal immigration (always to some degree for some a concern) became more an issue in the 1980’s and gathered strength during the Nineties. During this period, the major issue was the cost it imposed on services and government expenditures (health care, welfare, jails and police)—cheap labor was a mitigating factor. The border was viewed by most locals as a federal responsibility, and costs associated with the darker side of immigration/border community were blamed on negligent federal oversight of the border—the Border Patrol and federal immigration policies and administration.

 

Arizonians, never accused of having a love affair with the federal government, pressured state government to address concerns and costs. Governors and the state legislature were drawn in and the nexus of concerns became a prominent feature of Arizona politics—particular as the issues of being a border community expanded deeper beyond the border to metro areas like Tucson and Phoenix.  Joe Arpaio, the infamous Maricopa County sheriff, was first elected in 1993. The federal government responded to Arizona complaints, roundups, periodic crackdowns on illegals, and local police adopted a vigilant “proof of citizenship” surveillance that easily crossed over the line to harassment, and worse.

 

Tensions skyrocketed and, as one expects, this had the effect of adding a serious community development mobilization stimulus to neighborhoods populated by Hispanics. While mainstream ED could point to the benefits to cheap labor to the local economic base, that labor sure looked like discrimination and exploitation to community developers. Civil, as well as economic and human rights permeated into ethnic-based community development and older CDOs expanded, and new ones formed.

Given the pervasive schism between the two wings of American economic development, two rival and usually feuding approaches to Arizona ED duked it out, and added a great deal of complexity to Arizona ED. Truth be told, mainstream ED dominated the literature and Arizona ED was (and is) usually characterized as Red State, attraction/business climate ED—which is largely correct—but the sizeable and equally visible, but local and neighborhood-based, highly contentious community development wing was seldom mentioned. A robust community development wing coexisted with the more visible mainstream wing during the entire of the Transition Era—and certainly during the Contemporary Era.

 

In 1994, Governor Symington and most state legislators did not favor the approach taken by California voters who passed Prop 187 which denied social services, public schooling, and non-emergency medical care to non-citizens. The reason for this “liberal” perspective, however, chiefly centered on the ill effects a Prop 187-like initiative would have on trade and Arizona economic growth. Arizona, as expressed in the early formation of the Arizona-Mexico Commission has always played a significant role in Arizona mainstream ED. That Commission worked to create, to the extent possible, a more seamless border economy.

 

Symington stressed that illegal immigration was not as intense in Arizona as it appeared to be in California and there was no need for such legislation. In 1994 the state exported more than $2.4 billion, and over 40,000 jobs were dependent on that trade and tourism. NAFTA went into effect on January 1, 1994, and a good deal of Arizona’s corporate leadership want in some way to take advantage of its promised opportunities. During the 1990’s the threat or the actuality of American jobs lost to cross-border American-owned factories was not felt. Initially, studies demonstrated the opposite was happening and Arizona was gaining jobs[xxv]. In any case, it is easily demonstrated that whether or not immigration is its own policy area, immigration profoundly permeated into the theory and practice of Arizona economic and community development. By the mid to late 1990’s, it was assuming an ever-increasing importance in the dynamics of its ED-related policy system.

 

It was during the mid-1990, however, that the pace of Hispanic immigration would dramatically increase. In 1980, Arizona overall had grown nearly 35% between 1980 and 1990—nearly a million new residents (3,665+ million). By 2008 that had exploded to over 6.5 million (from 29^th to 14^th largest state). Latinos accounted for nearly two-fifths of that growth. One out of two between 2000 and 2008 were Latinos. In 1980 Latinos numbered about 441,000 and by 2008 they totaled more than 2 million.—16% of Arizona’s population to just over 30%. Whites declined from 75% in 1980 to 58% in 2008. The distinction in age cohorts between the two was pronounced and itself contributed to the tension and the identity distinction. The reasons for the surge are commonly attributed to NAFTA, which triggered a movement of marginal Mexican farmers to America for better jobs, and blockades set up (Immigration and Naturalization Services) in California and Texas that channeled more immigration inflow through Arizona[xxvi].

 

Indian Tribal Economic Development

Arizona is an excellent state to introduce Indian Tribal economic development and the Symington administration includes several important topics. There are 21 federally-recognized tribes in Arizona and in aggregate they comprise 19.8 million acres of land (26% of the state), more than any other state (in land acreage).Tribal Indians in the 1990’s were about 5.5% of the state’s population—but an estimated one-fifth of Arizona’s Indians did not live on the reservation.

 

Indian Tribal reservations governed by sovereign Tribes  within sovereign states but who are governed by the United States federal government, making Tribal reservations nearly independent from states (states cannot exercise authority unless specifically authorized by Congressional legislation), but quasi-dependent sovereign entities domestically—the legalities of their jurisdictional administration and legal relationships are complex and arguably have not facilitated economic growth or Tribal political and administrative capacity. Each Tribal reservation constitute in our model a distinct sub-policy system, within a Tribal policy system, largely (but not as shall be seen completely) autonomous from relevant state and municipal policy systems. Indians who live “off the reservation” in non-Tribal jurisdictions hold the right to vote in such jurisdictions in accordance with state law. Some Tribes and some reservations have entered into legal contracts with non-Tribal jurisdictions for services such as law enforcement (not in Wyoming however, as the show “Laramie” attests).

 

To the extent the federal government exercises authority over the activities of Tribal (and reservation) policy systems, it normally is through the oversight of federal Bureau of Indian Affairs (BIA-Interior). Some Indians assert that “BIA” really means “boss Indians around”[xxvii]. BIA acquired this responsibility from the 1934 federal Indian Reorganization Act, and at that time, BIA negotiated Tribal constitutions with each Tribe. The structure of governance included in these constitutions, despite many different names or titles, mirrors that of the federal constitution, i.e. three branches, checks and balances, etc.

 

The Tribe is the equivalent unit to a “State”, and each Tribe can create sub-units, usually called by outsiders “reservations” which are rough equivalents to a municipality. In Arizona, the largest Tribe is the Navajo (which extends to New Mexico and Utah) The Navajo Tribe in the 1990’s totaled about 220,000 of which 60% lived in Arizona. The Arizona Navajo reservation totals about15 million acres, about the size of West Virginia (it completely surrounds the independent Hopi Tribe reservation 9,000) over which the Navajo have no jurisdiction). The two Tribes have historically not played well in their sandboxes. The Navajo tribal government whose tribal chair (president) and tribal council (legislature) are directly elected. Tribal judges can be appointed or elected, and the Tribal Supreme Court has evolved precedents and made legal decisions which reflect tribal traditions as well as the more customary American legal definitions and concepts.  The Navajo Tribe as of the 1990’s had created 110 local “reservations” or local governments which the Navajo title “chapters”. Each Navajo chapter operates its own local government system, based on a 1937 Tribal law. As of the 1990’s, the issue of chapter “home rule” is relevant to the Navajo, as the Tribal Government, its capital is in Willow Rock, Arizona, maintains a central bureaucracy and assumes responsibility for fiscal (taxation) and service delivery for each chapter—unless that chapter can negotiate its “home rule”[xxviii].

 

States cannot tax Tribal lands, residents or economic activities, and with a few exceptions in Arizona the state provides few services. Berman says “historically, Arizona state and local politicians have ignored the Indians” and the federal government is regarded by the Indians as their “go to” government. Arizona Indians have from time to time advocated they are deserving of some level of state services in that they do provide beneficial externalities (tourism for instance) to Arizona. The issue of services is important as most appreciate Indian reservations often are among the very poorest jurisdictions in America. As one applies the information conveyed in this section to other Tribes and states, the reader might therefore be sensitive to variation among Tribes and states, and each Tribe establishes its Tribal intergovernmental system. In the Navajo-Arizona context, economic development, for example, is a Tribal function during the 1990’s. The Hopi Tribe could handle ED differently.

 

Berman describes Arizona Indians as “land rich, but dollar poor”, plagued by serious unemployment, poverty or inequality if one prefers, historically poor educational systems, substandard housing, and inadequate health[xxix]. Location of the reservation and chapter, i.e. if it is nearby a major urban area for example, can noticeably assist or isolate economic growth and opportunities. In such a context, economic and community development is usually extremely highly prioritized in the Tribal/chapter policy agenda. Most of the issues relevant to non-Tribal jurisdictions can be found in Tribal/chapter ED/CD.

 

Among the shared issues and dynamics are the more or less normal controversies and situations found in everyday politics (scandals, bad decisions, variation among policy systems, policy paralysis, etc.) and corporate welfare for non-Tribal corporations, and the impact of ED on the environment are not uncommon. In the Navajo instance, coal strip-mining activities have been criticized for health and environmental after-effects. The trades-off between jobs, good jobs or bad jobs, and externalities is arguably even more intense in Indian ED. Tribal leaders making such choices are indeed between a “rock and a hard place”. Gas and oil production brings badly needed revenues—and it is in this context, that the issue of gambling and casinos is firmly lodged.

 

Gambling is the issue that upset the traditional non-involvement of Arizona state government with Tribal government in the 1990’s. The gambling deck of cards was shuffled in 1988 when Congress approved the Indian Gaming Regulatory Act. In that Act Congress allowed Indian Tribes to establish profit-making gambling entities on their land, but required that a compact be negotiated with the relevant state and that the compact can include revenue-sharing, operational hours, work conditions, and general business regulatory standards. The kinds of gambling permitted must correspond to that authorized by the state. Initially, the “opportunities” provided by Indian gambling were not appreciated by the state of Arizona, especially during the Mecham-Mofford interlude, and when Governor Symington came into office, he was quickly visited by several Arizona Tribes seeking compacts.

 

By 1992, several Tribes were illegally installing machines, and so the FBI was ordered by the U.S. Attorney to seize the machines—which they did. One Tribe (Fort McDowell Mohave-Apache Indian Community) refused to give them up, a demonstration and blockade resulted that lasted for several weeks. That standoff, when the Tribe went “toe-to-toe” with the federal and state officials became a subsequent Tribal holiday, and forced Symington to reconsider the state’s opposition.

 

The issue of gambling (installing machines) versus establishing a formal full-scale casino quickly surfaced—rising concern for crime, corruption (Arizona’s history has been saturated with gambling-induced criminal activities—Phoenix for example it was very prominent pre-1940). A federal court-appointed mediator, however, allowed casinos on Indian land “for charity”. Symington, in more or less typical fashion refused to comply with the ruling and in a rare consensus with the legislature passed legislation precluding casinos in Arizona.

 

The standoff shifted to a state referendum and the issues associated with casino gambling multiplied enormously in the controversial campaign. Arriving on his white horse, was former Governor Babbitt, still Secretary of the Interior to negotiate a compromise on what the Tribe could do at their facility. The larger issues and incompatible state legislation were put off to the side—and Symington simply refused to negotiate any more compacts through 1996. That ended when a state initiative passed overwhelmingly that required the governor to sign a gambling compact with any Tribe that requested one—and left open the issue as to whether it had to be on Indian land.

 

Within two years (1998), fifteen casinos/bingo halls were set up and a proposed casino on non-Indian lands, the Salt River-Pima-Maricopa Community, in the heart of the Phoenix metro area. The latter was much disputed, but a compact approved by the Hull administration opened its doors in 1998, a second casino at Talking Stick in 1999, and yet a third casino in Governor Jan Brewer’s administration, the Talking Stick Resort in 2010[xxx]. In a nutshell, one can see the popularity of casino gambling in non-Tribal constituencies and the course of casino gambling in Arizona during the Contemporary Era. Tribal governments have used the proceeds for a variety of educational, social service, annual payments to reservation members, and recreation. That there is another possible story to tell is suggested by Senator Barry Goldwater’s comment: “You legalize gambling in the state, and you fill it up with a bunch of crap”.

 

Post-Fife Symington

Symington as the reader might gather from the following sections was a notable, yet controversial governor, who sadly for the sake of the office of governor continued the downward slope of a governor-centered policy-system typical of the Transition and Contemporary Eras. A businessman, and somewhat a populist, Symington possessed, like Goldwater, and McCain—ignoring Mecham—a say what you think, shoot from the hip (does the reader understand that metaphor?) contrarianism. In the dawning of the Age of Media, Symington’s business past dealings also caught up with him. After his election for second term, he was convicted for extortion and bank fraud—the later latter overturned with appeal and the former pardoned by President Clinton. Under pressure, he resigned from the governor’s office in 1997, and yet another Secretary of State, Jane Dee Hull, succeeded him.

 

Jane Hull was the first of three successive women governors—who ran the state until 2017. Officially sometime during her administration, Arizona entered our ED Contemporary Age—or for our purposes it began with the next governor, Janet Napolitano. Interestingly, none of the women governors completed two terms, Hull and Governor Jan Brewer declined a second term, and Napolitano after her second term elections competed for and obtained an appointment by President Barak Obama as his Secretary of Homeland Security—transferring power to the Republican Secretary of State, Jan Brewer. The governor’s office was not sought for its own power and potential to run the state but inherited through accidental means or as a stepping stone to higher office.  In 2017, another Republican businessman, Doug Ducey (CEO of Cold Stone Creamery) yet another outsider to inside politics was elected. We shall all wait and see.

 

Hull did not rank ED highly on her agenda while in office. Her 1999 state of the state stressed education initiatives (badly needed), anti-crime, Homeland Security (i.e. code for immigration/border concerns). Her previous 1998 state of the state had almost been totally devoted, issue-wise, to education, school, and children-related initiatives and concerns. Stringing through her series of state of the state’s one can see sincere concern for environmental issues, open space, air pollution, neighborhood and rural quality of life and clean water.

 

During Hull’s years in office, the university-driven entrepreneurial state sub-policy whirlpool “flourished”, a bit of an exaggeration to be sure, and developed some new ventures, EDOs, and expanded its policy scope and activities noticeably. Bioscience sectors became more robust (developing a “Bioscience Roadmap” initiative), inspiring creation (2002) of a nonprofit Translational Genomics Research Institute (TGen). The still relatively weak governor’s office only served to further decentralize Arizona mainstream ED into a series of policy whirlpools, such as the university-system, the workforce development, the tourist, and the Dept. of Commerce/local EDO targeted attraction whirlpools. This is not, of course, unique to Arizona, although the failure to generate a strong gubernatorial administration meant the Legislature was the only other body likely to exert an integrated perspective and check the more deleterious aspects of autonomous sub-policy whirlpools.

 

Hull’s contrast with Symington’s Sagebrush Rebellion is stark evidenced by the legislative and Hull’s abrupt shift to smart growth (admittedly, a movement more prominent at the local level, especially Pima County). This 180 degree turnaround reflected the closest the Democrats ever came in recent years to taking over the Senate (they achieved a 15-15 tie with a Republican president)—as well as Hull’s sincere and consistent advocacy of smart growth. Beginning in 1998, the state legislature passed two smart growth initiatives, creating a Growing Smarter Commission that would report back to the legislature the next year, and a second act containing a number of smart growth, land use and planning reforms.

 

A series of subcommittees, public meetings and a host of citizen volunteers followed, the Commission’s purpose came to be define as developing ten to twenty recommendations for action that would improve the quality of Arizona’s growth during the 21^st Century. The recommendations were presented in the form of a 1998 referendum, which was rejected by voters. In that year twenty-three states had smart growth initiative-referendums. While brownfield and water cleanup programs passed in Ohio and Connecticut, smart growth initiatives failed in Colorado while Florida voters approved a five-city high-speed rail initiative opposed by Jeb Bush to promote further growth, not Brown’s climate-control high speed rail. In Arizona, however, at the municipal level a host of growth management referendum initiatives were placed on the ballot and they were very successful in 1998 through 2000[xxxi].

 

Hull seized rhetorical leadership of the Commission by forming a separate, similarly named Commission with the appointment of fifteen members while the legislature “Growing Smarter” initiative prodded communities deal with greater equity the distribution of the costs associated with development. A host of Think Tanks (Sierra Club, League of Women Voters, Goldwater Institute, Morrison Institute, the Udall Institute, and inevitably the Arizona Association of Realtors and the Homebuilders Association entered into the fray. That led in 2000, to the Legislature to pass (Hull to sign) a second legislation, Growing Smart Plus. That legislation empowered, but did not require, municipalities to pass the undefined “fair share” of development costs onto developers. It also placed an initiative on the 2000 ballot (Prop 100) to amend the state constitution to allow the state to impose “guidance” on the growth and development allowed on state (trust) owned lands, including set asides for conservation. It failed in a close vote.

 

In the same election, a citizens initiative Prop 202 which would have imposed a Portland-style “growth boundary” around municipalities above 2,500 and would have required new growth to pay “the full costs of additional public facility needs that will be created by new commercial industrial and subdivision projects unless the project is located within an infill incentive area”[xxxii]. That initiative failed miserably and it marked the high tide of growth management in Arizona. By the turn of the 21^st century, many Arizonians considered commercial and residential real estate development as a “sixth C”, a now traditional growth sector that constituted a core sector in Arizona’s economic base. Responsible growth was one thing, but no-growth was quite another.

 

Hull had inherited a $400 million state deficit, which upon further study threatened to explode to $1 billion in the next year. Hull’s failure to focus on or effectively deal with the chronic fiscal crisis simply did not work and the deficit haunted her throughout her administration. She retained her concerns, smart growth, open space, and above all education, but she seemingly did not recognize the fiscal time bomb confronting her. While applauding growth in a pro-growth state, she largely ignored the traditional ED focus the state had heretofore followed.

 

She did not get in front of brewing “Homeland Security” issues that constantly bubbled up. The chief culprit that brought her down was arguably a 2000 tax credit passed by the state legislature and signed by the governor that exempted 30-50% of a purchase price of a supplemental clean-burning automobile gas tank. Intended to ameliorate Phoenix’s “brown cloud”, the loss of revenues burned clean through the state budget and a boondoggle to even environmental stalwarts.

The state’s financial mess, caused in large measure by passage of more than 120 tax loopholes over the past ten years and a recent program that provided generous tax credits to state residents who bought vehicles that ran on clean-burning fuels. Projected to cost less than $10 million, the program became so popular, it drained the state of nearly $700 million in revenues[xxxiii].

The fiscal situation by 2002 was a crisis. Asking bureaucrats to turn in their cellphones and citizens to raise air conditioner temperatures and lower heating in winter, much like California rolling blackouts, did little to impress. This is a full-scale crisis in Arizona, if not any state. —leading to her abandonment by the Arizona Republican Party and a legacy that motivated Arizona independents (the largest affiliation in the state) to vote Democratic in the 2002 election. Hull stepped aside not running in 2002.

 

Arizona’s Contemporary Era

A remarkable and dominant characteristic of the American ED Contemporary Era was the sheer number of other policy areas that crowded into the agendas of EDOs, municipalities and states. American ED had always been closely linked to other policy areas, transportation, education, and definitely housing and planning. During the Age of Urban Renewal it was sometimes not very hard to think of ED as more housing than economic base. But in the Contemporary Era the varying intensity of a great number of policy area intrusions into ED/CD policy systems and policy-making seemed a qualitative leap from our past. ED/CD was employed as a tool or strategy in other policy areas. Education would embrace STEM, brownfields or cap and trade into environmentalism for example. In one sense, ED seemingly lost its top billing in the agenda, but in other ways it simply was incorporated into other policy areas lock, stock and barrel.

 

A distinguishing characteristic, I think, of the Contemporary Era is a certain “blurring” of policy areas, in Arizona’s case education, both K-12 and higher-ed, and immigration. This blurring is nothing new in the history of American ED, planning, housing, transportation for example have interwoven with ED so completely one wonders where one policy area began and the other left off. Immigration, however, presents another problem. Is it a policy area?  If not, how do we treat its obvious effects on American economic development—for example how can we isolate the evolution of American community development without acknowledging the fundamental impact of population migration and immigration.

 

The “why” outside policy areas have intruded into the Contemporary Era’s theory and practice of American mainstream and community economic development is a complex but important question. Complex means there is no simple, one causal variable or single reason to blame. Important means that I cannot simply ignore the question and must assert (mumble incoherently is my preferred response) at least those factors which have exerted special or intense effects on American economic development. For me the one reason that has almost dominated my History of American State and Local Economic Development is the role that corporate elites have played in the making of both mainstream and community development policy and strategy.

 

In a traditionally closed policy system these elites have played an especially powerful role in transmitting political culture (and change in political culture) into ED/CD policy-making. They have necessarily also conveyed the needs, and the after effects, of change in the structure of American capitalism and change in the local economic base. The change I see in the Contemporary Era, derived from many factors, has been transmitted by business and corporate elites, exercised through simple lobbying, philanthropic giving, formal policy advocacy through EDOs, and cynically through “political giving”.

 

I will argue that a new “corporate Progressivism” has emerged in the Contemporary Era, developing a “Blue State Paradigm” and a “nationalization” of local and state ED—not to mention a consultant/nonprofit/NGO ED/CD complex. The equivalent “Red State Paradigm” is more the simple continuity of what many describe as First and Second Wave traditional, growth-focused and Privatist American ED. Sorry, even in the Bluest of states, the Red State Paradigm coexists with the Blue State Paradigm in the typical hybrid American state and local policy system.

 

The reader will notice an absence of normative concerns (i.e. ideology) in this narrative because I sense that like it or not it cannot be avoided in a system that is capitalist, in a policy area that operates at the nexus of capitalism, growth/decline, and politics. If you do not like that situation, put down this book and take your place on the barricades—otherwise you are a hypocrite.

 

Having tagged a prime actor in why policy areas intrude on each other during the Contemporary Era permit me to also briefly cite a few others. First, please understand an earlier point, policy areas have always intruded on each other—the Contemporary Era is likely no different in degree of policy area intrusion than found in other time periods, rather the configuration of policy areas shift—education for example is critical in both workforce, mainstream ED, but surprisingly less so in community development—at least as I understand it. Community development has moved into new strategies, although they are more political movements or intellectual masturbation than a CD strategy, such as “Two Cities”, the Luxury City, and a obsession with mobile capital and wealth distribution (its absence).

 

Second, the structure of American capitalism has seemingly changed in the last twenty or so years, completing a long trend that began during WWI if not earlier: it has become very concentrated, with national markets giving way to global markets. While there is still something called the competition of elites (think Soros and Koch) the emergence of a national and global corporations has been a mighty factor in the various Ages and Eras of our history. Accompanying that structural change has been a third factor, the change in the gazelle sectors, from industrial corporations to technology and now information-based sectors and industries. Robert Gordon provides a wonderful update to Dr. Markusen’s 1986 book as he demonstrates it matters which sectors are driving growth (and decline) in the American and global economy. The shift in policy areas that occurred after deindustrialization (and the Great Reindustrialization Debate), reflected the shifts from industry to service, from technology to information, and god knows where else. Education owes its accelerated importance to this factor.

 

Finally, population migration and generational cohort change has combined in recent years into a sort of economic and cultural sorting (some would say segregating) of geographies (differentiated by classes, wealth, values, occupations, religions and educational levels), producing in its wake, within each metropolitan area as well as states and regions, a bewildering mixture of distinctive, often competing jurisdictional political cultures and policy systems. Within the policy systems of these “sorted” jurisdictions, the realities of economic (and social) decline have produced their own configurations of culture and policy systems, and often have developed their own commonly-shared ED/CD strategies, policy processes, and hybrid policy systems. The politics and ED/CD of growth is indeed different than that of decline, and during the Contemporary Era that became very evident. So now we talk of coastal elites, Left Coast and Heartland, rural and urban, Rust Belt and the New South, Silicon Valley and the Forgotten Peoples, good jobs and bad jobs. They have replaced ghettoes and slums, central cities and suburbs, and unions and manufacturing.

 

A last issue–Said and done, a “policy area” such as education, economic development, transportation or criminal justice is at root an analytical construct. Each policy area is its own “virtual” 3-D like manifestation that cannot be physically touched, and which disappears once one leaves the classroom or textbook. That the abstractness of a policy area is often lost, or even misperceived in the general public, the electorate and taxpayer—not to mention by the actors within the policy area itself—is really unappreciated by those of us whose professional lives are centered on its boundaries.

 

Policy analysts have been consumed mostly in recent years by measurement of different aspects of policy areas, its performance, and its impact on theoretical constructs such as inequality. These are almost totally ignored in this history—as if the reader hasn’t noticed. Instead, we have viewed economic development, a policy area, as a policy system and focused on those drivers which have caused change in the policy system over periods of time. Immigration, for me, never stood a chance as a policy area; it is a form of population migration and is and has been a driver of ED policy system change. It has also been thought of as a major change-agent in local and state political culture—it obviously plays that role in politics and elections. Since immigration is one of our three drivers of change, I have treated it as its own topic elsewhere. That somewhat impairs our understanding of Arizona’s evolution of ED, although thankfully, it shortens it substantially.

 

Arizona and Immigration

In the Contemporary Era, housing and affordable housing were always constant, the arrival of new mainstream ED strategies such as knowledge-based and innovation ED almost like a Pac-Man ate the whole of the education policy area, environmentalism, often allied with planning and planners, permeated ED/CD and even altered significantly the definition of and priority afforded to economic growth. In the Contemporary Era other policy areas also invaded ED/CD. Identify politics, criminal justice and community policing transformed Contemporary Era community development during the Obama Presidency and after, health care and business climate and concern for the Forgotten People/neglected white lower class entered into workforce, paying the bills ED strategies, and challenged knowledge-based innovation strategy—as well as trade and FDI business investment. In Arizona’s case, the 800-lb policy area intrusion was Hispanic immigration across “the border”.

 

God knows Arizona had been “raining people” for decades, but it might have been something in Y2K that got people thinking about it as a biblical flood, sending many Arizona political leaders to the work shed to build an ark. Immigration around the 21^st century, increasingly with each year, consumed more and more of the oxygen in Arizona politics, and a great deal of the national and academic commentary/ image of the state. As it will be apparent below, immigration increasingly consumed the attention of Arizona’s governors and left a rather complex heritage on the evolution of that office, arguably making it a lightning rod that both diluted the governor’s ability to function effectively in other policy areas, but also fractured the governor’s electoral support. While Governor Hull experienced notable immigration issues, Governor’s Napolitano and Brewer were front and center in the national arena, something that is not necessarily in the Arizona governor’s job description.

 

Arizona was not alone in dealing with immigration, certainly California and Texas faced the onslaught and opportunity it unleashed. Perhaps echoing the real life of Arizona law enforcement’s Wyatt Earp heritage, political players such as Maricopa Sheriff Joe Arpaio became a serious influence in the formation and activities of Arizona’s community development movements. While I chose not to focus on that in this chapter, it would be a huge mistake not to be aware of how immigration and immigrants transformed Arizona’s community development evolution into and during the Contemporary Era.

 

If nothing else, Arizona captured the media vortex and the state’s long-standing political culture fractured into an increasingly polarized set of reactions by two opposing perspectives (one seeing immigration aa a threat to everything near and dear (but not opposed to utilizing it as a cheap workforce)plus some economic opportunity and the other grouping seeing a larger American exceptionalism morality play in which immigrants played a major role (alongside their own use of immigrants for political opportunity)—amidst a huge middle ground of voters and citizens hopelessly adrift and viciously cross-pressured. Not unnoticed, but vastly unappreciated were the immigrant’s  effects of the development, direction and practice of mainstream ED.I n a section below, this chapter will isolate how immigration affected K-12 educational performance, and accordingly policy direction and policy-making, and how that interwove with the evolution of Arizona’s university-driven entrepreneurial state.

 

Immigration, in our model a population migration, is a core dynamic driver of ED/CD policy-making. My history, if little else, summarily asserts that American economic and community development cannot be fundamentally understood without incorporating how it generated and permeated into ED strategies, tools and programs. Nineteenth Century community development owes its existence to immigration, and its great transformation and second wind from the pre-Great Society Ford Foundation “Gray Areas” were studies and experiments on how to cope with Puerto Rican neighborhood change, and juvenile delinquency. Small wonder that the border state of Arizona would see its politics, and to a certain extent its economic development transform when the volume and persistence of immigration simply increased for decades, showing no signs of abatement. Around the turn of the 21^st century one can see the visible impact of immigration in our history.

 

With each governor, and each administration, the impact of immigration permeated nearly every policy area. Economic and community development had to play its part in coping with immigration’s impact. Immigration was simply more than volume of people, it was the demographics and “race” as well. As anti-federal government. ED and CD were tasked to deal with both. The more traditional elements of American ED, especially Mainstream ED, were not displaced—they in fact continued in day-to-day ED to the present day–but headlines and media headlines and academic research shoved it to the sidelines. A bifurcated state ED system sort of crept into place, a highly visible immigration-laced ED and CD set of topics and strategies, and a continued pursuit of long-term Mainstream ED attraction and Recruitment of Target Industries (Technology) involving its associated policy area, education and transportation infrastructures advocated by Republicans, the Phoenix corporate business community and private EDOs.. Out of sight and out of mind, eventually, the latter was “peeled off” and privatized.

 

In this context, yet another Contemporary Era characteristic made its appearance, the narrowing of ED professional specialties/life, the drift to siloization and strategy-based sub-policy whirlpools in the Practitioner World, a generation cohort fusion of Policy and Practitioner Worlds, and the Big Bang-like explosion of macro municipal and state ED-related policy systems/policy-making to include a host of other policy areas in which ED/CD played a role, sometimes a major one. In the latter case, with some many policy area planets in the ED solar system, it was no longer clear what ED was, and what was education policy. The ED policy area evolved much like a grocery store, selling not only groceries, but air conditioners, and clothes, and pharmacies, and Starbucks coffee shops. If interest in only one item, one could bullet into one aisle and be completely unaware and unconcerned with what is in the others.

 

By the time Democrat Janet Napolitano was elected governor in a close (12,000 vote) 2003 election, there was no going back. She faced a horrendous fiscal crisis and a storm on her borders—and a Republican legislature. Whatever else Napolitano was, she was a lawyer, a former Ninth Circuit law clerk, counsel in the Clarence Thomas-Anita Hill Supreme Court Senate approval hearing (worked in an Arizona law firm representing Anita Hill), four years as U.S. Attorney for Arizona, and one term as Arizona Attorney General from which she launched her gubernatorial campaign.

 

Napolitano, born in NYC and raised in New Mexico, Napolitano was appointed by President Clinton to be Arizona’s U.S. Attorney the Anita Hill trial. As a relative newcomer to Arizona, a conservative state with a legislature, controlled by Republicans who tilted toward “alt-right” nativist and libertarian positions, and a weakened Democratic Party, Napolitano shared in the Clinton “Third Way” based on muted partisanship to facilitate compromise and find solutions to acknowledged problems, while pursuing where possible a liberal agenda. This was not unlike the situation or approach Babbitt had followed nearly two decades earlier.

 

As discussed, Governor Napolitano inherited a $1.4 billion deficit, approximately half of which was caused by the infamous Legislature-Hull clean fuel tax credit. That program was quickly terminated and many who thought they qualified for the credit, simply did not get it. Napolitano approached the remaining deficit by pledging no new taxes and she met that promise by instituting an Efficiency Panel that found nearly $850 million cuts and cost savings. She enforced these efficiencies through executive orders, and started using legislative vetoes to keep the Republican legislature in line. In a low tax, small government state like Arizona, the new governor’s solution to the 2003 fiscal crisis was well-received. During these years, she also carved out her “third way” which was based on satisfying leftwing and moderate Democrats by achieving, given the Arizona context, what was possible, “while beating back the hardest right initiatives of the state legislature’s Republican majority … she made real strides in passing progressive policies … co-opt the business community, and pacify the left”.[xxxiv]

 

With no particular interest or interaction with ED or CD, she should not be accused of being an economic developer. While she selected many professionals, some from legal backgrounds, her appointment of Jan Lesher, a VP of Communications/Marketing for the Tucson EDC to head the Arizona Commerce Commission. Lesher followed her to Washington and served as Napolitano’s DHS chief of staff. Also impactful was Markio Silver, from ASU and formerly Columbia University to be her Policy Advisor for Innovation, Higher Education, and Economic Development. Silvers also followed Napolitano to DHS. To be sure, their impact was muted in a turbulent immigration and fiscal environment during her first term. That changed in 2005 as Napolitano geared up for her second term reelection.

 

In her first administration, however, Governor Napolitano’s ED-relevant agenda centered about free trade with Mexico (remember NAFTA was now in effect), and her appointees moved the Arizona-Mexico Commission into deeper relationships and binational activities with Mexico’s neighboring states. In 2003 she urged voters to approve a sales tax to pay for enhanced transportation infrastructure, including the rage of the time, a light rail from Flagstaff to Tucson, and she secured support from the state’s homebuilders association to support a road/highway building program by exempting them from the sales tax. The initiative failed.

 

Not to worry, working with the legislature (desperately trying to repair its “clean fuel tax credit morass”) she signed one of Arizona’s largest business property tax reductions, and also signed a $370 million homeowner/income tax family tax reduction as well. Included in these initiatives were tax incentives to angel investors and tax cuts for high-tech firms that created new jobs. Besides their obvious political popularity, tax cuts and a low-tax business climate was a consistent, bipartisan Arizona ED strategy. That such tax cuts included sectors targeted for ED attraction was to be expected.

 

To make matters better, with the dot-com recession fading into the background, Arizona’s economy (and its tax revenues) were once again in growth mode. While Governor Napolitano developed a serious economic development agenda, it was not her primary priority—that honor belonged to K-12 education and children, in all their aspects, particularly establishing a state Child Protective Services system. In 2003-4, she achieved passage of full day kindergarten (the program was defunded during the Great Recession by the legislature), reforms in early childhood teaching/teachers, $100 million pay raise for teachers balanced by a $5 million voucher system for special-ed students, and child care for low income. In these initiative, Napolitano increased the staffing, involvement and impact of the governor’s office significantly. These were her signature initiatives.

 

While many may see this as a “Democratic” agenda, the emphasis on education in particular was a priority with moderate Republicans and for ED’s perspective the business community. In this respect, in 2005 as Napolitano began to prepare for her 2006 reelection, she ramped up her ED agenda, beginning with reforms advocated by the Greater Phoenix League. With good times rolling, and the 2006 election coming, Governor Napolitano she signed by executive order the Western State Climate Initiative (Jerry Brown’s initiative) and committed Arizona to developing a regional cap-and-trade system for carbon emissions and develop a plan to satisfy 2012 standards.

 

Having said this, Arizona’s traditional Privatist mainstream ED continued during these years. Arizona did not abandon its attraction, targeted industries, low-cost and right to work business climate. Having painted this rosy picture, 2006 was the year Arizona “castrated” its tax increment financing tool. For a time, Arizona would often be cited as the only state without such a financing tool. TIF up to that time was authorized, but remained, with one prominent exception, unused. In 1999, however, the state did adopt TIF legislation, and authorized localities to form TIF districts and TIF-empowered EDOs.

 

Tucson voters quickly approved the formation of a Multipurpose Facilities District (with TIF powers) to lead development of a stadium in downtown Tucson. At that time, the Rio Nuevo Multipurpose Facility District was thought to be the ONLY active TIF district in the state. Between then and 2009 when the state took it over the District approved $300 million of project bonds for an aquarium, science center and Indian village (lovingly called “a hole in the ground by cynical Tucsonans). Its projects went nowhere and the District became the poster child of failed TIF districts). With a new board, the reformed District remains Arizona’s only known TIF district at the time of writing[xxxv]. The state passed legislation in 2006 which effectively “castrated” TIF empowerment, and no new districts were possible after that. Several efforts have been made to bring it back, so far unsuccessfully.

 

Arizona’s Attempt at the Entrepreneurial State

Brewing off in its own obscurity, after our earlier description of Motorola, the GPL and Babbitt’s initial venture into the “entrepreneurial state”, the involved institutions and EDOs jelled into a “policy whirlpool” within the overall state ED system. Whether or not this constituted “university-driven ED” (we suspect it very much was) technology corporate leadership (as individuals and members of EDOs like GPL), technology-based faculty and “entrepreneurs” in their midst, and associated EDOs and a network of nonprofits engaged in their own sub-policy-making to expand upon the whirlpool’s scope and activity level.

 

Targeting high-tech industries by the state Dept. of Commerce (and local EDOs) was a useful but not primary goal of whirlpool actors. Rather they emphasized development of an Arizona home-brew entrepreneurial dynamic, with startups, supportive ecosystem, and commercialization of high-tech innovations. Their concern with and link to, non-university educational actors, however, did not seem a major concern.  Developing that ecosystem however, was proved a difficult task in Arizona. Education, both K-12 and higher-ed, faced a number of obstacles, including a political culture that stressed low taxes and limited government and included a strong nativist tilt.

 

The embryonic university/entrepreneurial ED strategies labored under s serious handicap, a chronic state-level fiscal imbalance/deficit caused by increasing service demands, an ever-enlarging governmental scope, and the state’s cultural default/ED strategy a low tax state that enveloped the university system in actual or potential budget cuts, threatening the viability of these public-private, industry-university ED strategies. In the Napolitano administration, these conflicting pressures and opportunities came to a head.

 

Arizona into the 21^st century still placed among the lowest of American states in nearly all aspects and levels of educational performance—particularly in the number of young completing high school, testing scores in mathematics, and very low rates of entry to college. Celebrating eighth-grade graduation is popular. Partly, low involvement in education was linked to the huge Latino immigration, but the sad reality was that Latinos did not differ radically from the working class Anglo culture. Risk-taking, rural and barrio geographies, abandoning the culture of one’s family, entrepreneurship, and the reality that growth, and much of the “six Cs” Arizona economic base did not require a great deal of education all limited the number of youth who sought and graduated from a four-year college. Solid, if low-paying, hard work jobs were available. Many adults did return later to community colleges, but degree-seeking was restrained.

 

This was the reality that had prompted Motorola and the Arizona high-tech electronics/semi-conductor sectors and the Phoenix-based EDOs, notably the GPL (Greater Phoenix League) to convince Babbitt to prioritize engineering degrees and quality engineering programs—but also to launch broader educational reforms to improve upon Arizona’s inadequate educational performance. Adding high-tech to Arizona’s targeted industries meant that any EDO could not ignore the larger educational issues and high-tech ecosystem. High tech firms were not likely to relocate to an educational desert.

 

So governor after governor, for the most part, each made their attempt to improve upon state educational performance. Some made it a high priority, others less so. In the years after Babbitt, however, the Legislature, at best was inconsistent—at worse was miserly in funding education, and education was the first to feel cutbacks in state budgets, especially in tough times. K-12 education, not just university-level education or even the high-tech ecosystem, became a mainstream ED concern. As described earlier, different policy areas in our Contemporary Era, blurred into the theory and the practice of ED. The litany of educational issues, initiatives, programs and problems (from teacher pay, to low test scores, standards-based curriculum, that affected ED only became longer and longer by the time Napolitano entered the picture.

 

GPL (as well as the Southern Arizona Leadership Council and the Flagstaff Forty) played a major role as education’s advocate, sometimes spokesman, and behind the scene political muscle during these often lean years. The business community was a constant, a pillar of strength. In 2003, GPL issued a report, “P-20: An Approach to Integrated Learning”. The semi-autonomous university system was somewhat insulated from the difficulties of K-12 and its funding was not tied to its success—thereby fostering, and the considerable number of related nonprofit and subsidiary EDOs within its orbit and some level of progress at the university and graduate levels. P-20 was a set of initiatives that “seamlessly linked the preschool and postsecondary education” creating an “integrated learning system” from K-12 to Higher Educations so Arizona could enter and compete with 21^st Century realities and firms. Approached by the GPL-led business alliance, Governor Napolitano “picked it up and ran with it”[xxxvi].  In 2005, Napolitano by executive order created the forty member P-20 Council in the Governor’s Office.

 

She followed up P-20 by establishing with the Dept. of Commerce a pilot program (Arizona Innovation and Technology Commercialization Accelerator) to assist early-stage technology and bioscience firms, and to coordinate (within the university system and its interchange with business) technology commercialization. Specifically, it provided grants to companies for technology assessment, commercialization feasibility, and assistance with marketing and licensing.

 

That initiative was followed by arguably her most successful innovation/technology initiative, importing Ireland’s Science Foundation model she established and funded the Science Foundation Arizona a nonprofit EDO “designed to build and strengthen Arizona’s scientific, engineering and medical competitiveness by attracting world-class researchers to Arizona. The Foundation created a Small Business Catalytic Funding initiative to hopefully promote technology development, company formation, and high-tech job creation. It moved on to set up Strategic Research Groups that funded partnerships between the private sector and universities. Napolitano also led the approval for funding a $440 million research and facilities investment in the state’s colleges and universities. As Chair of the National Governor’s Association she played a prominent role in its 2007 Innovation America initiative. The fact that a Washington Think Tank, the National Center for Public Policy had played a pivotal role in a national campaign of corporate elites to link the various education levels into a seamless system highlights the important of these relatively new player in state, and sub-state ED policy-making.

 

Governor Jan Brewer

An then abruptly, on January 21, 2009, Napolitano resigned her governorship, and did her best Babbitt-imitation by leaving Arizona to be President Obama’s Secretary of Homeland Security—on a reputation built largely on her controversial experience as governor of a border state. She had seemingly angled for a position in DC through the entire campaign, tossing aside her past loyalties to President Clinton in favor of Obama. Leaving Arizona was not an unwitting accident and one wonders what else she tossed aside as the next in line to governor was conservative Republican Jan Brewer (Jane, Janet, Jan?)—so much for the Arizona Democratic Party. It has not returned to power since.

 

The behind the scenes was also complicated. The Great Recession left Arizona in another revenue crisis, which was made somewhat worse by Napolitano’s 2003 papering over an unstable fiscal imbalance, and with good times returning spending more on the increase in state revenues that followed. Relations with the Legislature could be summarized in one statistic, she led the state in number of vetoes (180), far surpassing the second ranking Babbitt. Very popular throughout her administration, the give-and-take that characterized her administration’s Third Way, needed good times, and the goings on at the border down in immigration land polarized the state, leaving her Third Way very unsatisfying. Napolitano left Arizona with the fiscal crisis untouched, while the national economy had yet to start its repair and was still suffering from a Recession not yet corrected. Jan Brewer inherited a deficit of up to $4 billion.

 

Janet Napolitano had been a strong governor, and despite its 2009 nadir, her Third Way had worked remarkably well, with one serious weakness—it had not altered the structural policy configuration nor the fiscal imbalances that characterized Contemporary Era Arizona. The Governor’s office remained personal and was not very much altered by Napolitano, her innovation initiative, like Babbitt’s before, was left to the vicissitudes of the ED policy whirlpool that was the Arizona university system. The Dept. of Commerce, now safely back in conservative hands, reverted back to unmitigated attraction of targeted industries and a woe-be-tide concern for rural development.

 

Jan Brewer’s two initial priorities were to keep Arizona safe and to resolve the deficit without raising taxes. Apparently neither worked out well—and it all came apart quickly, establishing a pattern that would characterize Brewer’s years in the governor’s office: a sort of “conservative Third Way” in which she would use conservative rhetoric while governing and legislating more moderately. By 2015, she had arrived very near the same place as Napolitano in 2009 (i.e. alienating both sides, conservative and progressives, while stumbling through a series of controversial, nationally-publicized events, programs, referendums.

 

She did tackle Arizona’s fiscal structural imbalance within two months of assuming office—by abandoning her early rhetoric and calling for a temporary (3 year-$1 billion annually) state sales tax (to which some Republican legislators walked out of the speech). She won the fight—and voters approved the referendum that followed—a clear victory for what promised to be a strong governor. While not a crippling departure from the low-tax business climate strategy, it acknowledged that the sixth “C” of Arizona’s economic base (commercial and residential construction) had been devastated by the Great Recession. Phoenix, in particular, timesharing, tourism, and residential/commercial construction bubble had been burst and would not recapture its former growth for more than five years. In a national slow-growth, low job-creation economy, Arizona’s growth machine slowed down considerably, and Brewer felt those grounds shift underneath her very early in her administration—and acted to get on top of the situation fiscally.

 

In any case 2009 was a year of steep budget cuts, many of Janet Napolitano’s children and educational successes were nullified by these cuts; despite the sales tax/budget cuts nearly a half-billion dollar deficit remained at the end of the budget year, despite a balanced budget state constitutional requirement. The budgetary process was brutal, a special session, tons of vetoes, considerable drama, stalemate, and bitter divisiveness within the Republican Party/Legislature—and the conservative national media. Years of relying on the proceeds of new growth came to a screeching halt, and programs such as Medicaid and a new Obamacare Health care legislation that would follow in 2010, with continued slow recovery from the 2008-2009 Recession meant that for two full years, Brewer’s primary agenda was fiscal and budgetary survival.

 

In opposition to many in her party, she would successfully lead Arizona into Obamacare (which she opposed) and expanded Arizona’s Medicaid program to garner new federal funds because in her judgment there were no other funds available to finance health care. In 2010, privatization, first in prisons, and then in economic development also reflected desperation caused by the fiscal crisis (see ED privatization below). By the end of 2010, she had sharply reduced the scope of state activities and noticeably lowered state expenditures. She had lived up to her first priority as she successfully protected police/criminal justice and K-12/higher education spending from budget cuts.

 

2010 was a banner year, because in April, the legislature approved the Support our Law Enforcement and Safe Neighborhoods Act making it a crime for illegals not to have an alien registration certification, and empowered police to stop and question those who, in police view, might be in violation. A second legislative bill effectively legalized racial profiling, and so Sheriff Joe Arpaio and Arizona were in national headlines, and Brewer, allegedly his “friend”, signed both bills. Demonstrations and media headlines took over after that. In June she met with Obama and engaged in a “finger pointing” verbal discussion on the airport tarmac regarding federal implementation of immigration law and programs. On top of all this, the reader might be sensitive to another reality, Brewer was running in a primary for her eventual renomination for election to governor in November of that year. This is the year upon the recommendation of a2009 task force chaired by developer and investor Jerry Colangelo she created by executive order the Arizona Commerce Authority (ACA). While no specific funds were allocated in the budget, $10 million of federal stimulus funds were transferred to ACA. In 2011, ACA took over Arizona’s state ED lead (see below).  Arizona’s economic development. Needless to say, the national controversy was felt to disadvantage the desperately needed tourism and business promotional efforts of local, and state economic developers.

 

In a tough election, she beat a formidable Democrat Mayor of Phoenix 55% to 42%. Her election, however, seemingly meant that this was her second, and last term in office. She fought her lame duck status for several years, eventually conceding that the courts would not accept her interpretation of a constitutional statute that was intended to limit earlier abuses (six term Governor Williams).

 

In 2011 she signed legislation allowing Arizona to join in construction a border “fence”. .In 2012 she faced a major ED-related brouhaha with the Legislature. The Sagebrush Rebellion bubbled up yet again—as it did in other western states in this year. The legislature, prodded in its view by an aggressive rule-making Obama administration, approved legislation demanding/requiring the federal government turn over to Arizona 25 million acres of public land by 2014—or it would sue. The bill exempted Indian reservations, national parks, and military installations (Utah passed somewhat similar legislation also). Although it was expected that Brewer would sign the bill, she instead vetoed it. She feared economic loss by those with existing public land leases, and no doubt was very reluctant to enter into a full-fledged war with the federal government.

 

The matter, amended to taking over the Grand Canyon area, and asserting state sovereignty over air water, public lands, minerals, wild life, and other natural resources” went to referendum (Prop 120) in November of that year. Brewer’s position was sustained handily (68%) by the voters. The legislature, however, remained fully engaged in the Sagebrush War contest with the federal government.

 

Energy and solar

 

Privatization of Arizona Economic Development

Immediately after the Great Recession (post-2009) a swell of state “privatization” initiatives swept across the nation. Depending how one labels “privatization”, or what used to be called public private partnership, at least ten states during the years through 2013 formally adopted some version of formally, and structurally, turning over state-level ED administration, direction, and a great deal of governance to the private sector. Not surprisingly, this was principally a Red State movement (Rhode Island being the most obvious exception). Arizona was one.

 

The Arizona initiative was Brewer-led and a conscious plank in her administration’s platform. Coming to office in 2009 she appointed a task force chaired by Republican businessman, campaign contributor, a local icon, former owner of the Phoenix Sun (and its stadium), and after 2004 a developer whose projects transformed the Phoenix downtown—and metro area. The task force was entrusted with preparation of a report to revamp, reform, or prepare proposals to correct what was then perceived as an ineffectual Dept. of Commerce.

 

The Dept. of Commerce was not only the lead Arizona EDO, it was one of the very few public EDOs in the state, a state which as we noted earlier, was populated by a EDOs such as commissions, authorities, and other hybrids in which private sector representation and policy impact was shared between public and private board members, and included representatives of the state legislature. If it was anything, the Dept. of Commerce was seen as the governor’s territory, and as such it shared in and suffered from the rather uneven fortunes of Arizona governors, and their equally uneven relations with the legislature. The Phoenix Business Journal summarized the motives behind privatization as an effort to “kick start” the local and state economy, but more importantly to create a “more coordinated” ED program:

The department with its budget stripped its focus divided, and a succession of directors changing with administrations, wasn’t operating well … it wasn’t what the business community wanted[xxxvii].

Whether there was any hidden agenda that underscored the task force is unknown to me, and my research did not find anything significant, it may be suspected that in the immediate aftermath of the Great Recession and the collapse of Arizona’s local economic bases—and state tax receipts—the added prioritization afforded to ED, and the desire to reduce its budgetary impact were also important considerations in the national movement, and certainly in Arizona’s. It is believed that the Texas model was important in deciding upon the EDO structure. Texas has a “Team AZ”-like vehicle (TexasOne) and the EDO it is strongly linked to the governor, rather than legislature. The $25 million annual deal-fund resembles the Texas Emerging Technology Fund structure[xxxviii]. In retrospect (2015), Brewer injected yet another consideration: a need to make Arizona’s corporate incentives more effective. Acknowledging that “Arizona does not have the resources to compete” in the only state incentive competition, she added:

I was well aware that economic incentives are important, and are sometimes viewed as corporate welfare, [so] I made sure that whatever funds were to be handed out, were only to be handed out when a company fulfilled its promise”[xxxix]

Accordingly, included in the 2011 legislation that followed, incentives were tied to negotiated milestones or benchmarks and were paid out only to reimburse proven expenditures or accomplished objectives. This frugality is consistent with the long-term Arizona incentive culture, and in my opinion, was probably an element in the privatization initiative. If so, our analysis strongly suggests the Great Recession certainly created the more or less universal need to upgrade state ED priority, in Arizona’s case at least there was a genuine concern to make ED more effective and coordinated and in a Red State that meant intensifying private sector involvement and expertise into its policy and administration. One might also believe that the private sector’s willingness to “pay to play” meant a few bucks could be saved in a very tense budgetary atmosphere.

 

The final report, delivered in 2010, recommended elimination of the Dept. of Commerce and replacing it with the quasi-public authority. Brewer accepted the report and a month later by executive order appointed Colangelo chair and created the ACA. In 2011, the legislature approved the Economic Competitiveness Act (HB 2815) to encourage investment in small businesses aid startup companies, incentive the location of corporate headquarters in Arizona and generally spur job growth. Also included in the legislation was reformulated incentives targeted to industries/companies as determined by ACA. As authorized by the legislature, the ACA was composed of a voting board of nine directors including a private co-chair, appointed by the governor, who is the co-chair of the Authority and seven  appointees of the House Speaker and Senate President who also sit on the vote as two of twelve non-voting board members drawn from the legislature, universities, and state entities.

 

The legislation increased ACA’s budget to $10 million (a 64% increase from Dept. of Commerce), and allocated additional millions, including a $25 million “deal-closing fund” to the agency and authorized its board-appointed CEO to “write checks to companies willing to locate to the state”. Clawbacks and third-party evaluation performance evaluations, and a private audit were stipulated. Several special exemptions for fiscal reporting/audit, use of executive session in decision-making, lack of public hearing requirement, and entrusting CEO with absolute power to write checks for the deal-making fund were included in the legislation.

 

The legislation also streamlined Commerce Department’s programs to focus ACA on attraction and creating new jobs. Many programs were eliminated, including efficiency/renewable energy programs discussed above, the state’s rural ED initiative, the Main Street program, and several “state entrepreneurial” university-technology initiatives. The angel investor tax credit was extended to 2016. The legislation did, however, increase the state’s R&D tax credit and provided tax exemptions to small business. Make no mistake, however, ACA was in the attraction business, and compared to the past was incredibly well-funded. The 2011 legislation was a major reorganization and reprogramming of Arizona’s state ED system.

 

Right out of the starting gate, however, stuff happened. ACA hired Brewer’s Dept. of Commerce director who had past business connections with Colangelo and others on, the Board) and signed him to a $1 million annual contract (he was previously paid $183,000). Both Republican and Democratic legislators vociferously complained and Colangelo announced the private sector would pay half the CEO’s salary through a related nonprofit foundation they had established: a foundation called “Team ACA”, ACA’s intended “investment arm”. The foundation’s existence opened up a Pandora’s Box of questions, ranging from who was on its board, how was it getting its money, and who was giving what? The resulting disclosures revealed a robust funding by Team ACA of ACA activities (including nearly $10k to purchase business class air travel for the governor on an ED mission abroad)[xl].

 

None of the contributions were illegal or improper per se (PIRG admitted there was no signs of malfeasance), but they were sizeable. No public funds had crossed over into Team ACA. Also revealed was a set of contributors that included some of the more powerful businesses in the state. Team ACA refused, however to disclose all its investors. Obtaining copies of its submitted tax forms was not easily accomplished. The controversy, however, was enough for the CEO and he quit ACA, but stayed on with Team ACA. Still when a bill to increase ACA transparency (and require audit by the state’s auditor general) in the House, it got nowhere.

 

It was clear the private sector had established a nonprofit foundation to receive business contributions intended for ACA. That foundation was autonomous of ACA, despite overlaps of board, and not transparent. ACA did little to rectify the information vacuum. If nothing else the perception of conflict of interest would be chronic unless some transparency was created. Indeed, once tax credits or abatements to firms were made, a defense against conflicts of interest and worse could not be made. As late as 2013, after ACA claimed involvement in 104 projects up to that point, transparency was better, but still incomplete. What is the reader to make of this?

 

The post Great Recession unleashed a wave of state ED privatism and privatization that was extremely unpopular in some quarters—and not without reason. There was no way academics and Policy World actors whose ideology leaned Progressive and/or pro-union, distrustful of capitalism, business and the motivations/mechanizations of their corporate leaders, were going to view privatization as anything but an unmitigated disaster. Good Jobs First, as all know, took the lead on this topic. In a 2013 update of its initial 2011Report, they scathingly observed:

[E]xperiments in privatization have, by and large, become costly failures characterized by misuse of taxpayer funds, conflicts of interest, excessive pay and bonuses, questionable subsidy awards, lack of public disclosure of key records, and resistance to basic oversight. Things have gotten demonstrably worse in the past three years. We conclude that privatizing a state development agency is an inherently corrupting move that states should avoid or repeal. Taxpayers are best served by experienced public-agency employees who are fully covered by ethics and conflicts laws, open records acts, and oversight by auditors and legislators[xli].

Perhaps surprisingly, I agree with many of their concerns; several “scandals” are well-documented will be discussed in a specialized topic section relevant to the “general” post-Great Recession privatization movement. I disagree that economic development is best handled only by public governmental EDOs. That they are vulnerable to their own set of conflicts and scandals is indisputable. In our Arizona case study, however, I respectfully observe that Brewer’s privatization initiative sourced from many legitimate and honorable motivations, reflected the state’s long-standing Privatist inclusion of the private sector into ED policy-making and administration, and in general is congruent with Privatist traditions within American economic development.

 

Public private partnerships, First and Second Wave EDOs, and the two century struggle to combine private expertise with public powers and resources into an effective—honest and transparent—hybrid EDO structure has been a struggle—a struggle that crosses over the fault line between Privatism and Progressivism, and is an inevitable “cost” associated with the profession’s and policy area’s overlap with a capitalist economy. Privatization of economic development, as this book contends, is not inherently wrong, corrupt, or illegitimate. Just the opposite, such a strategy represents a needed and legitimate attempt to link private expertise and resources with public powers and resources to tackle legitimate ED goals through strategies like infrastructure, attraction and retention, city-building and a host of strategies, tools and programs that assist firms in jurisdiction’s economic base to cope with the vicissitudes of the industry/ sector profit life cycle and the three competitive hierarchies.

 

That said, public private partnerships, crossing controversial political and cultural fault lines should acknowledge that each partner in the relationship recognize that to be sustainable and effective, to be perceived as open and honest in its transactions, should develop procedures and practices to establish transparency of its funding, finances, and the basis on which it makes decisions. Ethical and conflict of interest safeguards to confront the realities inherent in these partnerships (and related entities), should be a prime concern, amply documented and safeguarded by the selection of business and political board members who themselves are guided by these principles.

 

In public-private partnerships, common sense not power or wealth should guide transparency. If the parties cannot play by these rules, the partnership is likely to be troubled, and over time likely to fail. Business leaders in such a partnership are not free to carry over free-wheeling, personalistic decision-making or assume it should be treated as individual privacy. Businesspeople in a hybrid EDO ought to recognize they are not only working “with” the public sector, but “for” the public sector. Political participants in such a partnership, ought to know that such partnerships serve to “insulate” economic development decisions from politics and electoral opportunism—their conflicts are more subtle, and frankly require a higher degree of integrity. With nearly twenty years as CEO of a major hybrid EDO, the author is neither naïve nor an idealist, but these partnerships can achieve their objectives only to the extent they make a credible and sincere effort to be ethical and transparent. ACA and Team ACA through 2013 operated at the borders of that credibility.

 

Since that time the ACA has expanded its mission to include more “entrepreneurial programs that “create” firms and jobs (innovation, venture capital, SBIR, film-making, international attraction, and rural attraction sites), and to “grow jobs” through expansion of existing firms. A professional five-year plan was adopted which target industries (no radical departure from Arizona’s pre-ACA targets). Governor Brewer accordingly expanded state funding and allowed ACA to manage additional funds (including receipts from a new job training tax) so that by the time she left (January, 2015) ACA handled well in excess of over $100 million. What happened was that ACA did not use the much of the proceeds from the deal-making fund and it accumulated over the years as each year brought in yet a new increment. During her administration the Board and CEO strengthened ACA’s ethical and financial transparency and project reporting—but not that of Team ACA[xlii]. Public scrutiny endured. During Brewer’s tenure legislative leaders, fiscal conservatives to be sure, felt increasingly isolated from ACA, and unsure of its use of incentives. In 2014 Co-Chair Colangelo acknowledged that Team ACA had not been particularly successful in raising private funds for ACA, which had compelled greater public funding to operate the agency. He said that Team ACA was being dissolved—but no evidence was provided.

 

With Governor Brewer’s retirement, and the election of Governor Doug Ducey (see below), the ACA steamroller was checked. Wasting no time, Governor Ducey, a limited government, low tax conservative former Coldstream Creamery CEO reined in ACA with the support of legislative leaders. ACA’s idle cash was too tempting when Ducey encountered another budget deficit of $1.5 billion in 2015. In 2015, ACA “gave back” over $100 million in funds it administered to address state budget needs, and it lost control over the job training tax proceeds (indeed the tax was to be eliminated by 2016). Both the governor and legislature shifted to a more personalistic gubernatorial led attraction program (one in which he took credit for a 2015 $2 billion dollar Apple “command center” investment in Mesa that was announced in 2013). The Apple “cash” incentive was funded by special legislation, which also included special tax breaks for Apple. At that press conference the governor’s chief of staff was quoted as saying” this is not a governor that is going to outsource economic development to anybody. He’s going to be hands-on and very involved”[xliii]. Co-Chair Colangelo subsequently retired and was replaced by a university president. In 2016, ACA recruited Caterpillar to develop a $600 million executive office, 600 jobs, $50 million incentive in Tucson (ACA’s partner being the aforementioned Rio Nuevo Multipurpose Facility District)[xliv].

 

Governor Doug Ducey

Ducey, former CEO of Coldstream Creamery, member of GPL, and in his first elective adventure got himself elected as state Treasurer—from which he won the Republican nomination and the governor’s office decisively (53%) in the November 2014 election. Endorsed by the Republican establishment he seemed an orthodox conservative tending to moderate on social issues (women, LBGT) but as a Catholic pro-life. He has proven to be a reasonably consistent Republican, supporting Trump, opposing Obamacare

 

True to form he inherited a state in fiscal crisis, a deficit whose estimates ranged from $1 billion to $1.4. The 2015 budget was by most standards a disaster—cuts were made, heavily, in TANF that were so severe AZ, already among the nation’s most frugal, to the very bottom ranked in the nation. The cuts were largely to be reversed in proposed 2017 legislation, however, with the governing noting the budget crisis had been averted and monies were now available to “stop the cycle of poverty”.

 

Despite the “lead-in” to Governor Ducey, provided in our discussion of ACA and the privatization of Arizona ED, education, arguably, K-12, has been his signature initiative. That has dominated his state of the states for two years, and in 2017 resulted in serious efforts to tackle that longstanding troubled policy area so important to business and parents. His staunch support in 2016 for Prop 123 improved education funding from the state’s Land Trust and over a ten year period could provide an extra $3.5 billion to schools. His economic development record is also moderate, and his role seems more active than Brewer’s and as indicated he has reined in ACA and replaced Colangelo who under her administration was the seeming Czar of Arizona ED.

 

He has endorsed the traditional low-cost, low regulation approach and has made it a cornerstone. He stressed tax cuts each year and made a big deal of state bureaucratic cutbacks and job reductions. He has taken considerable pride in each attraction and expansion “victory” that ACA can take credit for, He signed a $1 billion authorization to expand the university system in 2017, and three other bills that provided tax exemptions or credits to small businesses and extended a large corporation tax credit until 2025. He vetoed the hot new ED strategy, marijuana legalization, however—rejecting the idea of a marijuana industry cluster. Whatever else, he could not be mistaken for Jerry Brown, having indicated in a state of the state speech that Arizona ED was in effect “living off California’s nutty ideas”. While the growing Hispanic electoral base is likely giving Republicans sleepless nights he signed legislation requiring high school students to pass a U.S. citizenship test., the border in an era of Trump has been relatively quiet, without disruptive events that plagued Hull, Napolitano and Brewer. In 20017 Sheriff Joe Arpaio was convicted and sentenced to two years in jail.

 

Summary

Political parties appear to be very weak in AZ. Nobody born here syndrome creates a personalistic and populist tilt to elections. The last governor that served two full four years terms was Babbitt in 1987 (30 years ago). No one has done it in the Contemporary Era—that means AZ has not been able to develop a “gubernatorial administration” and combined with, perhaps resulting from a weak structurally office, populated by unwilling Secretary of State or mavericks and populists who often tilt, rather than work with the legislature, has impacted its ED bureaucracies, already hybrid and separate whirlpools have developed, especially when out of the policy agenda. The Brewer privatization reflects an “outsourcing” of ED to the private sector which has been a pronounced default. The legislature had its own ED priorities and continually injected its own legislation and tilted the operations of state EDOs. This is the bastion of traditional Privatism, rural versus Phoenix and cutbacks of education/higher education. The Sagebrush War episodes, even Symington’s, were heavily impacted by the legislature as was TIF and the horrendous clean fuels tax credits episode.

 

In the thirty years since 1987 Democrats have been governor only nine years—three of which resulted from a Republican governor’s resignation, leaving Napolitano as the only Democrat elected since 1987. From 1996 to the present both chambers have been Republican. In 2017, forty percent are women, the third-highest (in number of legislators) in the nation. To this could be added seventeen straight years of solid management by women governors (1997-2014). In a state during the Contemporary Era which was seriously buffeted and its political culture threatened by a wide variety of social and identity issues, immigration and border concerns, a troubled and underfunded educational system, the former high priority of ED in the state’s policy agenda was markedly reduced, although a number of ED concerns, mostly negative effects on the economy and its business were impactful in decisions across a spectrum of policy areas. The state, it cannot be denied, took a step in mainstream ED through privatization. This was not out of character with the state’s long-standing tradition of shared public-private decentralization in ED.

 

The constant fiscal theme is serious deficits. Like California, but for different reasons, the state is in constant, if spasmodic budget crisis, which are resolved through service cutbacks and the aversion to increased taxes. Funding education at all levels has been a challenge in Arizona, despite the fact AZ governors in general have been strong proponents of increased education spending, and profoundly concerned with performance. The corporate business community is the leader for increased education spending. The Great Recession hit Phoenix and tourism and an ED strategy dependent on attraction very hard. The area was not used to recession, and that made its impact likely more disruptive—as did the increasing Hispanic population base that was likely severely affected.

 

The political culture is different than California, despite an equally huge Hispanic electoral base. In 2016 Arizona’s Hispanic population is sixth largest in nation (2.1 mm, and its 31% of the electorate is fourth largest in the nation and they are 22% of the eligible voters which is the nation’s fourth largest share (New Mexico = 40%). Compared to 81% of whites only 48% of Hispanics are eligible. Overwhelmingly natural born (92%), naturalized Hispanics are only 8%. They are below 45 (over 60%) http://www.pewhispanic.org/fact-sheet/latinos-in-the-2016-election-arizona/ In the past three presidential elections less than half of Hispanic eligible voters actually voted. Post-election analysis by AZ Central suggests Clinton got 80%, and Maricopa County is heading blue in Presidential elections at least. Turnout overall increased from 2012’s 53% to 2016 56%. It is not clear what Hispanic turnout was

http://www.azcentral.com/story/opinion/op-ed/2016/11/26/exit-polls-wrong-latino-voters-arizona/94288570/  How all this carries over to state and local elections is anyone’s guess at this point.

 

 

 

An interesting thought: judging by its long-term assessment the business climate and low tax and regulation when combined with the structural fiscal imbalance and the low level of services, and general weakness of the state bureaucracy suggest that it is meant not to generate tax receipts, despite its rhetoric, but simple growth and the resulting prosperity of its six C’s. AZ is opposite from California whose growth subsidizes a large state apparatus and increased spending—in the contemporary era which has with Brown and Arnold gone off on a Progressive binge.

[i] David Berman, Arizona Politics and Government: the Quest for Autonomy, Democracy, and Development (Lincoln, University of Nebraska Press, 1998), p. 2.

[ii] As the reader anticipates, such a strict provision invites bypass and reinterpretation by state courts. Early on the state courts allowed expenditures that benefited individuals and corporations as long as it served “a public purpose”.  As “the motivating and animating cause of the transaction”—inviting George Will’s  attack on a 2008 City/North urban village project including Bloomingdale and Nordstrom (San Diego Times Union, March 16, 2008). In mid-1980,in the Wistuber decision, the Court added a second requirement that “consideration” to the public entity must also derive from the expenditure. Until 2010 economic developers could engage in their usual shady practices so long as they were defensible against these two strictures. In 2010, that City/North case reached the state Supreme Court (Turken v. Gordon (the mayor of Phoenix). The decision was dramatic, with a serious consequence on post Great Recession Arizona economic development. Leaving the public purpose stricture intact, the definition of “consideration” was narrow to include only direct benefits to the public entity. The deal with City/North was allowed to stand, but future deals were subject to the decision. See William Bock, General Counsel League of Arizona Cities and Towns, Monthly Newsletter, Issue 129, January 2014. While this does not nullify concerns expressed by some such as Briffault, the old gift and loans clause still affect contemporary ED.

[iii] Gabriela Rico, Caterpillar-to-Tucson deal was months in the making, Arizona Daily Star, May 3, 2016

[iv] David Berman, Arizona Politics and Government: the Quest for Autonomy, Democracy, and Development (Lincoln, University of Nebraska Press, 1998), p.50.

[v] David Berman, Arizona Politics and Government: the Quest for Autonomy, Democracy, and Development (Lincoln, University of Nebraska Press, 1998), p.56.

[vi] David Berman, Arizona Politics and Government, op. cit., p. 57.

[vii] David Berman, Arizona Politics and Government, op. cit., p. 111.

[viii] David Berman, Arizona Politics and Government, op. cit., p. 114.

[ix] See Coan, As Two Ships, pp. 372-7.

[x] Larry Landry, Arizona, in in R. Scott Fosler the New Economic Role of American States, op. cit., p. 252.

[xi] Larry Landry, Arizona, in in R. Scott Fosler the New Economic Role of American States, op. cit., pp. 252-3.

[xii] David Osborne, Laboratories of Democracy.  p. 125-7.

[xiii] Coan, As Two Ships, pp. 564-5.

[xiv] David Osborne, Laboratories of Democracy, op. cit., p. 135; see Landry in Fosler, pp.259-62 for a detailed description of the initiative..

[xv] David Osborne, Laboratories of Democracy, op. cit., pp. 135-6.

[xvi] David Osborne, Laboratories of Democracy, op. cit., p. 136.

[xvii] David Osborne, Laboratories of Democracy, op. cit., p. 137; Landry describes this department in his article, Arizona, in in R. Scott Fosler the New Economic Role of American States, op. cit., p. 255.

[xviii] Larry Landry, Arizona, in in R. Scott Fosler the New Economic Role of American States, op. cit., p. 255.

[xix] Landry and OEPAD produced a study, “Opportunities in Arizona for Suppliers of High Technology Manufacturers”. It identified sixteen different opportunities for suppliers of high technology.

[xx] Landry describes in detail his 1984 Arizona Horizons, which was a follow up to the 1983 MCC debacle.  on

[xxi] Larry Landry, Arizona, in in R. Scott Fosler the New Economic Role of American States, op. cit., p. 257.

[xxii] Larry Landry, Arizona, in in R. Scott Fosler the New Economic Role of American States, op. cit., p. 267.

[xxiii] David Berman, Arizona Politics and Government, op. cit., p. 163.

[xxiv] David Berman, Arizona Politics and Government, op. cit., pp. 163-4; Many Arizonians did not support Symington’s position, and the Land Dept. which has other vital responsibilities, has often been attacked for deals advantageous to private development, and several Arizona initiatives to expand the scope of the Land Dept. have been rejected by voters. Berman claimed at the time Arizona grazing fees imposed by the Dept. were the lowest in the West (p. 164).

[xxv] David Berman, Arizona Politics and Government, op. cit., pp. 171-4.

[xxvi] Population Reference Bureau, http://www.prb.org/Publications/Articles/2010/usarizonalatinos.aspx

[xxvii] As a bit of personal disclosure, I was once unsuccessfully sued by a New York Tribe for actions undertaken by a Western New York EDO of which I was CEO for personal liability. As testimony to the complexity, my personal lawyer, future Governor  Elliott Spitzer, then state Attorney General, was required to assume the responsibility due to the obligations created by an 19^th century treaty with the Tribe.

[xxviii] See http://www.ongd.navajo-nsn.gov/LGA which provides the present chapter/Tribal status.

[xxix] David Berman, Arizona Politics and Government, op. cit., pp. 186-91.

[xxx] http://www.srpmic-nsn.gov/government/cra/gaminghistory.asp

[xxxi] Sara Moya, Alvin Mushkatel, and Connie Padian, “Growth in Arizona” in Zachary Smith (Ed), Politics and Public Policy in Arizona, 3^rd Ed (Praeger, Westport, CT, 2002), pp. 201-3.

[xxxii] Sara Moya, Alvin Mushkatel, and Connie Padian, “Growth in Arizona” in Zachary Smith (Ed), Politics and Public Policy in Arizona, 3^rd Ed (Praeger, Westport, CT, 2002), pp. 202-3.

[xxxiii] Michael Janofsky, “For Arizona Democrats are Rare Air of Optimism”, New York Times,, Sept 9 2002,

[xxxiv] Dana Goldstein, “Janet Napolitano and the New Third Way”, Interview with Janet Napolitano, the Prospect, June 20, 2008.

[xxxv] http://www.aaed.com/news/310844/A-Case-Study-on-the-Impact-of-TIF-Districts-.htm

[xxxvi] Nancy Shulock, “Arizona’s P-20 Council”, pp. 57-61, in Patrick Callan et al,  States, Schools and Colleges: Policies to Improve Student Readiness for College and Strengthen Coordination between Schools and Colleges,  National Center Report #09-2, National Center for Public Policy and Higher Education, November 2009. P-20 (more precisely P-16) is a national program advocated by the Center and has been employed in very many states in some form. The Report includes cases studies of Arizona, Kentucky and Rhode Island and analysis incorporating the experience of other states.

[xxxvii] Phoenix Business Journal, “Jan Brewer: Beater Had to be Done”, May 5, 2015

[xxxviii] Emily Gersema Goldwater Institute Report, posted on March 20, 2014

[xxxix] Phoenix Business Journal, “Jan Brewer: Beater Had to be Done”, May 5, 2015

[xl] Nicholas Kusnetz, State pro-business organizations are publically-funded but privately-controlled, Center for Public Integrity, May 19, 2014

[xli] Press Release, Greg LeRoy et al, Creating Scandals Instead of Jobs: the Failures of Privatized State Economic Development Agencies, Good Jobs first (Washington D.C., October 2013).

[xlii] https://www.publicintegrity.org/2013/10/23/13577/who-funds-shadowy-nonprofit-behind-arizona-s-economic-development-initiatives

[xliii] http://www.azcentral.com/story/money/business/2015/03/20/commerce-authority-scaled-back-ducey/25117629/

[xliv] Gabriela Rico, Caterpillar-to-Tucson deal was months in the making, Arizona Daily Star, May 3, 2016