Incentive program hailed as a boon for Utah

A top Utah economic development official believes a relatively new incentive program to get new companies into the state and aid in existing-business expansion has been a hit.

Martin Frey, managing director of economic development for the Governor's Office of Economic Development, told the Workforce Services and Community and Economic Development Interim Committee on Wednesday that the new incentive tool is helping Utah compete with other states offering lures to businesses.

A new incentive for the state was approved by the Legislature in early 2004. HB11 allows the state to provide rebates of incremental tax increases resulting from business expansion and relocation.

"I would suggest that the program is a significant success. . . . It's part of economic development overall, and economic development is a revenue generator for the state," Frey told the committee.

Information distributed to the committee indicates that since HB11 became effective, GOED provided incentives to seven companies totaling more than $8.1 million. They are expected to create 3,449 jobs, of which 2,315 are expected to be above the county median wage.

The seven incentives are expected to generate additional corporate and personal income tax revenue of more than $62.6 million, equating to a 7.7-to-1 return on the investment in the companies, according to the GOED statistics.

Frey said the state is focused on boosting visibility and ensuring equitable distribution of HB11 incentives across the entire state.

Rep. Steve Mascaro R-West Jordan, said he was pleased to see Utah companies on the list. He said that when HB11 was being debated, some critics voiced concern about the state providing incentives only to outside companies and not helping existing Utah companies grow.

"I clearly see on this list companies that are here in Utah that we have helped expand, and that's really an important thing," Mascaro said.

Incentives awarded after HB11 became effective include those for:

• Sports Capital Partners, 90 employees, $2 million incentive over 10 years, nearly $11 million in new state revenue.

• Extra Space Storage, 88 employees, $1 million over 10 years, $3.2 million in new state revenue.

• Salt Lake Encoding Center for the U.S. Postal Service, 1,304 employees, $250,000 over three years, $19.7 million in new state revenue.

• West Desert High Energy, 45 employees, $350,000 over two years, $936,200 in new state revenue.

• Merit Medical Systems, 455 employees, $1 million over five years, $7.4 million in new state revenue.

• Carlisle SynTec, 134 employees, $295,000 over five years, $4.1 million in new state revenue.
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