Utah Regents may rein in Red Zone stores, other college enterprises
Advertising for University of Utah Red Zone stores and the availability of Rice-Eccles Stadium as a wedding venue could end this summer.
Higher education bosses, reacting to a legislative audit released last week, decided Friday to consider which enterprises are violating state policy by competing with private business.
"Where we believe there are currently clear violations of the present policy, we are not sanctioning or condoning that," said Regent Harris Simmons, though Regent Robert Marquardt urged caution to prevent a rapid drop-off in sales while the Red Zone stores, for example, still have bills to pay.
The executive committee of the Utah Board of Regents will meet and take action before the next full meeting in September. Regents will also then consider changing their competition policies before Utah lawmakers may act, during the session that begins in January, to prevent colleges from encroaching into the private sector.
"We don't know yet what we're going to do," said Commissioner of Higher Education David Buhler.
The action comes after the audit found that the Regents' current policy on competition, last amended in 1997, is "outdated and unenforced."
It specifically focused on the Red Zone stores, which have sold nearly $2 million in sweatshirts, baseball caps and other merchandise since the first location opened in 2010.
It also pointed to Rice-Eccles Stadium, which hosts weddings, corporate meetings and high school dances, as well as the hotels and conference centers at both the U. and Utah State University in Logan.
Higher education institutions are generally exempt from state sales tax. Their businesses are supposed to serve their campus communities, but not advertise to or cultivate a public clientele.
The audit was requested by Rep. Jack Draxler, R-Logan, and Rep. Johnny Anderson, R-Taylorsville. It said the Utah Legislature should consider passing a law to explicitly disallow such competition and clarify sales tax policies related to sales by higher education institutions.
The audit didn't find any evidence to support an Ogden-area businessman's complaint that Weber State University stores were selling tax-exempt computers to the public.
In a response to the audit, U. vice president Arnold Combe denied the school violated any policies and cautioned "undue restrictions" could place greater financial burdens on students and their families. He added that sales of insignia merchandise help the school's campus bookstore and its Red Zone stores remain self-supporting in a time of lower textbook sales.