Dr. Dennis Hoffman, an Arizona State University economist, presents his 2011 economic outlook at the WESTMARC annual meeting Wednesday.

Mollie J. Hoppes/Daily News-Sun

Arizona fell further, faster than nearly every state in the union during the economic recession of the past few years, but Dr. Dennis Hoffman said Arizona could also be in a good position to climb back.

“In 2009, Arizona was ranked 49th in the country in job losses,” said the economist as well as the director of the L. William Siedman Institute and a professor at Arizona State University. “This fall we were ranked 12th. That shows you what the rest of the country is dealing with. They did not fall as hard at first as we did. Now, we’re not back to No. 1 yet, but I wouldn’t count us out.”

Hoffman said he believes the way to spur growth in the state’s economy is to focus on what he identified as a few primary concerns.

“People magnetism has to be regained,” he told a gathering at the Glendale Civic Center for WESTMARC’s Annual Meeting and Economic Forecast Breakfast.

Hoffman said the public perception of Arizona around the country has taken a serious hit over the past couple of years, and state leaders need to focus on turning that around.

“I’m not making a political statement. That’s not my game,” he said. “But ask yourselves, are we exhibiting the image of Arizona that we did in the '50s and '60s? We need to find a 21st century version of regaining that imagery.”

Part of the fallout of that poor perception and the economic downturn has meant something Hoffman said he never would have imagined.

“We are estimating a loss of 45,000 residents in Arizona in 2010,” he said. “This is not a state that loses people.”

Hoffman said the budget deficit is obviously a big concern moving forward. The problem is that people are simply not spending money, which Hoffman outlined with several graphics on everything from vehicle purchases to retail spending. With population growth not only slowed but in the negative and the people who are here spending significantly less money, the state has less in its budget to work with, yet Hoffman said they are still budgeting as though that extra money is there.

“We need to have an honest discussion about what we can do without,” he said. “What do we want our government to be?”

Hoffman’s proposal includes easing the tax burden on business and shifting it to individuals, which he said will tell us which programs are needed and which can be downsized or cut.

“Tax the individual. Ask each person, within their means, to pay for the services they want,” he said. “We’ll find out if they want them or not.”

In order to regain competitiveness with other states, Hoffman said Arizona needs to reinvest in education.

“They tell me now that ‘investment’ is a code word for spending, which I guess in this case it is,” he said.

Spending on K-12 and college education has “plummeted,” he said, beginning in the mid-1970s.

“Until 1970, we spent more on education than the average state,” he said. “Our teacher salaries were above average.”

Now near the bottom of the education funding ranks, Hoffman said a commitment to creating an attractive environment for students, parents and educators will go a long way toward making Arizona the top state in the country economically.

“Investment in education is very, very important,” he said.

Jeff Dempsey may be reached at 623-876-2531 or jdempsey@yourwestvalley.com.

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