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Eye on USTAR

Published February 3, 2014 2:04 pm

Calculating initiative's success
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

"In the past 12 months, 30 new, exciting, cutting-edge businesses have launched as a result of the USTAR initiative."

— Former Rep. David Clark, then majority leader of the Utah House, writing in a Tribune op-ed March 9, 2008

My, how things can change in six years.

USTAR — Utah Science Technology and Research initiative — was started in 2006 with an initial state investment of more than $200 million. It was described not as an expenditure of taxpayer money but an investment in scientific research that would eventually yield billions of economic development to the state in new businesses and added jobs.

The state has invested a total of $334 million in USTAR. But now the shine has dulled a bit; legislators have quit gushing over its economic potential and are looking at USTAR with a more critical eye. As stewards of taxpayers' money, they have a duty to monitor USTAR's progress. But they shouldn't overreact to admitted mistakes USTAR officials made in dealing with a recent legislative audit.

During last year's legislative session, lawmakers received a one-page report from the former chairman of USTAR's governing authority that contained what were later determined to be inflated numbers of jobs created and a misstated "return on investment" of 313 percent.

That report, called a "promotional piece," by current governing board members, led to a legislative audit that criticized, not only the oversimplified calculations of economic progress made by USTAR but other administrative weaknesses as well.

Members of USTAR's governing authority, led by new chairman, former Lt. Gov. Greg Bell, worried about potential funding cuts in response to the audit findings. Last week they presented detailed answers to all points made in the audit and argued that USTAR is on track to meet its initial objectives, despite weathering a nationwide economic recession.

Members of a legislative economic development subcommittee, were skeptical. And rightfully so. USTAR officials have a tough row to hoe to re-establish trust, let alone the enthusiasm the initiative sparked at the Legislature eight years ago.

The governing authority rightly admits its members and USTAR administrators did not take the audit as seriously as they should have. They did not vet the promotional piece that started the inquiry, and they did not promptly supply the information auditors later requested.

But all that is beside the point, now that the board has thoroughly addressed the auditors' concerns, point by point, and explained how the numbers appeared inflated.

The real issue now is whether USTAR continues to be a good investment for Utah taxpayers. Top research teams have been hired, labs and other facilities have been built, government grant money has been spent. The startup phase is over.

Although the initiative is, by its nature, a long-term venture — 30 years is the time frame founders set — the Legislature would be right to demand some more concrete signs of progress.

Private investment will be necessary if research initially funded by government grants eventually evolves into profitable commercial ventures. What is USTAR doing to attract investors? Which projects are close to commercial viability? When can we expect more jobs to be created?

Those are questions that call out for answers.