Senate Committee Approves Bill Tightening Reigns on GOED

A less than flattering state audit of the Governor's Office of Economic Development is prompting some changes on Utah's Capitol Hill.

GOED offers tax incentives to businesses who either expand or relocate to Utah as long as they bring a number of high paying jobs to the state. The audit criticized GOED for manipulating those numbers for companies that don't quite reach their goals. 

SB 179 sponsored by Sen. Brian Shiozawa, R-Cottonwood Heights, sets some concrete numbers for what constitutes a "high paying" job. Under the proposal, that would mean jobs that meet 110% of the average wage of a community, minus benefits like healthcare. 

"We didn't want to set a concrete number for the whole state," said Shiozawa. "If we did that, it might favor the Wasatch Front and penalize rural areas."

GOED Executive Director Val Hale says a lot of the issues raised in the audit came from vagueness in statute.

"This concrete definition of 110% of the average wage gives us some clarity," says Hale. "Not adding in benefits to the definition gives us enough freedom so that we aren't playing with our hands tied behind our back. We are trying to raise the bar and bring in high-paying jobs."

SB 179 also requires GOED to audit a business that receives tax incentives after three years instead of five to make sure they're living up to their end of the bargain.

"We are competing with other states in the West to bring in companies like Adobe. We have to offer incentives to bring them in, but we have a responsibility to the taxpayer to make sure this business has done its job," says Shiozawa.

The bill also makes the position of executive director one that is appointed by the governor with Senate approval.

The Senate Economic Development and Workforce Services Committee unanimously approved the legislation on Wednesday morning. It now heads to the Senate floor for consideration.