C'mon Arizona tech community...do the right thing
Learn about and support Senate Bill 1335 and House Bill 2364

4/1/2005

By Gene Holmquist

As an entrepreneur, and someone who makes a definitive choice to live and build a technology business in Arizona, I ask that all reading this editorial support bills SB1335 and HB2364 for passage in the upcoming legislative budget process for fiscal ‘06.

Let me tell you all the compelling reasons why. And if you’re anything like me, you’re probably someone who tends to like to get information in a bottom-line-how-does-it-impact-me kind of fashion) so I’ll lay out the value prop for you in very simple terms:

Both bills are at a critical point in the State Legislature. The technology community must appeal to the House and Senate Leadership to ensure these bills are in the budget.

SB1335’s purpose is simple and important to Arizona: to expand early stage investment in Arizona’s small businesses in the form of tax credits. Small businesses comprise more than 80% of Arizona’s economy. Assisting small businesses as they grow, particularly those well-positioned to create high wage jobs, is critical to Arizona’s economic growth. Arizona cannot afford to lose its knowledge-based small businesses to other states. The critical shortage of equity capital for new businesses in Arizona represents a serious shortcoming and, as a result, small, homegrown businesses face difficulties in expanding operations and taking new ideas, products and services to market.

HB2364 is simply an R&D tax credit enhancement to encourage Arizona companies in doing research in collaboration with Arizona universities. This is an excellent way for businesses to tap into the expertise and extensive facilities of our State universities to advance industry commercialization. R&D generates new products, and products generate new jobs—higher paying jobs. This would also attract venture capital and encourage commercialization of State university research. HB2364 offers breaks for private sector companies to collaborate with Arizona Universities.

Together, these bills assist in solving the biggest obstacles to Arizona's knowledge-based economy: early-stage capital and R&D investment. Both bills are capped at $5 million a year over four or five years, so there's no runaway budget. These are sound investments in high-wage jobs, which stimulate the economy and move Arizona toward becoming a knowledge-based economic leader.

Too often as you build a business, it's easy to ignore public policy, because you don’t think it affects you and your future. Wrong. It does. SB 1335 and HB 2634 are perfect examples. When I look at Ensynch’s clients, they are all growing companies—some of which wouldn’t be here had it not been for early stage investors. So not only does this public policy affect me as a business owner starting my own business, but it also directly impacts the universe of customers Ensynch has.

Senator Barbara Leff, an ardent supporter of moving the tech agenda forward, was recently quoted as saying “Our biggest issue is educating the members of the tech sector”.  So c’mon Arizona Technology Leaders, e-mail your legislature, get involved, and support these bills so that Arizona can have a fighting chance to lead the nation as a knowledge-based economy!

Gene Holmquist is the President of Ensynch, Inc., an Arizona-based provider of IT infrastructure services, staffing and enDemand data center solutions that serves growing companies in the emerging mid-market to enterprise space.

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