This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated.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.
Why should hardworking Utah taxpayers be on the hook for millions of dollars to help prop up wealthy corporations?
That's a question we deserve an answer to after lawmakers passed a bill earlier this month to help lure an "unnamed" company to the state. Not only do our lawmakers want us to pick up the tax burden for the special deal, but they also wouldn't tell us who it's for. This is the worst possible kind of corporate welfare.
The deal had actually been in the works for months — a similar piece of legislation failed to pass during the regular legislative session — but the "unnamed" company got special treatment from some lawmakers, who kept the deal secret.
It was only recently revealed in news reports that the bill was written in an attempt to lure tech giant Facebook to our state. Now, on top of the sales tax exemption, it appears that Facebook will also receive property tax credits from Salt Lake County, the city of West Jordan and the Jordan School District.
The value of the secret tax deal? An estimated $240 million.
Consider that the Jordan School District will return to Facebook $94 million of the $111 million tax dollars the data center will generate for the district over the next 20 years. In essence, we are asking schoolchildren to pay the check on this deal.
To make matters worse, taxpayers have been kept in the dark about how their money would be spent, even though lawmakers have been in discussions for over a year.
Now that taxpayers know they will be on the hook to pick up the tax burden for a multibillion-dollar company, they should push back on the effort, especially since they don't get much benefit from it. It's a handout for the wealthy and the well-connected that comes at the rest of our expense. No wonder Salt Lake County Council member Richard Snelgrove said in a council meeting, "To me, it comes down to this being a $240 million piece of corporate welfare, I just don't think it's fair to the people of Salt Lake County."
The fact of the matter is that even the flimsy justification politicians usually offer for corporate welfare — job growth — simply isn't relevant here. Once the data center is complete, it is expected to bring only about 80 to 100 jobs to Utah.
But this shouldn't come as much of a surprise. Other states that have offered similar tax breaks to data centers have seen that such incentives are not worth their salt.
Case in point: North Carolina. Several years ago, the state offered $46 million in incentives to Apple for a data center. Local officials helped sweeten the deal by offering to cut the company's property and personal taxes by 50 percent and 85 percent, respectively. The result of those tax dollar-backed efforts? Apple brought just 50 full-time jobs to the area.
Economists and researchers for years have cautioned about the scant effects of similar handouts.
And yet Utah lawmakers ignore these warnings.
Then again, our lawmakers have a certain fondness for handing out our hard-earned tax dollars to wealthy corporations in attempts to lure them to the state. Since 2006, Utah has doled out nearly $1 billion in similar economic incentives — all at the taxpayer's expense.
But this amounts to corporate welfare, plain and simple. Our local leaders are picking the "winners," even though the rest of us — small-business owners and taxpayers — end up as the losers.
The simple fact is that corporate welfare and secret deals are not going to help our state's economy thrive. Rather than providing special favors to certain companies, our state leaders should provide tax cuts and regulatory relief across the board, for all businesses. A level playing field would give equal relief to the hardworking Utahns who need it.
At the end of the day, lawmakers should not be gifting out our tax dollars to wealthy corporations.
Evelyn Everton is Utah state director of Americans for Prosperity.