“I don’t need a tax cut.”
— Mitt Romney
Say you get to the end of the month and find yourself with more money than you needed for rent and food and clothing and transportation and health care and student loans and streaming services and taxes and liquor and pet treats.
It could happen.
What’s the first thing you might do with the money?
It almost certainly would not be to give the excess income back to your employer. Not only would it be unlikely to make much difference to the boss, it would also make more sense for you to pay down debt or sock it away for a time, perhaps very soon, when your income does not exceed your expenses.
There are more than a few businesses that claim to be frugal and “pass the savings on to you,” but it still makes more sense for a profitable enterprise to pour any excess revenue back into the business, hiring, boosting benefits, expanding, upgrading facilities and IT. Stuff like that.
It’s called leaving money on the table, and it is generally thought to be a foolish act, for an individual or a business.
Or a state.
The 2021 general session of the Utah Legislature begins Tuesday. Despite all sort of predictions of woe and collapse, understandable in the pandemic, Utah now reasonably expects to have $1 billion or more in revenue it hadn’t expected.
A lot of lawmakers are in their knee-jerk phase of calling for tax cuts, something that makes no more sense than a reflexive call for tax hikes. Or less sense, when there are so many needs before us.
A welcome development is that new Gov. Spencer Cox and House Speaker Brad Wilson, in separate meetings with The Salt Lake Tribune editorial board recently, both used the phrase “Opportunity for all,” in describing their priorities. That’s different from the main thrust of so many legislative sessions past, when the priority seemed to be making sure that we didn’t spend too much on education or, heaven forbid, make health care accessible to everyone.
Wilson and Cox also expressed a desire to take a new approach to the matter that former Gov. Gary Herbert and other elected officials often described as their top priority — economic development.
Utah’s style of business-boosting is already better than those of many states, as we use what’s called a “post-performance” approach. Generally that means that if we dangle tax breaks before a corporate location-hunter to entice them to move or expand a business here, the check doesn’t get written until after the business has created X amount of jobs paying Y salaries.
Still, the governor and the speaker seem to realize it makes more sense to the taxpayers, and to the kind of businesses that any state should want to attract, to promise those relocating and expanding enterprises that, rather than just giving them a kickback on their tax bill, we will assure them that the taxes they pay will go toward things that will make the CEOs, CFOs, HR directors and everyone else happy that they came. Or stayed.
Our top elected officials seem to realize that, with all those construction cranes on the Salt Lake City and Lehi horizon, the best return on investment for corporate citizens and regular taxpayers alike is not luring still more people to move here but improving services, quality of life and economic opportunity for those who are already here.
Creating jobs that current Utahns aren’t properly educated for means we have to import new people to fill those new jobs. Then we have to build new apartment complexes, subdivisions, schools, highways, fire stations and train tracks to accommodate the new people, while the folks already here get priced out of decent housing and sit in gridlocked traffic on the way to take their children to their overcrowded schools.
Utah doesn’t need to encourage growth. It needs to better handle it. That growth has a chance of paying for itself, but only if we resist the siren calls of economic development giveaways and tax cuts.
George Pyle, editorial page editor of The Salt Lake Tribune, should be reminded that his paycheck now comes from a nonprofit organization and maybe he should donate back some of his salary.