State economy continues growth
Tuesday , July 23, 2013 - 5:03 PM
Spectators wait outside of the Capitol for the rededication fireworks display Friday, January 4,...
SALT LAKE CITY — Mormon pioneer Brigham Young’s famous line “this is the place” wasn’t meant as a line to attract business — but it well could have been a promotional line way before its time.
The Beehive State is in a pattern of business growth and there appears to be more in sight. How and why are matters some state officials are taking seriously, as they try to expand on existing efforts.
Members of a state economic task force met recently to measure economic pressure points in the state and to get their hands around the little things that bring growth. The review measured issues ranging from tax burdens and incentives to regulations, wages and natural resources. It even measured the impact of weather on the state’s economic growth.
The review showed the state near the top of most positive trends with a unique population analyst Steven Allred labeled as “we’re cheap and we’re smart.” Utah’s population is among the most educated in the U.S. (No. 11) and the state ranks in the bottom 20 for wage levels. Allred speculated the wage average is low for the state because there are so many young people in Utah working part-time jobs, in comparison to other states.
The trends also show:
• Utah is No. 1 in the nation in entrepreneurship.
• The state ranks below average in the amount of sales tax burden per resident and also below the median and national average in corporate taxes. Dr. Andrea Wilko, an economist with the Office of the Legislative Fiscal Analyst, said those factors positioned the state well to attract business.
• Utah ranks near the bottom in regulations, which drew some discussion from lawmakers on the task force, if there were additional regulations that could push the state to even greater job growth. The state was ranked No. 7 for the least regulations by a George Mason University study.
• The state’s growth has not come by offering big incentives to outside firms. Utah ranked in the bottom 10 of the U.S. in the total amount of business incentives, while Texas easily tripled any other state in that regard.
“What we’re ultimately saying it we’re getting a large bang for our buck,” Wilko said of state incentives.
• The state’s population is also unique. Utah has the highest population of kids 0 to four years of age, and ranks dead last in the percentage of residents 20 to 64 years of age. The state ranks 49th, just ahead of Alaska, in the percentage of people 65 years of age and older.
• Employment growth in Utah since 1939 ranks fourth in the nation, just behind Nevada, Arizona and Florida.
• In general states with a warmer climate are more attractive to business. Rep. Rebecca Chavez-Houck, D-Salt Lake City, wondered if that might eventually be a negative for states like Nevada, who face water shortage issues.
“At what point does it become a negative to live in a hot place?” she asked.
Sen. Stuart Reid, R-Ogden, wondered if state lawmakers were to lower the income tax, if that would generate even more job growth.
Dr. Thomas Young, an economist with the Office of the Legislative Fiscal Analyst, said officials are currently conducting a pilot study on that issue.He said there are correlations to the sales tax burden per household and the unemployment rate.
The one-hour presentation before the task force also focused on potential industries where Utah can expand to attract stable, future growth.
Allred thinks local economic development specialists know what works.
“Utah has done a good job of knowing where its strengths and competitive advantages area,” Allred said.
Sen. Pat Jones, D-Salt Lake City, pressed state fiscal analysts for what the state’s Achilles heel might be.
Wilko said the weak point of the state going forward is the lack of data to show what incentives or deductions have specifically worked, because there are not sufficient recording mechanisms in place.
“Going forward that is one of the things I’d like to see, so we can say this is a good incentive, this is a good tax incentive. Maybe some changes in statutes for what we collect and what results do we get,” Wilko said.STORY:201307230003State economy continues growth/Business/2013/07/23/State-economy-continues-growth.html-1