Utah governments are well-practiced when it comes to doling out financial incentives. Often, one city will offer a large retailer a generous tax break if it will relocate from a neighboring city. They are perhaps ignorant of the fact that retail will follow growth naturally.
But tax incentives designed to bring new, well-paying jobs into the state are another matter.
The Governor's Office of Economic Development Board recently approved offering an $85 million tax-rebate incentive in hopes of luring Procter & Gamble Co. to build a large plant in Box Elder County one that eventually could employ 1,000 people at salaries twice the county median. Those incentives would be in the form of a rebate of half the new tax revenues the plant would provide the state. Box Elder County is busy preparing its own tax-increment incentive to offer the company, as well.
These are entirely appropriate. If Procter & Gamble chooses Utah, it will bring new jobs and people into the state. That, in turn, would provide the population and money in Box Elder County necessary to attract other services, such as retail stores, doctors and dentists and a host of other jobs that are needed to keep a community functioning.
That is what is known as real economic development. A new retail store, on the other hand, is not economic development. It is something that follows economic development naturally. A new soccer stadium provides a minimum of jobs and virtually no tourism. Its value, if it has any, lies in the psychological lift a winning team can provide, or with the recognition it can bring a community when the team's name is mentioned.
But the Procter & Gamble plant would bring 300 workers in its first phase, making the state's investment pay off from the beginning.
Utah has no guarantee that the plant will come here. Several other states are in the running. That's where the other incentives state and local governments frequently offer can come into play. Each of them ends up impacting tax rates. Low taxes are an incentive for any business looking for a home. Concentrating only on real economic development makes sense.