Gov. Gary Herbert says he is often asked — including recently by Vice President Joe Biden —why Utah’s economy outperforms most states. He shared the secret Thursday.
“It’s really quite simple,” he told 1,200 attendees at his annual economic summit at the Grand America Hotel. “We believe in the fundamentals and know how to execute them to grow our economy.”
Herbert outlined some of those fundamentals, including low taxes, government efficiency, living within the state’s means and saving money, and creating a skilled workforce.
But he also listed some challenges that could knock Utah off its pedestal without action, such as funding growing education and transportation needs, reducing air pollution and forming new global partnerships.
One of the fundamentals Utah executes, Herbert said, is “We don’t spend more than we take in. In fact, we save some money for a rainy day, and we don’t take on unnecessary debt. That’s why we are one of only a handful of states in America to maintain a AAA bond rating.”
Low taxes is another basic, according to Herbert.
“Utah collects the 44th lowest amount of revenue per capita in the nation. And of the 45 states that have corporate taxes, Utah is tied for third lowest at 5 percent. And we haven’t raised corporate taxes since 1985.”
Herbert said Utah works hard to be business friendly and eliminate unneeded regulations. “They are like weeds in a ditch bank. They impede the flow of commerce.”
“Business — not government — is the backbone of Utah’s economy,” Herbert added. “You [business leaders] are the ones who create the lion’s share of jobs across the state and make Utah the envy of the nation.”
He said another fundamental strength is a skilled workforce. He said Utah’s high-school graduation rate rose three percentage points to 80 percent last year. He said more students are earning college credit while in high school. And the state has a goal for two-thirds of adults to have a college degree or certificate by 2020.
With such fundamentals, Herbert said the state’s unemployment rate dropped from 8.4 percent when he took office to 3.9 percent now. He said it has the second-fastest growing economy in the nation, and won attention from many national media outlets.
“But let’s not forget that the competition out there is formidable and growing. So we need to look for ways to meet the competition,” he said, adding that includes finding ways to fund escalating education and transportation needs.
“I remain committed to strengthening Utah’s transportation system without weakening our business community,” Herbert said. “We are determined to ensure our students are prepared to help drive Utah’s economy forward.”
Also, he said Utah must reduce air pollution.
“Dirty air cuts worker productivity and raises health-care costs, imposing an additional burden on business. It also hurts Utah’s image, discourages visitors and reduces tourism revenue.”
And the governor said Utah must go after the global market — which is one reason he is going on a trade mission to Mexico next week and to Brazil later this year.
“Ninety-five percent of the world’s customers live outside the United States, and we are ready to do business with them. So I have set the goal to increase our value-added exports to $9 billion by the end of 2015.”
He said he wants the world’s investors to know, “If you are looking to expand and become more profitable, there is no better place to do that than in Utah. Our taxes are low, our entrepreneurial spirit is high, and we have a pro-business and regulatory climate that is second to none.”