What kind of signals is Utah sending to the rest of the United States about its economic climate?
The Utah Economic Development Board believes that approval of the three tax initiatives in November would send bad signals from a state that is struggling to promote a healthy economic climate.With few exceptions, the board members said at Tuesday's meeting that they are against the three initiatives, which will roll back property taxes, reduce state income, sales, motor fuel and cigarette taxes and provide a tax credit for people whose children attend private schools.
Although the board couldn't muster a quorum, written statements from several missing board members were read by David J. Grant, Utah Division of Business and Economic Development director. Those statements gave the board more than enough support to vote against the initiatives.
Grant said board member John Price, a developer, favors Initiative C, the private school tax credit, because his children attend private school. Chairman Max Farbman also favors this initiative, but he didn't explain his reasons.
Price also favors Initiative A, the property tax rollback, mainly because he wants to send a message to various governments "to get their act together," Grant said. At last month's meeting when representatives from both sides presented their views, Price recounted a story of some problems he encountered when trying to get some property developed.
Grant quoted Price as saying he hopes existing services can be maintained if Initiative A passes and suggested that be done by instituting user fees to cover the anticipated amount of money that would be lost.
Other than the above three exceptions, board members vigorously oppose the three initiatives, mainly because they believe the proposals will hurt economic development in Utah by "the signals we send to those who are thinking about expanding their business into the state."
"This would be a knockout punch for economic development, something we have been working on for many years to promote through some rather precarious times," Farbman said. "Now is not the time for this type of effort," he said.
Farbman recited a story about a doctor who was being recruited for the University of Utah School of Medicine staff, but when he was told that a majority of Utahns (according to the polls) favored the initiatives he declined to come to Utah.
H. Roger Boyer, general partner in the Boyer Co., said if the initiatives pass and $300 million is chopped from various government budgets with a good share taken from education, it will let developers know that Utah isn't interested in education at all levels, and they will be reluctant to expand in to the state.
Boyer said his company pays taxes in the seven figures and would save taxes in the five figures annually if the initiatives passed, but the proposals aren't good for economic growth and the community.
He cautioned about initiative opponents over-selling their views because eventually people will question their credibility. He believes educating the public must be done at the grass-roots level.
All board members were encouraged to hold press conferences in their own cities and "spread the word about the effects the initiatives will have if they are passed." Grant will draft a resolution reflecting the board's views and distribute it to members so they can let people know about the support for defeat of the three proposals.