After several years of an anemic growth in the state’s economy, Chandler business leaders gathered Wednesday to hear some good news about the city’s economy from Jason Bagley, the manager of government affairs at Intel Corp.
He addressed the company’s effect on Chandler’s economy and the importance of education in Arizona.
Bagley told the audience that Intel plans to pump billions into the state’s economy in the near future.
Intel has allocated between $6 billion and $8 billion for research between its operations in Oregon and Arizona.
The company also plans to spend $5 billion on a new factory in Arizona that is scheduled for completion by the end of 2013, which will bring thousands of new Intel and constructions jobs to the state, Bagley said.
In addition to the new jobs provided by Intel and the construction of the factory, the company has an economic multiplier of three to four, said Christine Mackay, Chandler’s economic development director. That means for every job added by Intel at the new factory, three to four jobs will be added to community.
“Intel is obviously our largest employer in Chandler. They have got almost 10,000 employees here,” said Chandler City Councilman Jack Sellers.
“A lot of their people live in Chandler and not only do they then have a significant financial impact on the city, but they are very good citizens.”
The company’s economic effect was felt throughout the economic downturn. Mackay, who is credited with bringing 21,000 jobs to Chandler over the past five years, said that Intel offers the highest wages in the state and employs close to 10,000 people in Chandler, giving the city the third lowest foreclosure rate in the region.
While Intel has a large impact on Chandler, it also has plays a large role in the state’s economy: Intel invests $450 million in research and development in Arizona yearly and has an average $2.6 billion economic effect.
Bagley said the street goes both ways — Arizona has affected Intel as well. “Government definitely has an impact on companies like Intel, any business for that matter,” he said.
Tax treatment is perhaps the largest area where Arizona affects Intel. The company has expressed concern over the property tax because it is so much higher for businesses than homeowners.
In February, the property tax was lowered as a part of a $538-million piece of legislation that cut taxes and incentives for businesses to locate to Arizona. The legislation was touted by Gov. Jan Brewer and Republican legislators.
Bagley said this would affect future investment decisions Intel will make.
Chandler also has affected the taxes Intel must pay.
“We do have a for-trade zone set up so that it does impact the property tax rates that are paid. This is an enormous investment,” Sellers said.
“If it was valued at the normal commercial rates, it would make us very uncompetitive to locate a manufacturing plant here.”
Bagley also talked about education’s importance and its struggles.
“There is no silver bullet when it comes to education,” he said. “The issue is how the money is being spent.”
On Tuesday at a gathering of the Arizona Commerce Authority, a body created by executive order of Brewer, former Intel CEO Craig Barrett told lawmakers and business leaders that the current educational climate in Arizona was “not particularly attractive.” He even went so far as to say that the state would not be among the top 10 choices if Intel were looking to start an operation from the ground up.
On Wednesday, Bagley highlighted Intel’s financial contribution to education — more than $100 million each year is spent in over 50 countries — and its work with ABEC, the Arizona Business Education Coalition.
“(It) provides really the vehicle for the business community to work directly with the education community,” he said.