Utah lawmakers moved Monday to exert more control over the composition of a board that would evaluate bids to relocate the Utah State Prison and how to pay for it.
Although time ran out before a final vote on SB72, senators scrapped a provision that would allow the Prison Land Management Authority to collect up to 50 percent of sales and property tax revenue generated by redeveloping the prison's current 690-acre site to build a new facility, demolish the old one and provide infrastructure for new development. One senator characterized that as a "gift" to project bidders and out-of-step with the normal process for approving tax increment financing; another said it amounted to an "entitlement."
Sponsor Sen. Scott Jenkins, R-Plain City, said revenue sharing was one of the "tools" for funding a new, $550 million to $600 million prison outside the Salt Lake Valley's urban corridor. Other funds would come from selling the current prison acreage for $100 million to $140 million; annual operational and labor savings of $17 million to $20 million; and deferred maintenance of about $3 million a year.
The Governor's Office of Economic Development has estimated that in time, commercial development at the site could create up to 40,000 jobs and generate up to $20 billion in tax revenue over 20 years an economic impact that justifies moving the prison.
On Monday, Jenkins called the tax increment a "stop gap measure" and "precaution" in case the project didn't reach its "financial goals."
But Sen. Mark Madsen, R-Eagle Mountain, said the project should hinge on its ability to be self-funding through savings rather than tax revenue. A project developer could still ask Draper for tax support, but it would not be automatic.
"If it doesn't pencil without this tax increment funding, I really don't believe we should do it," Madsen said.
Sen. Stuart Reid, R-Ogden, also questioned the financing, saying the proposal pitted Draper City's interests against those of the state.
"There is absolutely no way the local taxing entity is going to support tax funds generated by this project going to build a prison," Reid said. "The tax increment is not enough to do the three things the sponsor just indicated needed to done ... can't be done, it's not enough, it won't work."
Senators deleted language that allowed the governor to appoint eight of the 11 executive board members. The board's structure would now mirror that of the committee that gave the project an initial green light in December. The governor would appoint four executive board members and, if used, four members of a subcommittee. The Senate president and House speaker each would appoint two members one of whom must be a Democrat. Draper City would appoint two members while the Utah Association of Counties would have one seat.
The Senate also amended the bill to ensure the current prison site would not be sold, exchanged, leased or optioned without approval from the Legislature and set time frames for requesting and accepting bids; the board would select a proposal to recommend to the governor and Legislature by December 2013.