Utah’s Focus on Economic Growth also Benefits Education

In the doldrums of summer and while the rest of the political world is fixated on Obamacare subsidies and same-sex marriage, I thought I would bring the conversation back to Utah for something really important:

Can Trey Lyles help the Utah Jazz win the NBA Championship in 2016?

Just kidding.

Instead, let’s talk about Utah’s unique approach to government — specifically, economic development — that starts at the top.

For as long as I’ve lived in Utah, gubernatorial candidates have made their major campaign theme “Education”.  Over and over I have seen campaigns based on improving education. Some wanted tax increases for education. Some wanted school choice. Some wanted smaller class sizes. All advocated for increased teacher pay. Education, education, education. That was what candidates for Governor did. All this in Utah where constitutionally Governor’s have relatively little say about the education of our children.

In large part, candidates for Governor touted education because of Utah’s Education Paradox. For decades (maybe since statehood) Utah has been at the bottom of America for per pupil funding. The paradox is that there are more children per capita in Utah than anywhere else in the country and there is less ability to tax than most places. Almost one out of four Utah residents is a school age child and only 30% of Utah land is able to be taxed because of our public lands.

In 2004, the education campaign mantra changed. The team of Gary Herbert and Jon Huntsman Jr. ran and won on a different theme.  Their pitch was grow Utah’s economy first and there will be more tax revenue to fund education and other government priorities. Lo and behold, to the surprise of some, they were elected.

The stakes were high.  Everyone in the Utah knew they could judge the success of this team by how well the economy performed. GDP, job growth, unemployment rates and the cost of doing business suddenly became the metrics whereby we knew if our Governor was keeping his promise.

Former Governor John Hunstman (R), Utah

Governors Huntsman in 2004 and then Herbert beginning in 2009 had a simple philosophy to stimulate the economy, government doesn’t create jobs but government can harm jobs. Governor Herbert called it government creating a fertile ground so that the private sector can plant the seeds and make them grow.

The executive branch continually messaged economic development.  The legislative branch got on the same page.  As more and more state officials in both elected and unelected capacities promoted economic development, fewer and fewer naysayers were outspoken

Governor Gary Herbert (R-Utah)
Governor Gary Herbert (R-Utah)

maybe out of a realization that the priority was clear and to the point. The media stopped criticizing economic development efforts and became supportive. While skeptical, even the education community stopped threatening to go on strike and grumbled less. Everyone wanted to see if “a rising tide lifts all ships”.

Setting the tone was a rock on the Governor’s desk that said “Economic Development Czar”. Every day, the first question asked was how will our actions effect the ability of businesses to succeed in Utah. Government red tape was eliminated. Corporate and individual tax rates were lowered. Flexible, post performance tax incentives increased. Unnecessary regulations were evaluated and eliminated. Both higher education and public education began putting more emphasis on job preparation and 21st Century skills.

Utah is small enough to react quickly, but we are sophisticated enough to meet the needs of the biggest companies in the world. Fortune 500 companies and others have regularly located in Utah. Adobe, Goldman Sachs, Boeing, Intel, eBay, Google, Oracle, Procter & Gamble, etc. came and expanded in Utah. Home grown companies like Merit Medical, Myriad Genetics, Overstock.com, Nuskin, Ancestry.com, doTERRA, Vivint, Hirevue, Qualtrics, etc. have prospered.

Since 2004, Utah’s job growth has been among the top in the country. Utah’s unemployment rate has been among the lowest in the country. Utah’s GDP has ballooned. And Utah government revenues have skyrocketed growing from less than $10B to almost $15B in about 10 years. Utah wins economic award after award and other States are looking to Utah for their own public policies.

Most importantly, Utah’s education funding has grown dramatically. Since all of Utah’s income tax goes to education, lets assess the increase in income tax since 2004. I used two separate data sources, but it appears that Utah Income Tax revenues have gone from $1.67B in 2004 to $3.26B in 2015 even with a major recession during that time.

Utah’s unique approach to government is working. Let’s keep doing it.

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