Democratic gubernatorial candidate Peter Corroon is proposing a $4,000 tax break for companies that create new, good-paying jobs, and refocusing business incentives and government programs to help Utah businesses.

It was part of Corroon's 39-page "back to basics" plan to kick-start Utah's job market, which has shed 72,000 jobs over the last two years months and currently has a 7.2 percent unemployment rate.

"With the highest unemployment rate we've had in 26 years, the time to act is now," said Corroon, who is currently mayor of Salt Lake County.

Under Corroon's new-jobs tax incentive, unveiled at a Wednesday news conference, the state would pay the federal tax for the new employee, just under $4,000 on a new $50,000-salary worker. That amount would be offset by the state taxes paid by the new employee, meaning the program would be revenue-neutral, according to the Corroon campaign.

The goal is to stimulate new hiring and also to boost Utah's wages, which are among the lowest in the country.

President Barack Obama signed legislation in March that exempts companies that hire new, previously unemployed workers from paying Social Security taxes on those workers and offers a tax credit if they are employed for one year.

Corroon said he would require employers receiving money from the state to hire Utah workers, and firms that win state contracts would have to largely subcontract with Utah businesses.

He also said he would support ending "corporate welfare," state incentives to companies that don't need incentives to relocate here, are not creating new jobs or are competing with existing Utah companies.

"The good news is Utah has the culture and people to grow these companies," Corroon said. "The bad news? Instead of appreciating and capitalizing on Utah's natural advantages in the small, the innovative, the 'here,' our state leaders have focused too much time on the big, the outdated and elsewhere."

Corroon said he would seek to restore roughly $200 million in cuts from programs that he said would be instrumental in job growth. That includes $48 million cut from the Utah Science, Technology and Research initiative, $93 million cut from the Department of Workforce Services, and about $13 million cut from Utah Applied Technology Centers, a baccalaureate program and the office of tourism.

Corroon said that money would come from finding efficiencies elsewhere in government and by ending "corporate welfare," but he said there would be "no new taxes."

Gov. Gary Herbert's spokeswoman defended his track record on economic development, adding that it is the top priority of the administration.

"Under Gov. Herbert's leadership, jobs are being created in Utah," said spokesman Angie Welling. "In Fiscal Year 2010 alone, corporate recruitment incentive offers from the Governor's Office of Economic Development have resulted in the creation of 3,386 jobs, nearly $3 billion in new state wages, some $250 million in capital investment and $260 million in new state revenue.

As one example, Welling pointed to the announcement last month that Petersen Inc., a Utah company that does custom steel fabrication and machining, is expanding operations in Weber County, with plans for 53 new full-time jobs that pay 125% more than the average county wage.

Welling said economic development isn't about diverting money from other critical areas or raising taxes, but about "creating an environment that allows small businesses to flourish and attracts new business to the State, while fostering innovation and ensuring that Utah's workforce is prepared for the jobs of the future. Gov. Herbert is working every single day to make that happen in Utah."