MOUNTAIN STATES

FRED CARUSO executive secretary

THE NATIONAL Lumber and Build- f ing Material Dealers Association legislative committee, of which I am a member, met in Kansas City on Dec. 5 to dwelop plans for the l9&4 Conference with Congress and to develop a strategy for the Mortgage Rdirement Account legislation currently in Congress.

Nothing has happened to the MRA bills since August due to the Treasury Department being unable to provide Congress with meaningful figures on the MRA's potential impact on the national debt. Initial estimates based on "wild guesses" projected a $5 billion deficit due to lost tax revenue resulting from heavy utilization of the MRA. Senator John Tower (R-Tx), the bill's originator, sent the Treasury researchers back to the drawing boards to take another look.

Throughout the frnal months of 1983, Congress and the Treasury Department were preoccupied with tax measures (all of which failed to pass in the final days of the 1983 session). Treasury "put-off' Senator Tower's requests for data on the basis that pressing tax bills were making it impossible for their researchers to get to the MRA issue.

With the adjournment of Congress in late November, Sen Tower renewed his efforts to pressure Treasury into completing its study of the MRA fiscal impacts prior to the end of Congress' recess on January 23.

The MRA bill is not going to move without a favorable fiscal impac-t report. The NLBMDA in Washington and we at the MSLBMDA are helping Sen. Tower bring forth a report by writing letters to key personnel in the Treasury Department and selected leaders in Congtress, urging the completion of a fiscal report that will include the favorable aspects of the MRA as well as the short-term revenue loss.

MRA supporters believe the fiscal impacts will be minimal and quite likely favorable in the long run due to:

(1) savers using their IRA allowance to pay off mortgages early would lose a tax deduction in direct proportion to the interest saved, and

(2) increased construction resulting from an increased mortgage lending activity and quicker availability of down payment funds resulting from MRA investments will generate tar( revenues at every level of government.

Earlier unfavorable Treazury estimates assumed that MRA would generate some $15 to $20 billion in new IRA tax-deferred savings investments in the first year (rougfily a?,/Jto 2590 increase over present IRA investment levels). Supporters believe that the majority of MRA investments in the early years would result from a "shifting" of present IRA investments and savings patterns from one IRA option to another.

At this time savers can use their IRA allowance of up to $2,000 a year per wagee.uner to purchase stocks and bonds, real estate partnerships, or savings certificates insurance investments, and other options.

NLBMDA's Legislative Director Harry Horrocks is working with the staff of the U.S. Savings and Loan League in an effort to secure their research assistance in the development of a credible study of the MRA ouside of the Treasury Department. Horrocks is also securing cost estimates from private research firms. If necessary and feasible, the NLBMDA will invest the $20,000 it had set aside last year (1983) for MRA promotion.

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E.J. JOHNSON executive vice president

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be setting the stage for the lumber business in 1984.

As previously reported, both the Tucson and Phoenix new residential markets are increasingly turning from traditional block to frame construction. Wood now commands about 9090 of this market.

A sales vice president for a major Phoenix area homebuilder recently commented that "It doesn't seem that block construction will ever again dominate the home market as money conscious lenders, builders and consumers seek ways to economically put people into new houses." He continued, "new construction techniques with wood frame offer better opportunities to cut down on costly construction time and expedite occupancv. "

Flagstaff, the economic hub of Northern Arizona, has been experiencing good residential growth for the past two years. Home construction there is expected to remain strong but to level off as available housing is absorbed by the resale market. Its emerging importance as a regional rail and transportation center indicates continued economic growth for years to come.

The resort communities of Sedona and Pinetop,/Show Low are largely dependent upon the exclusive retirementrecreational home market. Interest rates generally influence second home construction, although they have had little impact upon the two hundred thousand dollar residential market which remains very strong in these areas.

The mile high community of Prescott has attracted considerable outside investment as a result of a developing employment base and of its attraction as a retirement area. Its stable economy and construction appear to continue to grow throughout the year.

The communities along the Colorado River also are experiencing growth. Bullhead City's rapid increase in population reflects the expansion of gambling facilities across the river in Nevada. While the mobile home market is strong in that area, there is continual improvement in both commercial and residential construction. Reports from Lake Havasu City indicate that all construction looks promising through the year. The recent flooding had a major impact upon Parker and the rcreational communities further south. Rebuilding is widespread to accommodate the recreational crowds which are attracted to that area.

Reasonable growth is orpected for the Yuma area as its economic sphere of influence continues to expand to include areas of Southeastern California.

Most of the remaining population areas of the state, however, report slight or no construction growth as they largely feel the impact from mining and agricultural activity. On balance, it should be a good year for most of the lumber businesses in Arizona.

On the legislative scene, state lawmakers have been in special session seeking funding solutions to the overcrowding problem at state prisons. The legislature will commence its regular session in January with finding sufficient revenues for the state's business as its priority task. Recent flooding in many parts of the state has created extraordinary expenditures which must also be

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