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Op-ed: Fund Utah schools by ending corporate incentives

Published November 5, 2016 3:00 pm
This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah's state legislators may not convene until January, but key members are already setting the agenda for the packed 45-day session. Groups like Education First are laying the foundation for a concerted effort to push a personal income tax hike, allegedly needed to boost the state's education funding.

But if lawmakers are really concerned about funding schools, there are better paths to take. The best would be to start gutting corporate welfare handouts that enrich a lucky few at the expense of the rest of us — and our schools.

Utah has a host of corporate welfare programs at both the county and state level. At the county level, many local governments grant property tax exemptions to corporations, which subtract money that would have otherwise gone to school districts.

In Orem, for example, the city council approved a $63 million tax benefit to developers renovating the shopping mall. About $44 million of the $63 million would have gone to fund the local school district. That could have built four schools, as estimated by Hans Anderson, the sole member of the council to oppose the taxpayer-funded project. As he put it, "The mall is the wealthiest landlord in the city. Why should we give the wealthiest landlord a 75 percent discount on their property taxes for 20 years?"

But Orem is far from the only city willing to subsidize corporate profits. In Salt Lake City, one of the many corporate beneficiaries includes the Larry H. Miller Group, the owners of the Jazz's Vivint Arena. This past summer, the city granted them up to $22.7 million in tax credits for a $110 million facelift on the building.

Other big-name companies have recently tried to get in on these million-dollar bonus packages. In August, West Jordan's city council came close to handing over as much as $260 million in tax rebates to Facebook for constructing a new data center in the city — and only creating as few as 50 new jobs.

Fortunately for Utah's students, the deal didn't ultimately come to fruition. But these are the kind of projects that pepper the state, and deduct tens of millions of dollars Utah's school districts would have received.

In 2015 alone, counties doled out $166 million worth of tax credits to industry favorites across the state, according to the Utah State Tax Commission. School districts would have received nearly $89 million, but for these special carve outs. All so that hand-picked corporations aren't subject to the same taxes as everyone else.

And that's just the money lost from local crony schemes. The state-wide corporate welfare is even more detrimental to Utah's schools, especially because a majority of school districts' funding comes from the state. There are all kinds of corporate goodies – including tax credits for film makers, hotel developers, recycling zones, green energy programs, and outdoor recreation.

Among the beneficiaries of these corporate handouts are global giants such as Goldman Sachs, the Royal Bank of Scotland Securities Inc., and ITT Excelis, an aerospace and defense contractor. These companies can and should stand on their own merit, not atop a footstool funded by Utah families.

Other previous recipients of taxpayer benefits include the producers of the movie "Bigfoot vs. the Nazis," and a number of local diners and eateries that upgraded their spaces to accommodate more guests. But every dollar given to these private companies is a dollar that could have been spent on projects that actually benefit our state.

All told, from 2005 to 2014, the state's corporate welfare handouts totaled over $844 million. That's money that could have funded education, rather than politically favored industries.

In just a few weeks, some lawmakers will tell us that a vote against a tax increase is a vote against our students' success. But if education is really their priority, state legislators can start by curbing the millions of spending in corporate welfare. That should be an easy lesson for them to learn.

Evelyn Everton is the Utah state director of Americans for Prosperity.






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