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Utah Governor’s Office of Economic Development celebrates promise of new jobs during pandemic

By Ryann Richardson daily Herald - | Jun 18, 2020

The Utah Governor’s Office of Economic Development announced record highs during Fiscal Year 2020 with hopes to keep up the momentum despite the coronavirus pandemic and recession.

The Utah Governor’s Office of Economic Development promotes the expansion of business, tourism, outdoor recreation, rural economic development and more. Throughout the state, the organization currently administers about 16 programs in Utah.

Through its Economic Development Tax Increment Financing tax credit program, the Utah Governor’s Office of Economic Development secured a total of 13,000 new, high-paying jobs.

The jobs were created by 21 companies that participated in the EDTIF program. These companies are collectively projected to bring about 13,264 jobs, over $1.1 billion in capital investment, more than $590 million in state revenue, and over $9.7 billion in new wages.

In order to qualify, jobs in the area must pay employees 110% of the average county income, which in Utah County is $44,289. This means any Utah County based companies participating in the creation of the over 13,000 jobs must have a starting salary of at least $48,718.

Val Hale, executive director for the Utah Governor’s Office of Economic Development, said in many of the jobs that have been created, companies are paying close to $100,000 salaries.

“The 13,000 are not going to show up all at once,” Hale said. “That’s 13,000 jobs over the life of the incentive program. Those are 13,000 new jobs that will be coming to the state over the next few years.”

Created in 2005 by the Utah Legislature, the EDTIF program is administered by the Utah Governor’s Office of Economic Development and is meant to encourage companies with high-paying jobs to remain in and attract other businesses to the area through incentives.

Through post-performance tax credits, the EDTIF program entices out-of-state companies looking to come to Utah or Utah businesses considering to move jobs out of the state to remain in Utah as a way to create more jobs for Utah residents and increase revenue, Hale said.

When companies are looking at potential locations in Utah, administrators can go to the Utah Governor’s Office of Economic Development and report to representatives how much in-state revenue they plan to generate over a time of 7-20 years.

The EDTIF program then allows the office to partner with the new company to give a portion of the in-state revenue back to the business once they have fulfilled criteria laid out by the office of economic development.

“The taxpayers don’t pay any money until the companies have paid into the tax system, and then they get a percentage of that tax money back,” he said. “If they don’t pay in what they said they’re going to pay in, then they don’t get any money back.”

Companies can earn a refund of up to 30% of the state taxes they paid for up to 20 years.

In recent years, the EDTIF program has averaged a refund of up to 20% of state taxes companies have paid up to seven years, Hale said. Of those incentives, two out of every three are given to Utah companies in an effort to keep jobs in the state.

Compared to incentive programs in other states, the EDTIF program incentives are not as big, he said, but it has worked for Utah residents.

“Our’s is a more conservative approach, but it’s worked very well for us,” he said. “We’ve been able to keep a lot of jobs here in the state, and we’ve been able to attract a lot of jobs here from out of state.”

Programs like this are so important to Utah, Hale said, especially in times like these. By keeping companies in the state and recognizing the amount of jobs they provide, the EDTIF program is bringing a variety of high-paying jobs to Utah residents and raises the average salary in the state.

With a record number of employees across the nation, Hale said it’s programs like EDTIF that keep the average Utahn afloat.

“There was a lot of discussion as early as December and January that our economy was growing too fast and that the growth was negatively impacting the state,” he said. “We were starting to engage in those discussions, but suddenly with coronavirus, our unemployment is now up around 10% and people are clamoring for jobs again.”

While the coronavirus pandemic has brought about a new perspective on the ever-growing number of jobs coming to the area at a high rate of speed, Hale said it has also had negative impacts on the EDTIF program.

Hale said the Utah Governor’s Office of Economic Development is expecting a lull in job creation during Fiscal Year 2021 due to the economic crisis brought about by the pandemic, however, companies across the nation are still expressing interest in planting roots in the state.

Even through a recession, Utah has advantages over other states, he said, which make the state a desirable place to grow a company.

These advantages, Hale said, include Utah coming out of the pandemic and recession easier than other states, the openness the state government has had with businesses and residents while addressing the pandemic, and people have begun to think of Utah as a relatively safe state considering the recent violence across the nation.

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