A manufacturing incentive may be in the works

Utah legislators this week listened to proponents speak about the importance of establishing a manufacturing incentive as a way to maintain the industry's strength in the state.

Rep. Brent Wallis, R-Ogden, told the Workforce Services and Community and Economic Development Interim Committee that he would like to work through the summer to make a bill to bring to the committee this fall.

Wallis said a manufacturing incentive is "a new tool that can be used in the overall scheme of economic development."

The state does "an awful lot to recruit out-of-state companies to Utah," Wallis said. "We find 80 percent of development in the state comes as a result of the growth of local companies." Wallis suggested a shift toward investment in industry infrastructure rather than job creation.

With new technology, automation is having a significant impact on the development within the state's companies. Wallis said the number of jobs is not the critical factor, but rather the kind of jobs.

Ron Kusina, executive director of the Weber County Economic Development Corporation of Utah, supported the idea of a bill creating manufacturing incentives in the form of tax credits.

Kusina said the incentives would not result in jobs lost because of increased automation and that job creation as a result of such an incentive would be relatively small, compared with current business-recruitment incentive programs.

In response to legislator questions, Wallis explained that the broad category to be targeted is property investment. Kusina said the benefit of an investment incentive would be increased personal and real property tax to counties.

Wallis explained that incentive programs would be "post-performance," meaning that the business would need to improve to agreed-upon levels before it received an incentive.

The Governor's Office of Economic Development was very supportive last year of the idea of a manufacturing incentive, but it asked Wallis to explain the idea to the committee this summer and come back in the fall to present a bill to them.

Kusina said if the state "still honors the idea of manufacturing," investment should play a stronger role in the future.

E-MAIL: cneugebauer@desnews.com