Job-luring rebates worry some legislators

A measure designed to provide tax rebates to job-creating companies was questioned Wednesday by some legislators who worried it would harm existing Utah businesses.

A draft bill considered by the Legislature's Workforce Services and Community and Economic Development Interim Committee calls for an expansion of the rebate program beyond aerospace and aviation development zones near airports.

Mark Renda, who is in charge of incentive programs for the state, said the bill would align the interests of local and state governments "and, secondly, open up this tax increment funding mechanism that was deployed in the aerospace aviation development zones to all value-added industries and to all geographies throughout the state, not just around airports."

But Sen. Carlene Walker, R-Sandy, wondered if Utah businesses would be at a disadvantage if an out-of-state competitor moved in and received the incentive. Rep. Karen Morgan, D-Cottonwood Heights, shared similar concerns. "I think they're valid, and I think they need to be addressed," Morgan said.

Renda replied that the incentive is designed for companies already competing nationally in an industry sector "and not retail jobs."

"So I'm not certain how that increases competition or advantages one group over the other," he said. "We're only interested in whether or not the jobs occur in Utah versus Nevada or California or Colorado. We're interested in incremental new jobs and, yes, there will be competition. There already exists competition when companies come into the state.

"The question is, does Utah want those jobs or not, or do we want to give those jobs to Arizona? So, would we prefer to have that company be in the state, helping carry the tax burden of schoolchildren and others, or do we want that company to be in Arizona, benefiting schoolchildren in Arizona?"

Rep. Greg Hughes, R-Draper, wondered why a Utah business would stay if it could not get incentives from Utah but could get them elsewhere.

"I think that what has happened is that as each state tries to up the ante to bring in jobs from out of state, we ignore the bread and butter, the businesses we have, the jobs we already have contributing to our economy in the state," he said, adding that he wants a better tax environment for all businesses. "What this (bill) does is alienates those that we already depend on."