Something I noticed in an article in the Tribune this morning:
https://www.sltrib.com/news/business/2021/10/27/utahs-era-big-tax-breaks/
Utah’s era of big tax breaks to attract new businesses may be nearing an end
Quote:
The long-used system of post-performance tax rebates forgoes a portion of future revenues generated by incoming businesses in exchange for guarantees those employers create new high-paying jobs over future years.
“We are redoing all the state incentives,” said Ben Hart, deputy director of the Governor’s Office of Economic Opportunity, including, he added, “really ramping down support and incentives” going to large retail companies.
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Quote:
Go Utah wants to essentially forbid for incoming business any retail subsidies, incentives and other streams of money devoted to infrastructure such as sewer lines or roads in all but a few cases, he said. Exceptions would be limited to areas with below-average wages and developments where half the construction by square footage is devoted to housing and half that housing is affordable.
Rebates might also be allowed for projects proposed for environmentally contaminated sites and for local small-business support and Main Street beautification programs.
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*Bolding is from me*
It looks like the State will be updating the incentives for not only the State but also Cities.
2 things of relevance here are first, the
Race to the Bottom aspect of stopping the competition between Cities to offer incentives for Retail/Restaurants to open a location in their City. This will stop Cities from bidding lower against each other just to get the sales tax revenue. This also will likely lead to many suburban cities needing to raise taxes as retail/restaurants begin to be more picky about where they expand since they won't get reduced taxes.
Second thing of note is that the State looks to be stopping incentives for infrastructure. This has been one of the key items that has spurred the growth at the point of the mountain over SLC. As many suburban locations are lacking in infrastructure, developers have pushed for and received incentives for infrastructure as a way to help lure companies to their developments. They do this by using the infrastructure incentives as a way to lower lease rates.
Both of these will have far reaching effects but the biggest is with the 2nd item in that SLC will be the biggest winner as the infrastructure is primarily in place and any impact fees can be used to upgrade what is needed. This isn't as doable in the suburbs due to the lower infrastructure levels
Lastly, there is discussion of allowing incentives for low income housing. I see this as more of a win for SLC than the suburbs because when coupled with #2, the housing if built in SLC will only bolster the prominence of SLC as it would get a double win, company expansion/relocation and additional lower income housing.
The discussion about allowing full incentives including infrastructure for rural expansions is minor as there isn't much happening there outside of warehousing which may help some won't be enough to offset the incentives provided.
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