The Utah State Legislature passed some significant measures this year that will have a long-term impact on our economic prosperity. I had the opportunity to chat with Sen. Stuart Adams about some of the most prominent measures from the legislative session.
One measure created an inland port authority, which will be a catalyst for the development of an international trade hub in Salt Lake City. The inland port authority would oversee the development of 38 square miles in the northwest part of the Salt Lake Valley on land owned by Salt Lake City, West Valley City and Magna.
The area would serve as a special trade zone where inbound and outbound goods would be processed, bypassing coastal ports of entry. Utah has become a significant distribution hub for the western U.S. and Sen. Adams told me the inland port would further position Utah to benefit from the global economy by enhancing the state’s excellent location for supply-chain logistics. What’s more, he expects the inland port to have a positive ripple effect on the state’s manufacturing sector and many other areas.
“In our minds, the inland port it is far bigger than any one city or county,” he said. “We see it as a statewide function with the potential for a regional impact, and that is why we wanted a state agency to govern it.”
Here at World Trade Center Utah, we are thrilled to see the inland port moving forward. Of course, as Sen. Adams explained, the inland port concept will need to be refined as we move forward. As he said, “We cannot overestimate the potential impact. It is a great step forward and we believe it is an enormous economic development opportunity.”
Other key legislative measures took aim at tax reform and education funding. Sen. Adams said the legislature passed a property tax freeze as part of a tax reform package that also lowered the state’s five percent income tax rate to 4.95 percent and gave multi-state corporations a $28-million tax break.
We cannot talk about economic prosperity without bringing education into the equation. With that segue, Sen. Adams described “a record year for education funding.” To begin with, he said the legislature gave the state’s education system a combined total appropriation equal to a seven percent increase in the weighted pupil unit. He then explained HJR20, a resolution by the legislature that would place a non-binding question on the November ballot, letting voters indicate their support for a gas tax increase of 10 cents per gallon in order to put more money toward education. While revenue from the gas tax increase would have to go to transportation, the money generated – about $120-$140 million – would free up an equivalent amount from the state’s General Fund that the legislature could redirect toward public education, thus keeping transportation funded while adding new money to education.
When combined with a five-year freeze on a statewide property tax, Sen. Adams said the measures, when fully in place, could generate approximately $375 million for Utah schools without the need to raise income and sales taxes.
“We think our low state income tax rate makes us competitive with other states, so we are hesitant to raise it,” he continued. “A gas tax, on the other hand, is a user fee, which is better tax policy.” Regarding infrastructure, Sen. Adams said a transportation measure passed by the legislature restructured the Utah Transit Authority (UTA), changing its board from the current 16-member, part-time board to a three-member, full-time board. The bill shifts state money to transit projects, raises registration fees on electric and hybrid vehicles and allows local option sales tax increases. “We all know how challenging growth can be on our infrastructure and public transit needs a greater role,” he explained.
The transportation bill gives more funding flexibility by allowing current highway dollars to be used for approved rail and bus projects. And to encourage smart growth, Sen. Adams said new criteria was added for local funding that places a higher priority on projects with good land use planning.
In all, he said this year’s legislative session was one of the most productive he has seen and we agree. It is a great day when the legislature lowers income taxes, increases funding for education, creates an inland port authority and addresses transportation challenges. Kudos to the 104 legislators who take time away from their families, work and other important endeavors to help build Utah’s prosperity.
By WTC Utah President and CEO Derek Miller