Ted Simons: Last month Governor Brewer proposed a series of tax cuts and incentives aimed at growing jobs and improving Arizona’s economy. Here to talk about the governor's plan is Don Cardon, president and CEO of the new Arizona commerce authority, which replaces what was the state department of commerce. Good to see you again. Thanks for joining us.
Don Cardon: You too Ted. Thanks for letting me come on.
Ted Simons: Real quickly, for those who aren't up to speed on this, I think most of us probably aren't, what is the Arizona commerce authority?
Don Cardon: In essence, right now it's the same thing as the department of commerce. In statute, the department of commerce still exists, the governor by executive order is changing it to the Arizona commerce authority, it's not just a name change, though, it's substantive in the sense that what we're trying to do, what the governor is proposing is take -- totally taking the department of commerce, which has been in existence for many years, and repealing all of it. Repealing the 58 state statutes and mandates is what we call them, repealing even down to the employees, repealing the really the commission that it has right now and saying, replacing it with the Arizona commerce authority, a privatized approach that we believe is very much different than what's been done over the last few decades.
Ted Simons: It seems like competition increasing Arizona's competitive profile is job number one. Talk about the plan. Talk about the ideas.
Don Cardon: Well, in a big sense what we're really trying to do is we're trying to find a balance for first of all, what level should the government be involved, in terms of advancing a state's economic position. We believe there is a role, we don't believe that it should be the hope of our future for surely not that, but there is a role, so what we believe is that if we move to the assets and the capacities that are existing within the private sector, it allows us to minimize right now a year and a half ago when I asked -- was appointed to this position, we took an agency that was roughly 130 full-time employees, we're proposing to bring it down to in the 40 range, but we're specifically saying it's not just a reduction although that's very important as we're trying to take care of resources that are very limited, our hope is really to engage the private sector. The board is led by Mr. Barrett and Dr. Crow, there's a host of people who are very influential and knowledgeable about this world, and business in it, but what we're specifically trying to do is say, let's get focused on how this state globally competes. Focused in terms of not just organizationally, that's a tool to deliver the future of our state. But what is the state? How does the globe view Arizona? So we've created in essence a focus of four areas, and we said that really right now we can globally compete at a top tier level in science technology and aerospace and defense and renewable energy, and uniquely I believe domestically and small business and entrepreneurship. Arizona is not just that you throw in small business and say, OK, you have to say that because you're trying for these big jobs, but politically you've got to say the small -- it's not it at all. Arizona has an opportunity for people to come into Arizona and do a small business start-up, unlike many, many states if not -- the majority of states in this country. It's very open in terms of what you can come in and do. And we want to try to expand that. But we're going to do it privately.
Ted Simons: I see a lot of the ideas here involving your tax credits or tax cuts. These sorts of things. We had democrats on last night, and they were very upset about the idea, there's no money for transplants. And the governor's office says we'd love to have -- to get those transplants. We don't simply have the money for everything we want. This sounds like a lot of things most people would want. Where are we going to get the money for this?
Don Cardon: First of all, the governor is going to address many of those, and I want to honor her by letting her address that in her state of the state. But I can tell you there's parameters that say, Don, whatever we do, we can't go to a taxation situation to try to tax to make this thing work. We have to do -- I'm born in the woods and stuff, up in Northwest, it's like, you eat what you kill. We need to try and drive the financial resources out of our expanding marketplace, we believe we can create, we need to integrate the private sector to help that process. We're not really looking to the private sector fiscally to write checks in, although APS has graciously said we would be honored to do that. We're trying to activate the talent in those agencies. Back to -- those companies. Back to your question, we're looking at something that is born out of potentially payroll withholdings, from core businesses that are the four areas I mentioned, really the three, not necessarily small business, but those large core base industries, the incremental growth that goes forward that we would take a portion of that to help fund an every-increasing desire to expand and compete globally. But it would be capped, and it would be not a tax deal. We're not looking to the general fund and saying we need some of that, give it to us.
Ted Simons: I know as well you've been quoted as saying the Universities could play a very big part in something like this. And obviously as a team effort and it's a collective effort, but science foundation of Arizona, which a lot of folks see it doing a lot of good, has been targeted by some of the legislature. Universities have been targeted by some of the legislature. How are you going to get lawmakers, movers, shakers, all of them, together to move the ship forward?
Don Cardon: Well, the first thing that I'm going to do is try to focus on what I believe that I have been commissioned to do, which is stay on point about jobs and the economy. You've got a legislative body that -- especially in the recent elections, most of those legislators are there because they're on an economic platform. They know that jobs is number one right now. But I also know that you never ask people that have been elected to represent to do stupid things. We're not going to come forward and try and say, I don't believe the governor doesn't believe fundamentally we succeed through cash and through resources. If I want to, and I'm going to use this example because one of the big components of the privatization is instead of looking to the fiscal opportunities of these private companies could do, I'm saying to Roy, if you were to give me $50,000 to help us advance the state globally, or give me access to your top-tier international executives for three weeks, which one do I want? I take those three weeks every day and Friday. You're going to see us try to activate, we have a paradigm, unfortunately within the elected body, that everything is about money. And I understand that. I'm not naive. But we have to shift and say, there's other assets that are non-fiscal. In order for us to compete, we need talent that I can't afford, this state can't afford. You could go to a variety of companies that these CEOs represent on our board. We can't afford the talent they have, we can't afford the experience that they have. And to be able to access that, what if we say, Roy, give me your top international people to help us do a strategy in Beijing or Shanghai, and you give us three weeks, you come in, and instead of Don Cardon learning a few buzz words about renewable energy and acting like I'm an expert, how about we get true experts to say, if you really want to do it this, is what I would do? And if the state gives them a charitable contribution credit and says, this doesn't equal the scales, but we can create a F 01C 3 to privatize and give you a charitable contribution credit. It doesn't cost the state anything. But we've just engaged the private sector not out of a checkbook, but out of their talent.
Ted Simons: What are you hearing from the legislature as far as, I'm guessing there are going to be a lot of competing ideas in the legislature next session. They will be similar I imagine, but they'll compete with each other. What are hearing as far as getting these ideas through?
Don Cardon: As always, I want to be really truthful. What I'm hearing is, I think the fact that the platform is being led by the governor is huge. Speaker Adams has been very, very strong in her -- in his support saying governor, I want to be right there with you, and I've been encouraged from what I've heard from the conversations going on with president Pearce, he totally understands the nature of this statement how we get there, there's going to be negotiations. There is. There absolutely will be. But overall I think that everybody believes in the concept of shrinking government, getting focused, so that's going to be good. I think we're going to have challenges in terms of deal closing fund or enterprise funds, some of those will come up. And they should. We should have a good dialogue about it. But I tell you what, the governor has steely eye on this, and I'm confident in her.
Ted Simons: Alright well it’s good to see you. Thank you so much for joining us. We appreciate it.
Don Cardon: Thank you, Ted.