Ted Simons: Local first Arizona is a nonprofit that's dedicated to strengthening communities and local economies by supporting locally owned businesses. The organization touts the environmental, economic, and cultural benefits of buying locally. I recently spoke with Kimber Lanning, founder and director of local first Arizona. Thanks for joining us on "Arizona Horizon."
Kimber Lanning: Thank you so much for having me.
Ted Simons: Local first Arizona, let's get a definition. What are we talking about here?
Kimber Lanning: We are a nonprofit organization that we operate all around the state. And we're actually a group of independent businesses that advocates for stronger Arizona economy. So we accomplish that in a few different ways. Quite literally, we are a 501C6 and in tandem. Two different types of non-profit organizations. One is a foundation that works to strengthen the whole community, and the other works to strengthen the local business community.
Ted Simons: OK. So in terms of strengthening the local business community, I know one of your quotes was the up side after down economy is here, and there for the taking. What does that mean? How do you -- how -- can buying locally really change things?
Kimber Lanning: Absolutely. That's a wonderful question, and I get asked that question a lot. Let's use a very simple example. Let's say every day you go to a big national chain to buy your latte. And that big national chain, let's say they have locations across the valley. Or let's think your option is to choose a local alternative. You're thinking, that's just -- what difference does it make? How many let's say accountants does the big national chain employ near Arizona? None. How about graphic designers? None. Web developers? None. So we spend our money with a big national chain and it immediately leaves Arizona's economy. Whereas if we choose to buy our latte in the morning, from an independent coffee shop, they have a local graphic designer, web developer, it keeps dollars recirculating in the local community. Those are what we call secondary jobs created by dollars recirculating, but there's -- so we could even talk about the janitorial supply companies that keeps the offices clean at the accounting firm that only exists because local businesses keep them employed.
Ted Simons: Yet some will say a local franchise keeps business -- people employed as well, it's an open business, it pays taxes, it gets people jobs as well. It's a franchise, but it's based here nonetheless.
Kimber Lanning: A franchise is between a national chain and a locally owned business. So we always remind people, tomorrow if you had to go buy a faucet, best thing you can do is find a local independent hair ware store. If you can't, the next best thing is find a true value, which is a co07, so that has more employee owner opportunities. The third thing is to find an ace. If you find an Ace you know it's going to have a local franchise owner, they're more than likely going to give to Arizona charities, they're hands on, right here in town. The next thing which drops significantly down on that list, is to go to one of the big box stores, because they -- when you spend $100 there, only $13 stays and recirculates in the community. The absolute worst thing is go online and buy that faucet from an out-of-state company where you're not even paying sales tax.
Ted Simons: Online economy, how is that changing this dynamic?
Kimber Lanning: The online world here in Arizona has changed everything. So we have a big national -- international company that has over 5 million square feet of space right here in Arizona. They are selling two Arizonans and they are not collecting sales tax. That has caused a major loophole. They estimate it's kept about $750 million out of Arizona state coffers just last year, and the worst part about it, it gives roughly a 9.3% advantage because they're not collecting that 9.3% sales tax. People think they're real clever, people think I'm going to go online and do my holiday shopping and I'm going to save sales tax. But they forgotten the sales tax is what keeps police and fire moving, that's what keeps the street light on, the traffic being collected. So if we don't pay our sales tax, which was the deal woe struck way back when, if we don't pay our sales tax we can't be surprised when our property taxes go up.
Ted Simons: Yet there are those who will say that's all fine and dandy, but I want the cheaper price I can get from the big box store that I can get online. I can save money that way. It might be -- and it's just too doggone difficult to find the local carrier.
Kimber Lanning: Right. So -- those are the main two things I hear. One is people have the misperception it's more expensive to go local, which is sometimes true and sometimes not. And the other is that it's inconvenient. A couple good examples, finding a local mechanic is not more expensive than going to the dealership, and it's not any less convenient. Local mechanic getting a local haircut, choosing Harkins theaters, apples to apples. Exact same amount of money, and three times more of the money you spend at a Harkins theater will stay and recirculate.
Ted Simons: In terms of convenience and these sorts of things, can you get people -- this is buying mentality here. This is the old economic model of what people want and how they want it. How do you get people to think of that first before they get in the car and go driving down the block?
Kimber Lanning: Sure. This is your -- welcome to my world. So what I try to get people to understand is if you think you're saving money, and you're buying from a company that does not offer health insurance to the masses that work for them, that's really just deferred billing. If you're a company that doesn't offer any health care for your employees, those employees are going toned up on the state health care. That health care program is funded by the taxpayers. So that means you're buying cheaper products from a company that you're subsidizing effectively through your taxes, you're subsidizing your health care. If you measure over time how much money you're spending, you're not saving any money. I jokingly say about my little record store, I would happily lower my prices if you find folks who would pay for the health care for my employees. That would be a screaming deal for me. But it would be a bum deal for the person paying the taxes.
Ted Simons: What kind of response are you getting? What are you getting from civic leaders, businesses, the big box and the Ma and Pas They have to be happy to hear about this, yet I wonder what kind of overall reaction you get.
Kimber Lanning: We are getting so much traction it's unbelievable. Local first Arizona is the largest local business coalition in North America. We have 2100 members. I just hired my ninth staff member. And most people when I can get in front of them they understand we're not trying to eliminate any big corporations at all. We're trying to celebrate local and help folks understand the economy. If you are a graphic design person, and you're only spending your money with big box stores that will never hire you, and whose sole purpose is to put out of business the companies that might hire you, you are effectively -- you are supporting a system that is going to put you out of business in time. So I like to call that buying ourselves broke. And what's unfortunate is that we all sit around and blame the economy. Our point of view is that the economy is not something far away that the government is going to fix for us, the economy is the American consuming public, and we can fix it. And we will.
Ted Simons: And real quickly, are you seeing it being -- getting traction, getting interest, are you seeing results?
Kimber Lanning: We are. We have a shift Arizona website, where you can go and pledge to shift just 10% of your spending. We're not black and white, we're not saying all or nothing. We're saying if you can shift 10% of your spending it will have an enormous impact on Arizona. So you can go to our website and to your monthly expenditures and click "I pledge to shift 10%" and it will show you how much more you're going to recirculate for parks, libraries, fire departments. We've had over $65 million pledged.
Ted Simons: What's the website address?
Kimber Lanning: LocalfirstAZ.com.
Ted Simons: Thank you so much for joining us.
Kimber Lanning: Thank you.