The states that are really smart are those that are working with their existing businesses. If you can create an environment that's attractive for them to grow within your state, you're way ahead of the game. —Ron Pollina, president of Chicago-based Pollina Corporate Real Estate Inc.
SALT LAKE CITY — When it comes to creating an environment for business to prosper, Utah "gets it," a keynote speaker at the Governor's Utah Economic Summit said Tuesday.
Ron Pollina — president of Chicago-based Pollina Corporate Real Estate Inc. — said the Beehive state ranked second only to Virginia for its business friendly environment in the company’s annual Top 10 Pro-Business States study for 2011. Utah received the highest possible grade for the fifth year in a row.
"A pro-business environment is essential of companies that are going to grow in the state of Utah and be attracted to Utah," Pollina said. Utah is leading because of its policies that seek to not only bring in new businesses, but also help them expand thereby creating more jobs and increased tax revenue, he added.
"Every state should be doing this because we're not getting the support from the federal government," he said. "The federal government keeps making it more difficult for companies to survive."
Pollina — a geo-economist as well as an expert in corporate location analysis, real estate transactions, and state and local financial incentive negotiations — noted that the United States now taxes companies at a higher rate than any other country in the world and regulates them extensively as well. He said the federal government should work harder at developing policies that promote business expansion rather then creating an environment that stifles economic growth.
The percentage of middle-class Americans is decreasing, while China and India’s middle classes are growing rapidly, he said.
"We are losing high-paying engineering, medical, business, technology and manufacturing jobs to our free-trade partners and gaining low-pay service jobs," Pollina said. "We have a dangerously high and continually rising national budget deficit and trade deficit."
The cost of living is growing at approximately 3.2 percent per year and incomes are stagnant at best, he told the audience in the grand ballroom of the Grand America Hotel.
The credit card has replaced the savings account for unexpected or emergency needs, while the typical American family has virtually no savings, he said.
The nationwide average household credit card debt is over $15,956, he said. After paying for food, housing and taxes, the typical American family pays 20 percent of what is left for credit card debt, Pollina said.
As for Utah, Pollina said other states could learn a lot from how its policies are crafted and the long-term positive impact they have on the local economy.
Pollina said where federal assistance could be most beneficial is through the easing of regulations and tax credits for companies investing in technology. Additionally, there should be federal and state investment in employee training as well as tax credits for companies that hire U.S.-based engineers and scientists.
Instituting tort reform, providing financial aid to students pursuing engineering, math, and science degrees who remain in the U.S. after graduation, and more money for training and paying kindergarten through 12th grade teachers to improve the nation's public education system are also imperative changes that need to be made, he said.
While the national economic outlook still has some weakness, Pollina said Utah's future looks strong.
"The states that are really smart are those that are working with their existing businesses," he said. "If you can create an environment that's attractive for them to grow within your state, you're way ahead of the game."
The host speaker echoed those sentiments, saying that businesses will succeed "if they have an opportunity to have the opportunity."
Gov. Gary Herbert said government often clogs the pathway to success with over-burdensome regulation and oppressive taxation. He said Utah would continue its efforts to grow economically by instituting fair, competitive taxation and the elimination of "nonsensical business regulation."
"We are creating a microcosm of opportunity here in Utah," Herbert said. "Consequently our businesses are growing and prospering. We're building an environment for economic success second to none in America."