VIP Economic Paper

VIP logo - standalone modern blue diskWe the People . . .

These words of the Constitution are an abiding vision of a people united in a participatory democracy. Valley Interfaith Project is working to make that vision a reality.

Imagine Metropolitan Phoenix with:

  • Rich networks of engaged citizens and capable grassroots leaders
  • Strong faith and community institutions working across lines and boundaries that traditionally divide us
  • Excelling schools in all parts of our community
  • Innovative career pathways to rebuild the middle class

This is the community we are working to create, through a process of training local leaders in Metro Phoenix communities to be active participants in our democracy, reweaving our civic and economic fabric.

VIP is a broad-based organization of 40 dues-paying members from diverse faith congregations, schools, unions and non-profit organizations, committed to building sustainable social and economic change. VIP brings together low, middle, and upper income communities to develop and organize leadership for participation in public life, drawing on the strengths of our faith and democratic traditions, to create a more just society.  For 22 years. VIP has been working on issues that promote human development.  The need for this work has never been greater.

A Struggling Economy

The economic recession hit Metro Phoenix families hard. While the recession affected almost everyone, it significantly hurt the most vulnerable – the elderly, the poor, immigrants, and children. Here are a few key Arizona statistics:

  • Between 2008-2011, more than 185,000 or 14% of Metro Phoenix homes went through foreclosure, resulting in huge disruptions to families and neighborhoods.  Over 45% of all mortgages are still “underwater.” [1]
  • Arizona lost 370,000 jobs during the Recession, the highest percentage nationally. Only one-quarter of those jobs have returned.
  • Arizona ranks 49th in per pupil spending.  Almost half of our high school graduates do not pursue any higher education.  Yet by 2018, 61% of all Arizona jobs will require post-secondary education. [2]
  • Arizona’s population is the 6th poorest in the nation, with 19% living in poverty.  This results in 1.3 million, or 20% of Arizonans on AHCCCS, our Medicaid health care system.[3]
ForeclosureUnemploymentYoung StudentStethoscope

The burden is more than just financial and material.  It is social and psychological, too. Families have difficulty determining why they are struggling and often view themselves as incapable to make a difference.  This perception paralyzes entire communities and perpetuates the problem. To change the situation, we need to understand how we got here.

A Dysfunctional Budget

The recession is only a part of the story; deep structural issues play a huge role too. The Morrison Institute has shown that the state created a structural deficit that was exposed in the recession, a permanent shortfall in revenue relative to expenditures. This was due to systematically reducing its tax collected relative to personal income over the past 40 years. [4]

From 1971 until 2000, Arizona collected between $45 to $55 in taxes per $1000 of personal income. Since the mid-90s, Arizona frequently cut income and property taxes so that by 2010, the state only collected $30 per $1000 of personal income—the lowest levels since the 1960s.  ASU Economist Dennis Hoffman calculates these cuts took $1.6 billion annually from our revenue.

DeficitRevenues and Expenditures Graph

Why didn’t we notice the missing revenue until recently?  During the peak periods, Arizona brought in growing revenues from sales tax on housing and construction. Rapid growth and the “housing bubble” masked the effects of the tax cuts. We made permanent cuts based on temporary tax surpluses. When sales tax dollars disappeared, our structural problem was exposed.

Three rounds of budget cuts drastically reduced spending on Education, Health Care, and Human Services. Figures from Governor Brewer’s office show that about 85% of Arizona’s General Fund of $9.6 billion budget went toward Education, Medicaid (AHCCCS) and Corrections. Only Corrections received an increase in funding in the downturn.  Currently, Arizona spends $7,500 per student, well below the national average of $11,000. We pay $25,000 per year to house one prisoner.[5]

Revenue Tax Graph

Arizona faces the sunset of the temporary one cent sales tax in by July 2013. Compounding this decline in revenue, Arizona enacted several tax cuts in 2011 and 2012, which will take effect in the next couple of years.  According to the Arizona Joint Legislative Budget Committee, we once again face a structural budget deficit by 2015.[6]

Is an $8.5 billion General Fund budget adequate for our state?  2010 Census data shows that our state has changed dramatically over the past two decades.[7] We have more children and seniors, who have added needs for education and health care.  We’re at the bottom of national rankings for Education, the uninsured, and poverty levels.  Yet we now spend less per capita on these growing needs than 1980.   If Arizona is to be competitive, it must invest in human capital.

Budget Circle GraphAZ Population

The Challenge Ahead

Arizona faces a significant challenge ahead. The Great Recession means the end of easy economic expansion.  During the housing bubble, we built an economy based largely on fast growth, real estate, and construction.  This was a dangerous overreliance on the wrong thing.  Houses don’t build economies; economies build houses. As Urbanologist Richard Florida says, our entire region became a giant Ponzi scheme.[8]

According to Florida, the regions that train and draw talented, well-educated people will command a huge competitive edge. The world’s 40 largest mega-regions produce 2/3 of global economic output and 90% of all new patents.  These areas benefit from an accelerated rate of “urban metabolism”—successful areas grow faster and have an energy and dynamism that foster innovation.  The Brookings Institute identifies the Sun Corridor from Flagstaff to Tucson as one of these potential “mega-regions.”  Brookings lists several factors, which will determine the region’s success, most notably, future investment in Human Capital— K-8 education, higher education, and adult worker retraining.

As Arizona emerges from the Recession, it cannot just rebuild a rapid growth economy.  The old jobs are not coming back.  With increasing globalization, the Phoenix-Tucson corridor competes with the Mega-Regions of the world.  In this New Economy, jobs will change frequently, and a higher skilled workforce is required. According to the Georgetown University Center on Education and the Workforce, 61% of Arizona jobs in 2018 will require post-secondary education. They estimate that 227,000 jobs will emerge in the next few years for Arizonans with a post-secondary degree.[9]  Yet only 25% of the Arizonan workforce holds a college degree today.  According to the Arizona Board of Regents, only 9 in 100 students who enter high school will complete a four-year college degree within six years of graduation from high school.[10] As Arizona becomes a “majority-minority” state by 2030, tomorrow’s leadership and high-skilled workers will be increasingly Latino.  But in 2009, only 69% of young Latinos graduated from high school, and only 9% obtained a bachelors degree.[11]  With a structural deficit on the horizon, will Arizona invest in education to meet the need for an educated workforce? 

A Strategy for Engagement

There are no quick fixes for our economic, social, and political challenges. But we must find the opportunity presented to us. Now is the critical time to invest in economic and human development.  According to Richard Florida, we can view the “reset” our economy has suffered as a chance to decide which innovative economic engines deserve our attention and resources, to invest in our human capital, and to refocus on sustainable living.[12]

PresentationWe need a strategy to engage local citizens in the decisions that will shape our economic future as a region.  Grady Gammage reminds us that in the past, Arizona “dealt with our challenging geography through collective action . . . through government; through making decisions as a citizenry.”[13] Citizens must see their responsibilities to each other as being part of an on-going conversation about the direction and quality of our common life and the public sector.

VIP believes that institutions — congregations, schools, labor unions, among others–-play a crucial role in the development of public people. Through civic institutions we learn the values of trust, reciprocity, and negotiation. It is here where we learn to have real conversations, a lost art today, instead of monologues of pre-determined, intractable positions on vital issues.

Thoughtful, strategic work is required to rebuild the civic sector and the institutions that comprise it. Our civic institutions are battered by the same atomizing forces that are tearing at the middle class.  Often they are focused on their own survival, and struggle to accomplish their vital mission.    Rebuilding our civic fabric requires these institutions to reclaim their formative role rather than withdrawing from public life and further privatization.  VIP is focused on a strategy to engage and strengthen local institutions by:

  • Training and developing their leaders, many who had never before found their public voice
  • Developing the capacity of institutions to be vital centers of leadership formation
  • Building alliances between diverse community institutions

This requires doing the patient “spade-work” of identifying leaders, relationship-building, and approaching each community with an imagination of its true possibilities. VIP trains leaders in the skills of organizing through the Cycle of Organizing, which can engage an entire institution. And together, VIP institutions are working to bring the power of organized, well-informed citizens to the table with political and business leaders as we craft solutions for Arizona.  

The Cycle of Organizing

VIP leaders organize through the following process:Cycle of Organizing w academies

Relational Meetings

The relational meeting is a face-to-face, one-on-one meeting where people share stories and concerns with one another. It is through these meetings that leaders begin to form public relationships with one another.

House Meetings

In these small group meetings leaders dig deeper into their institutions by listening to others’ stories, discerning common issues, and finding new leaders.  Through house meetings, the potential for action on issues begins to emerge.

Research Actions

As issues arise, leaders conduct research actions where they build their expertise and develop a course of action.  Research actions involve conversations with key political, business, academic, nonprofit, educational leaders, and others who are knowledgeable about the issue of concern.

DIGITAL CAMERASt. Andrew Episcopal Leaders

Civic Academies

With a newfound understanding of the issue, VIP leaders conduct civic academies in their institutions where they are able to teach others, hear new stories and concerns, and begin to move others into action.

Public Action

In public meetings with political, business, or other officials, VIP leaders seek action on specific proposals that will create positive change for their community. VIP leaders and institutions find allies in these public officials who will work with them on the agenda that has been developed through the Cycle of Organizing.Speakers

Reflection and Evaluation

Central to the Cycle of Organizing are reflection and evaluation.  These are the primary tools by which leadership is developed.  As part of a culture of reflection and evaluation, VIP leaders fine-tune their skills for public life and make their voices more effective.

The Impact

Engaged Citizens and Grassroots Leaders

VIP leaders organize through the Iron Rule: never do for others what they can do for themselves.  VIP engages ordinary people in collective action, informed by our faith traditions and democratic practices. VIP demonstrates that the most important office in a democracy is that of the faithful citizen.

Bonnie Danowski: 22 years ago, I sat at the table in those first VIP meetings, dreading being asked what I thought.  Passion burned in my belly but I was afraid and I didn’t yet understand the power that lay in organized, educated, and empowered people, until I started to give voice to my own story, and heard others tell their stories.

Bonnie DanowskiThrough individual and house meetings at the Franciscan Renewal Center and other congregation, we found that the long-term care system was failing our families, including mine.  My husband was diagnosed with Multiple Sclerosis 41 years ago, and is struggling with cancer.   We conducted countless house meetings and 45 research actions one summer to gain the knowledge we would need to fix a broken system.   The training for in-home caregivers was our brainchild and is now the standard for the state.   In 2007 we drafted the Lifespan Respite Care Program legislation.  We took our stories to nearly every legislator that session.  Our stories led to their stories.    Our passion ignited their passion.  The Bill passed overwhelmingly–in one session.  Our program is now recognized as one of the best in the nation.

The skills, the collaboration, most of all, the relationships that have been formed here stay with me.  People ask me why I don’t retire.  I’m trying, but VIP is an organization that can make real change.   Truly, hundreds of people have found their voice and are building those healthy communities that we set out to do 22 years ago.  For me and so many others, VIP unearthed the passion that burns in my belly, helped me find my voice and exercise citizenship in the true sense of the word.

~ Bonnie Danowski, M.S. Society, Phoenix

Martha Espinoza

Martha Espinoza: I’m a mother of two children who attend Creighton Elementary School in Phoenix.  Our inner city neighborhood has many challenges, including crime.  Many families in our neighborhood struggle with more than three part-time jobs just to make ends meet, and they have no money for childcare.  I rely on Creighton School to be that safe place where my children can learn and be safe until I pick them up, but with City budget cuts two years ago, we lost our afterschool program.  Many kids walk home along an unsupervised canal, and through an unsafe neighborhood to be latch-key kids.  They sometimes get mixed up with gangs, and some have even been exposed to sex offenders.  After hearing the stories of parents’ concerns at Creighton and St. Agnes parish, we organized with VIP to learn more about the City Budget – and we learned that this year, the City had money.  But they planned to give a tax cut.  What about our kids?  We attended budget hearings, and met with City Manager Cavazos, Mayor Stanton, and Councilman Johnson from our region.  We told our stories, and insisted that they give the money to things that kids need most:  afterschool programs, library hours, parks – things kids need to learn and be safe.  We were thrilled that the City Council voted to restore nine afterschool programs for inner-city schools and to expand library hours.  Councilman Johnson approached me after the vote to say, “Ms. Espinosa, I want you to know you made the difference in my vote.”  I know I’m not powerless to defend my kids, and I can make my city a better place.

Strong Community Institutions

As families struggle economically, they tend to withdraw inward as an instinct of self-preservation.  But these are precisely the moments when we need to turn to each other and lift up our communities.  Many of our families are finding it more difficult to be active in their congregations and schools as they struggle to make ends meet.  VIP works to overcome isolation and disengagement by creating and supporting a relational culture in congregations and neighborhoods.  Through hundreds of conversations in small group settings, people share their stories and learn that they can act together as a community.  In the process of organizing to advance the issues of human development, they revitalize their institutions around their mission to be stewards of the common good.  Clergy often find that the rewards of engaging in covenantal work with VIP bring strength and vitality to their ministry:

Rev. Miguel Gomez Acosta: Three years ago I began organizing with Valley Interfaith Project at First Evangelical Lutheran Church in West Mesa.  We’re a parish that is really two congregations:  an older Anglo population and a younger Latino population, trying to build something new together. This is not easy given the anti-immigrant rhetoric that surrounds us, and the economic troubles we all face.

Miguel Acosta

Right before SB1070, people were afraid of the police and we lost members of the congregation, but people weren’t talking about it across the parish.  So we began forming a Core Team of leaders who could listen to the stories of the people.  Then there was a shooting of a man very near our parish school, at dismissal time. We organized house meetings to hear the concerns of school parents and members of the congregation.  A community safety meeting became a VIP Action with the Mesa Police Department: our leaders told their stories, and we asked for and received commitments from the police department.  For many of our leaders, this was the first time they had ever spoken publicly, or dealt with a public official. Their children saw them grow in stature and confidence, right before their eyes.  And our neighbors who are not members of the congregation saw First Lutheran in a new light:  we acted as guardians of the neighborhood.  This recognition gave our congregation a new sense of purpose, and increased our resolve to integrate our two cultural communities.

~ Rev. Miguel Gomez-Acosta, Pastor, First Evangelical Lutheran Church, West Mesa 

Monica DorceyMonica Dorcey: The West Valley Neighborhoods Coalition is a non-profit, non-partisan member institution of Valley Interfaith Project, working in the West Valley, including El Mirage, Surprise, Youngtown, Sun City and Sun City West. 

Our work is community organizing.  That means getting into our neighborhoods and finding out what is really keeping people up at night and figuring out if their sleeplessness is being caused by an imbalance in the systemic relationships. To do this, we focus on training community leaders who can operate effectively in the civic sector.  That is, we do the work of justice by creating right relationships and systemic change to truly solve community problems.  At the core of every charitable need you are likely to find the need for justice.  Without addressing the lack of justice, the need for charity simply grows.  In the last 12 months, we have made significant strides in the West Valley:

  • Local Bond Elections for the new El Mirage police station and community center and School Overrides
  • Bringing ADEQ to monitor an old dump site along the Agua Fria River
  • Building Leadership in changing neighbors such as Youngtown and El Mirage
  • Public Transportation in Sun City area

Through WVNC, we create a safe public space where people can gather in a community they trust, where it is safe to tell their stories about their concerns, their fears, their vulnerabilities. One person talking about the isolation of her life cannot change the world, but her story can be immensely powerful when joined with those of others who are experiencing similar challenges.

~ Monica Dorcey, West Valley Neighborhoods Association

New Strategies to Rebuild the Middle Class: Arizona Career Pathways

VIP has piloted the Arizona Career Pathways (ACP) Initiative, a Labor Market Intermediary to connect disadvantaged and underemployed workers to long-term workforce training at the Maricopa Community Colleges.  ACP helps to eliminate the structural obstacles that keep the underemployed and undereducated from receiving the long-term training that they need to reach life-long self-sufficiency.  VIP holds outreach and training sessions in congregations and schools, both to recruit potential applicants, and to develop more leaders who will continue to develop a network of support for the program among key academic, political, and business partners, so that more workers can receive the training they need to reach family wage jobs with a career path and benefits.

Angelica Sawyer: I am a member of the Saint Andrew the Apostle Catholic faith community in Chandler.  A year ago I started looking for a new direction and purpose in my life. As a waitress, I enjoy the interaction I get from meeting new people, but I was looking for a career that was more challenging and more rewarding. As a mom, my biggest concern is the lack of health care benefits within the food service industry. While reading our church bulletin, there was a notice looking for people who wanted a change in careers, and information about an upcoming meeting sponsored by Valley Interfaith Project. I went to that meeting and learned about different careers that Arizona Career Pathways sponsors students for. I am now enrolled in Gateway Community College where I am working toward my goal of becoming a physical therapy assistant.

Angelica SawyerWithout the sponsorship from ACP, I don’t know how I ever would have afforded to go back to school. To pay $343 for the anatomy/physiology class, and $185 for the books I needed was not even close to fitting into our budget.  I finished my first class over the summer and cannot describe the feeling of accomplishment and the confidence I have gained. I plan on graduating with an associate of applied science degree where the starting salary is $45,000, more than double the income I earn right now.

I hope to specialize in geriatric therapy. More than anything I want to be a positive role model for my children, and I want my family to be proud of me.

A Broader Vision for Metro Phoenix

Abraham Lincoln was the first president to make the claim that a solid middle class was the engine of economic prosperity. [14] Lincoln’s economic vision was that the government’s role was to “clear the path” through internal improvements so that ordinary citizens could build on a firm foundation toward economic prosperity.

Strengthened by civic sector institutions, trained and skilled in the habits and practices of public life, alert and ready to work in alliance with people of different cultural, religious, and economic spheres, we envision ordinary people exercising citizenship in the public square and struggling to transform our cities into places that will educate and sustain our families. Valley Interfaith Project builds this critical dynamic network of leaders with strong connections to one another and the capacity to reweave our public and social fabric. Nothing is more crucial to build a competitive economy and renew our political life in Metro Phoenix and Arizona. Creating a constituency who will support investments in human capital will provide the solid foundation for our economic recovery and future.  In cooperation with business, labor, government, and the civic sector we can establish life together more commensurate with the beauty that surrounds us.

Together in Prayer & Action


[1] “Final Phoenix-area foreclosure numbers for 2011.”  ASU News, January 18, 2012. https://asunews.asu.edu/20120118_business_butlerreport
[2] Anthony P. Carnevale, Nicole Smith & Jeff Strohl. Help Wanted:  Projections of Jobs and Education Requirements through 2018.  Georgetown University, June 2010.  http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/arizona.pdf
[3] Khara Persad, “New numbers show poverty continues to climb in Arizona.” AZ Capitol Times, Sept. 24, 2012
http://azcapitoltimes.com/news/2012/09/24/poverty-in-arizona-continues-to-rise-new-report-says/
[4] Hoffman, Dennis and Tom Rex. “Public Finance in Arizona. Volume I: Facts.” Arizona State University, W.P. Carey School of Business. December 2008. http://wpcarey.asu.edu/seidman/reports/UnivEconomist/publicFinance-1.pdf
[6] Arizona Joint Legislative Budget Committee.  “Finance Advisory Committee Briefing Materials,” October 4, 2012. http://www.azleg.gov/jlbc/facag100412.pdf
[7] US Census Bureau  www.census.gov
[8] Florida, Richard.  “How the Crash will Reshape America.” Atlantic Monthly.  March 2009. http://www.theatlantic.com/magazine/archive/2009/03/how-the-crash-will-reshape-america/7293/4/
[9] Anthony P. Carnevale, Nicole Smith & Jeff Strohl. Help Wanted:  Projections of Jobs and Education Requirements through 2018.  Georgetown University, June 2010.  http://www9.georgetown.edu/grad/gppi/hpi/cew/pdfs/arizona.pdf
[10] Arizona Board of Regents.  “Arizona Higher Education Enterprise Solution.” http://azregents.asu.edu/public/abouttheboard/arizona%20higher%20education%20enterprise/arizona-higher-education-enterprise.pdf
[11] Morrison Institute, “Dropped? Latino Education and Arizona’s Economic Future,” April 2012.
[12] Richard Florida, “The Long Road to Recovery.”  Atlantic Cities, September 2011. http://www.theatlanticcities.com/jobs-and-economy/2011/09/long-road-recovery/154/#disqus_thread
[13] Grady Gammage, “What’s the Deal with Arizona?”  Morrison Institute, 2011 State of the State Conference.
[14] Norton Garfinkle, The American Dream vs. The Gospel of Wealth: the Fight for a Productive Middle Class Economy.  New Haven:  Yale University Press, January 2006.