Editor’s note: prepared remarks delivered by Salt Lake Chamber President and CEO Lane Beattie are used for this post. The speech was given at the UDOT Conference.
Good afternoon… and thank you to UDOT for extending to me the privilege of speaking to you and to share the business community’s insight on the state of our economy and the important role transportation plays in it.
I’m reminded of the story of a local highway department crew that reached its job site only to realize the workers had forgotten their shovels. The crew’s foreman got on the radio and explained his situation to the supervisor. Thinking quickly, the supervisor radioed back and said, “Don’t worry, we’ll send some shovels… just lean on each other until they arrive.”
Here in Utah we are, of course, blessed with hard working road crews who define the terms “ahead of schedule and under budget.” We’re also very fortunate we have been able to keep them busy.
Not everyone in our state has been so fortunate. This morning, nearly 100,000 Utahns woke up and began the process of looking for work. Our economy in this state is creating jobs. We have created over 33,300 so far this year. But that is not enough. Our unemployment rate remains unacceptably high.
These are challenging times for our nation. Our economy is struggling to recover from the most severe economic downturn since the Great Depression. Looking around the room, I dare say it is the worst we’ve experienced in any of our lifetimes.
The national economic outlook is marred by uncertainty. We are hamstrung by a lack of confidence and we are desperately searching for economic leadership.
Here in our state, we have been a relative safe harbor in the raging economic storms. Undoubtedly, we’ve felt the impact of the downturn, but we have been shielded from the full force.
I mentioned our job creation numbers; our job growth in Utah is two and a half times the national average.
Picture, if you will, a boat navigating rough waters. The national ship has small oars—barely the size of spoons. And those manning the oars refuse to work together; they have no rhythm as they paddle. There is no captain sending out clear orders on how to move the boat to its destination and it is subsequently tossed by the waves.
Now compare that scene to our state. Our boat has larger oars like fiscal prudence, Downtown Rising and international exports. Best of all, we paddle in sync and in the same direction. Utah’s secret sauce is collaboration. We work well together. Finally, we have an economic captain in Gov. Herbert who has set a clear vision and given clear direction.
Gov. Herbert’s economic track record is stellar. Just listen to the marquee names … Adobe, Goldman Sachs, ATK, Litehouse salad dressing, EA Sports, Pepperidge Farms, eBay, ITT Corporation, Overstock and Merit Medical, just to name a few.
Utah is prosperous because of great economic leadership. That is why Utah is the envy of other states in this nation.
So what is our roadmap for success? Transportation is a critical component.
The rest of the nation drives on dilapidated roads and under crumbling bridges and highways. In Utah, we are constantly improving our transportation system and investing in the infrastructure we need to grow.
One of the top economists in the nation, Moody’s Mark Zandi, noted earlier this month that the U.S. invests less than $300 billion in public infrastructure annually. That’s one third of what we spend on defense and only two percent of GDP. By way of comparison, Utah spends just over three percent of the state’s $94.9 billion personal income—a full percentage point higher than the rest of the country.
Zandi says this historically low level of investment has led to deterioration of roads, airports and other vital resources. He believes what we know to be true in Utah already: increased infrastructure spending is good economic policy in both the short term and the long term.
In Utah, we’re building 70 miles of rail in seven years. Folks in Davis County, where I live, enjoy less-congested freeways because of Legacy Parkway and the FrontRunner sharing the burden of our rush hour traffic on I-15.
And of course, we have the largest state-funded public works project in the history of the state in the I-15 CORE project in Utah County. I should also point out, even though I-15 is a federal interstate, every penny required for the work that is underway right now is coming from Utah’s pocketbook—not from federal funds.
Zandi also points out increased federal funding is the fourth highest fiscal stimulus multiplier. For every dollar we put in, we get back $1.44. If you can make that trade, do it.
Utah’s economy is out-performing the rest of the nation and I believe there is a direct correlation between that fact and the fact that we have done a much better job investing in our infrastructure.
Utah’s economic history demonstrates that while Utah can outperform the nation for a while, we can’t do it indefinitely. Ultimately our fortune is tied to the nation’s economic performance. There is no scenario where we succeed over the long term alone.
So the question must be asked, what can we do to sustain a strong economy here in our state?
Nearly one year ago, we at the Salt Lake Chamber introduced what we call The Utah Jobs Agenda. It is a 10-point, private sector plan to create 150,000 jobs over the next five years. Now, we gave ourselves a little time to build some momentum. We didn’t just divide 150,000 by five and set a goal of 30,000 jobs per year. Our first year goal is 18,000 jobs. So we are ahead of pace. But we need to pick-up the pace.
As I mentioned, there are 10 points to The Utah Jobs Agenda, and today I would like to focus on three of them, in particular. These three are shaping up to be an economic Triple Play, if you will.
The first part of our Triple Play is Economic Development. The entire point of The Utah Jobs Agenda is to create jobs—and in creating jobs we strengthen our economy. We must attract businesses to our state and we must help those businesses that started in our state, grow in our state.
We believe low taxes, reasonable regulations, top-notch infrastructure, a world-class workforce, and well-managed and limited government create the environment for economic success.
The second part of our Triple Play is education. To attract and fill the jobs that will propel the Utah economy, we need to offer a workforce that is second to none. In education we have set clearly defined goals. We want 90% of all third graders in our state reading at grade level. We want 90 percent of elementary school students in our state to be proficient in both reading and mathematics. And we want two-thirds of all Utah adults to hold a college degree or skilled trade certificate by the year 2020.
The final part of our Triple Play I would like to discuss today is transportation. A first-class infrastructure is an important part of economic development.
At the Salt Lake Chamber we firmly believe economic prosperity requires efficient transportation systems. The efficient movement of goods and people—the business you are all in—saves money and strengthens our businesses. We support a vibrant transportation system that facilitates the success of business.
We believe in disciplined planning and investment. State and local government and business leaders have shown wisdom in planning for funding roads, highway, transit and air traffic system in Utah. We must not let the fruits of our past planning and funding efforts lull us into passivity. Gridlock is not an option. Continued planning and funding efforts are necessary to maintain and improve our systems.
If there is a silver lining to the economic challenges we face it is that now is a great time to invest. We benefit from incredible bonding terms and materials are affordable.
Now, education and transportation may seem like an odd pairing. Unfortunately, I am often asked which is a higher priority. I want to speak clearly today… the choice between education and transportation is a false choice. Neither is more important and neither is less important.
In fact, if education and transportation were to work together… if they were to stand shoulder to shoulder and make their case—that would truly be a powerful combination.
Education is an important element for the future of our state economy. It requires more than lobbying; it requires a movement. The Chamber has worked to bring together a wide and strong coalition in support of the education goals we must meet in this state. The movement is called Prosperity 2020. Across our state, 14 chambers of commerce and many other business and community groups have signed on in support.
To meet the transportation needs of our state, we need to do more than we have in the past. The challenge we face requires its own movement and one similar to education. Today, it is my pleasure to announce the Salt Lake Chamber Transportation Task Force has voted unanimously to organize a multi-year campaign to advocate investment and innovation in Utah’s transportation system. Today, I’m announcing the formation of the Utah Mobility Coalition.
The mission of the Utah Mobility Coalition will be to develop the mobility infrastructure for the 21st century economy and to strengthen the knowledge of all parties involved in transportation investment decision-making.
We are committed to the success of the Utah Mobility Coalition. I have asked our COO, Heidi Walker, our Executive Vice President for public policy Natalie Gochnour, our new head of government relations Wesley Smith, and our communication director Marty Carpenter to redouble their efforts to enhance our transportation advocacy.
But a movement of this magnitude needs something more. It requires a leader with vision, with experience and with an understanding of the issues facing our transportation partners.
Robin Riggs is a man I consider a trusted colleague, a valued counselor and, most importantly, he is the right man to lead the Utah Mobility Coalition.
During his eight years at the Chamber, Robin played a critical role in our public policy success. Today Utahns in Davis County enjoy a swifter commute; TRAX and FrontRunner move thousands across the previously-congested Wasatch Front; and relief is coming to Utah County. These transportation projects–and the economic boost they have provided to the thousands of engineers, road builders and others–are a result of Proposition 3, a ballot initiative passed in 2006.
The business community recognized the importance a vastly improved transportation system would play in our state. Making it a reality was no small feat.
In a matter of just five months—a remarkably short period of time—Robin helped change state law to allow for a local option sales tax, he helped convince three county commissioners to add the issue to the ballot, he raised money for a public awareness campaign and he lobbied to get the measure passed. Prop. 3 would not have been a success without Robin Riggs.
The Chamber will continue to benefit from Robin’s strong relationships on Capitol Hill and his vast institutional knowledge. Allowing Robin to hone in on a single issue—and one as important as transportation—will be a benefit to the long-term economic vitality of our state.
Robin has always succeeded in his professional endeavors, and I have no doubt this next chapter of his career will bring the same level of success.
To be successful, Transportation must meet the level of commitment shown to other endeavors like education I’m talking about raw financial commitment to support an important economic cause.
In the five years since the Chamber made Proposition 3 a reality, we have seen a number of transportation businesses allow their Chamber memberships to lapse. In order to help you, we need you to not only be a member of Utah’s largest business association and the Utah Mobility Coalition, we need your to increase your level of involvement and financial commitment. We are here to help you succeed, but we cannot do that without your financial support.
I always want to make this easy for you so I’ve brought Daniel Seelos along with me. Daniel, where are you? Daniel will be in the back of the room to explain the benefits of Chamber membership and to encourage your participation in the Utah Mobility Coalition.
You may know the story of a kindergarten teacher who was observing her classroom of children while they were drawing. She would occasionally walk around to see each child’s work.
As she got to one little girl who was working diligently, she asked what the drawing was.
The girl replied, ‘I’m drawing God.’
The teacher paused and said, ‘But no one knows what God looks like.’
Without missing a beat, or looking up from her drawing, the girl replied, ‘They will in a minute.’
Every great movement requires a vision. Yesterday, John Nojrd laid out the core principles UDOT follows:
-Strengthen the economy
John is a man of vision and a great leader. We are fortunate to have him lead UDOT. The vision we pursue collectively will take a collaborative effort. Let me share with you some of the points of my vision for transportation in our state.
First, we must eliminate congestion. We must make and keep Utah’s roads free of economy-killing, energy-wasting, pollution-producing congestion. The Crossroads of the West must be a place where traffic flows freely, where we make good time delivering goods and where people can go about their business.
Second, we must maintain what we have worked to build. Since 2006, we have invested heavily to bring our transportation system to an enviable level. We must not slow our efforts. Maintenance is as key of an element as is construction. We can pay now or we can pay a lot more later. The prudent path is to pay now to maintain what we have worked so hard to build.
Maximize transportation options
Third, we must maximize our transportation options. We must continue with our nation-leading commitment to public transit. Trains have long been a part of our state transportation system and ridership levels show how popular it is with thousands of Utahns. Within the next few years, we will open a TRAX line to the airport and we will add a FrontRunner line to Utah County. Looking further down the track, we will need a mountain transportation system that matches the quality of our skiing—it must be the greatest on earth.
We need to complete the Mountain View Corridor, and we need to get started on rebuilding the airport. The Chamber’s involvement with the airport dates back as far as 1920 when we aided in the improvement of the landing field and hangar.
Salt Lake City International Airport is in need of a $1.8 billion expansion. The facilities are aging, and there are earthquake risks and traffic choke points between terminals B and C. The airport is one of the most significant facilities we have when it comes to our economic strength.
The airport serves eight airlines and their affiliates. Most importantly, it is a Delta Air Lines hub. Delta alone operates around 570 flights per day here. Our airport is the 25th busiest in the nation and the 62nd busiest in the world. As much as we love and welcome the skiers and visitors to our national parks, business leaders, foreign leaders and dignitaries and dealmakers come to our state—and they need our airport to get here.
Most importantly, upgrading the airport would create 1,700 jobs. We simply cannot afford to ignore the impact the airport has on our economic performance.
There is no shortage of projects we need to tackle. The question is how do we pay for it all?
The federal government must reauthorize the federal highway program and the funding for it. We also need to consider proposals to eliminate the federal gas tax so states can keep the money and manage it to meet their needs.
The Chamber has long been an advocate of raising the gas tax. Normally, chambers aren’t known for their support of tax increases. So we prefer to call this one a user fee. That’s really what it is. We believe that, whenever feasible, those who utilize and benefit the most from government services, such as infrastructure, should pay for them.
Economists agree the most efficient and fair tax policy connects the tax to the consumer in the form of user fees. Motor fuel is metered at the pump so transportation funding can be tied to usage through the gas tax. It’s efficient because the government service is tied directly to consumption. It’s fair because those who use the service pay for it. It’s easy to administer and it’s transparent because you see the tax every time you fill up your tank.
Utah’s gas tax has not been increased since 1996. Ours is a fixed per-gallon tax, so it has not kept pace with inflation. It should be indexed. We love more fuel efficiency in cars. But per-gallon taxes, combined with more fuel-efficient cars, means vehicles use the roads just as much while paying less for maintenance, repair and construction. As a consequence, state decision makers have augmented transportation funding with general sales tax revenues to meet our needs.
We continue to support an indexed fuel tax to fund vital transportation projects. Simply put, user fees are the most fair and transparent method of taxation.
We also need more transparency and simplicity in our transportation funding. I believe that will help increase transportation funding. As many of you will recall, last year there was an earmark passed for transportation that was subsequently vetoed by the governor and then the veto was overridden by the legislature. It was an unfortunate series of events.
The most populous areas of the state are projected to grow by one-and-a-half times by 2040. If more transit lines and highways are not constructed, time stuck in congestion will be six times longer than current delays. We want to have the strongest economy in the nation and that means we must maintain a superb transportation infrastructure.
Over the years earmarks have piled up. It’s time that we consolidate confusing and complex sales tax earmarks.
So we face some challenges. That also means we have a tremendous opportunity. Utah’s economy cannot reach its full potential without continued investment in our transportation infrastructure. That requires a movement. It may seem like a large mountain to climb, but we can do it together.
On this date, November 16th, back in 1959, The Sound of Music made its debut on Broadway. I love the inspirational number, “Climb every Mountain.”
Climb ev’ry mountain
Ford ev’ry stream
Follow ev’ry rainbow
‘Till you find your dream
A dream that will need
All the love you can give
Everyday of your life
For as long as you live
The dream we share is to firmly establish our state as the best in the nation. We have so much to be proud of. We have much yet to do
Let us commit today, to redoubling our efforts, to forging new and stronger partnerships, to doing the extraordinary.
Thank you very much.