In a recent letter to the Pima County Supervisors, a group of business owners and CEO’s of local defense and aerospace companies expressed their concerns regarding the Pima County lawsuit against Raytheon. Raytheon is the area’s largest private employer, as well as being a customer of many smaller high tech businesses in Southern Arizona.
The County is suing Raytheon in response to the company’s successful appeal of Pima County’s property valuation. In that appeal, the Board of Equalization reduced the 2011-2012 valuation from approximately $40 million to approximately $26 million. The difference amounted to a relatively small dollar amount for both the County and the company – $571,000 over the two-year period.
It is the opportunity costs that concern most local business experts. In their letter, the group notes, “It is clear that the message the Board of Supervisors is sending with the acceptance of this lawsuit is that our community is unwilling to work with our largest employer and therefore, may also be unwilling to work with any other companies either current or future. The lessor and perhaps just as critical message being sent is that our community is not business friendly. By suing our largest contractor, we are truly showing a complete lack of respect to Raytheon and their contributions to our community.”
The group echoes the questions Supervisor Miller has been asking:
“Our number one question is, why is the Board of Supervisors allowing the Pima County Assessors’ Office to use County (tax payer) funds to sue our largest employer? We understand the Supervisors approved the use of the funds in the Assessors’ budget and did not authorize any additional funds for this purpose. We strongly believe the right move would have been to vote against the use of any County (tax payer) funds for this lawsuit.”
“It is our understanding that this is not the first time the County Assessors’ Office has sued Raytheon. It appears that in both cases, the Arizona State Board of Equalization reviewed the valuation and rendered an opinion. If this is the case, why is the Board of Supervisors not insisting that the decision of the State Board of Equalization be honored, if for no other reason than to avoid the use of county tax payer funds for an initiative that is considered very rare? As business owners and CEO’s we wonder, too, if due diligence has been conducted by the Board of Supervisors to insure that Raytheon is not being targeted unfairly. In other words, has any one of the Supervisors or their staff taken the time to research how often a case that has gone before the Arizona State Board of Equalization proceeds to a lawsuit? Is it a standard practice of the Pima County Tax Assessor’s Office, or is Raytheon the only company to be sued in the last four years?”
How much of the $3 billion impact on the state is actually realized here in our community simply by virtue of the fact that Raytheon is in Pima County? How much of that can we afford to lose?”
Raytheon employs approximately 10,300 residents of Southern Arizona.
According to the group:
Tucson is currently ranked 4th in the nation for total percent of the manufacturing workforce dedicated to high tech.
Raytheon is the dominant A & D contractor in the State receiving more than 48% of all Arizona DoD contracts.
The Tucson area received the largest total value of contracts from the DoD with more than $5.2 billion in 2010.
(Data from the Careerbuilder and EMSI Occupational Projections: 2013 – 2017
The U.S. workforce is projected to grow 4.4 percent from 2013 to 2017.
23 of the 52 largest metro areas outpace the projected national rate of job growth including Phoenix (not Tucson).
Tucson does rank in the top 15% for projected job growth (for low wage jobs).
Phoenix is one of the 3 projected to see high wage growth (Tucson is not).
Tucson – one of the top metros in overall job growth – is expected to see the second-lowest share of high-wage growth behind Detroit, at 26%.
Finally the group asked; “What would be the impact on Pima County’s economy if Raytheon were to continue to focus growth on other facilities in other parts of the country? What would the impact be to all the areas of importance to the citizens of Pima County if Raytheon invested more in their operations here?”