SALT LAKE CITY — Just once, it would be nice to learn that officials in Utah have been secretly negotiating with a company to come here, and that the state is insisting the company provide millions directly to local school districts.
That’s it, just money for schools.
The only thing they would get in return is a realization that a well-educated workforce will provide them with solid, knowledgeable and innovative workers for years to come.
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That’s not how it works, of course. Big businesses don’t want to give money away, they want to get it, and they enjoy playing cities and states off each other. Just look at what Amazon is doing in its selection site for a second headquarters.
Which brings us to Eagle Mountain, scene of the latest secret negotiation with some unnamed, large tech company that wants to build a data center.
All we really know is that the subject is a Fortune 100 company. It’s probably a data center for one of the mammoth Northern California tech companies — Google, Apple or Facebook. The tax incentive package may include about $150 million to offset the company’s upfront cost of roads and other infrastructure. It also includes an 80 percent break on tax liabilities.
If this sounds a lot like the West Jordan Facebook data center deal that fell to pieces two years ago when Salt Lake County objected, well … it’s hard to say. That one included $250 million in tax breaks over 20 years. It also was slated for land in the middle of a fast-growing urban county — a place where lots of companies might want to build without demanding so much in return.
The Eagle Mountain site is a bit more remote. I’m guessing there aren’t a lot of companies clamoring to put big things there. But the proposed tax giveaway still has people wondering: Will the cost be worth it?
We need an answer before someone signs on the dotted line.
Those wondering include at least one member of the Alpine School Board, who noted at a recent meeting that the $540,000 in leftover tax revenue the district is expected to see from the project is a tiny amount compared to the $83 million that’s needed for a new high school.
But then, it’s better than nothing. The question is, could we do better?
Two years ago, Salt Lake County Mayor Ben McAdams put the kibosh on the West Jordan deal because he worried it would be bad for taxpayers. He also was upset at the secretive nature of the negotiations.
This week he told me he is reserving judgment on the Eagle Mountain deal (which, admittedly, isn’t in his county but is in the 4th Congressional District, for which he is a candidate), and that he thinks the process there is more open than was the case in West Jordan. He said he understands the need to be able to begin negotiations in private.
“If I say we can’t start negotiating without everyone coming to review it all, no one’s going to come to me,” he said, adding that at some point, the terms of any deal have to be turned over to the public for examination and debate. Every affected taxing entity has to sign off, as is the law here. “Companies are shy of the spotlight. Governments have to shine a spotlight.”
Earlier this year, the Brookings Institution published a study on tax incentives, noting that many politicians like to resort to the “but for” argument. But for this incentive, company X would not be making this investment.”
But the “but for” game may be played in many different ways. But for a tax giveaway, a school district might be better able to keep up with the new students that come with growth. But for tax incentives to one company, its competitors would be able to compete.
A New York Times analysis a few years ago concluded that $80 billion a year goes toward incentives to lure companies nationwide. Taxpayers have to make up the difference.
Yes, large companies do provide jobs and investments that help local economies. That’s the whole idea behind luring them to your state. But those incentives should be subtracted from that total benefit and, because we’re all taxpayers and it’s our money everyone is talking about, the discussions leading up to a final decision to grant an incentive need to be thorough and inclusive.
In a state as full of children as this one is, that especially includes a frank examination of what schools need.
Jay Evensen is the senior editorial columnist at the Deseret News. Email him at email@example.com. For more content, visit his website, jayevensen.com.