Lawmakers moving to ‘unwind’ USTAR

USTAR, an at-times controversial high tech public/private development program mainly located at the University of Utah and Utah State University, will be restructured and partially defunded in a bill soon to hit the Legislature.

Some of Utah’s biggest high tech operatives support USTAR, so this is likely to be a controversial move.

Rep. Curt Webb, R-Logan, is co-chair of the budget subcommittee that oversees the USTAR budget.

He tells that the program won’t be completely defunded this coming budget.

But big changes are coming, including “freezing” spending in a number of areas while lawmakers take the interim to study USTAR, and ask its bosses to justify what it does and how it operates.

Currently, USTAR is getting $22 million from the state, with some ancillary spending pushing the 2018-2019 budget to $29 million.

However, if the restructuring bill passes, says Webb, there could be much less spending coming, with the possibility that the program is ended completely down the road.

In fact, says Webb, GOP leaders originally wanted to just scrap USTAR – turning its current research/grant programs over to the two universities and/or other related programs.

But Webb and others argued for what he terms a “soft landing” – providing USTAR with some basic funding over the next 12 months and allow the program and its supporters to come to lawmakers and justify its continuation.

Sen. Jerry Stevenson, R-Layton, says lawmakers felt it was time to gradually “unwind” USTAR.

“We’ve spent nearly a quarter of a billion dollars over the past decade on the project,” he says. “We’re getting good research out of them, but there’s a sense that we’re not getting the return on investment that we should be.”

Stevenson says USTAR was modeled on a similar program in Arizona. That state has since discontinued their program, and there’s a consensus building it’s time for Utah to do the same.

“It’s going to take some time. We have a lot of contracts and research we need to untangle,” he says.

Some of the items in the bill, which has not yet been made public:

  • USTAR “principal researchers” will continue with their contracts and programs. Those are mostly at the two universities.
  • The two main USTAR-owned buildings at USU and the U of U will be turned over to the universities to own and manage.
  • Ongoing grant programs will be limited until a review of their operations is conducted.

Those under contract will run, and if USTAR bosses can show their value could go on for some time, either inside or outside of the universities.

  • So-called “support pieces” of the operations will be frozen for 12 months, with USTAR being asked to evaluate and justify them.
  • Some of the frozen programs could be re-funded, if they are justified.

Overall, said Webb, about $6.5 million in USTAR funds will be taken away or frozen in the bill, reducing the $22 million by that amount.

Several years ago USTAR was in real trouble after its boss and top people were found to be inflating its job-creating numbers – showing USTAR was having a greater effect on Utah’s entrepreneurial high tech industry than it really was.

Changes were made, and Webb says that today he believes the management of USTAR is doing well.

The shake-up now, he said, is that a number of newer GOP legislators – not around when USTAR was created – are questioning if the state should even be in the business of high tech research and development, even investing in start-ups.

The idea is that some non-USTAR tech firms feel the state is giving their competitors unfair economic and other aid.

“Should the state even be doing this?” asked Webb.

He said some “essential” pieces of USTAR may remain, or if USTAR bosses can justify, some or all of the money returned.

But it appears USTAR’s organization will be greatly changed one way or another.