He had reason to be. Eccles, GOED’s executive director, had some very good news to report. His agency, which oversees all business, tourism and film development for the state of Utah, had hit another home run. In the fiscal year that had just ended, GOED had authorized tax incentives to two dozen companies that had pledged to create a record 9,019 jobs, — 18 percent more than in the previous year, which also was a record.
What Eccles and Christopher Conabee, who runs corporate recruitment for GOED, didn’t tell the board was just as remarkable. Over the past seven fiscal years, the state has agreed to forgo $646 million in taxes in order to incentivize the creation of thousands more jobs in seven industrial sectors, including aerospace, financial services, life sciences and software development.
But whether that’s a bargain or an extravagance isn’t clear because there seems to be no national standard to measure the costs of tax incentives against their benefits. In fact in April, the Pew Center on the States issued a report saying most states, including Utah, don’t really know if business tax incentives are boosting job growth.
By the numbers, the incentives have apparently produced impressive results without exposing taxpayers to risk. Since 2006, scores of companies, including household names such as Adobe, Goldman Sachs, eBay, IM Flash, ITT and Oracle, have promised to create more than 37,000 new jobs in the state within some fixed span of time, usually five years to 20 years. Most will pay well, by Utah standards. GOED says each job must pay at least 25 percent more than the average wage of the county where it is created. In Salt Lake County, where about half of the jobs incentivized by the agency are being developed, that works out to about $55,640 a year, according to U.S. Bureau of Labor Statistics data. Salt Lake Tribune
