Public Policy Updates

 

A service provided by the Salt Lake Chamber

 

December 28, 2005

In this issue:

 

Transportation Funding Top Priority for Salt Lake Chamber in 2006

 

The Executive Committee of the Salt Lake Chamber Board of Governors recently reiterated its strong and unequivocal support for adequate funding for transportation infrastructure. At the same time, it also gave top priority to continued funding for the so-called USTAR initiative (Utah Science, Technology, and Research) and related efforts to create more technology and research sector jobs. Adequate transportation and higher quality jobs are both critical to continuing the state’s record economic growth. Only by sustaining such growth can we provide support needed for public and higher education and other critical state needs.

 

 

Transportation Committee Created

 

To focus its efforts to support transportation funding the Chamber authorized the creation of a new Transportation Committee in August.

 

The mission of the Transportation Committee is to provide a forum for Chamber members interested in the important funding needs of transportation in Utah, to make their voices heard at the Legislature and with the Governor as critical decisions are made, and to make public policy recommendations and advocate for those changes. Scott Parson of Staker Parson was named Chair of the Committee.

 

The Transportation Committee has met four times in 2005.  At its first meeting, Senate President John Valentine (R-Orem) challenged the committee and the Chamber to address specific transportation questions. These are:

 

1.                                          Should the commercial trucking industry be exempt from transportation user-fee funding?  For example, should diesel fuel be exempt from motor fuel gas tax, or should there be different tax rates for commercial vehicles?

 

2.                                          Should the sales tax exemption on motor fuel be eliminated? If eliminated, should sales tax on motor fuel be dedicated for highway funding?

 

3.                                          Should transportation be funded through an overall increase in sales tax? If so, should it be dedicated? Should it be dedicated to highways, transit, or both?

 

4.                                          Why are taxpayers paying for road expansion and construction projects caused by private development? What is the responsibility of developers? Should they shoulder greater responsibility for providing transportation infrastructure, such as providing adequate ingress and egress to their developments? Examples include the Lehi area, north and west of Utah Lake, and the Pleasant Grove interchange in Utah County.

 

5.                                          Should and can we link local planning and development with state transportation planning?  How can this best be accomplished?  What is the respective responsibility of local governments and developers in such cases? What about the role of the so-called "big boxes?"

 

6.                                          Should special impact fees or special transportation districts be considered as a means to provide transportation funding? Should land value taxation be considered?

 

7.                                          How can the business community address the apparent lack of public interest in prioritizing our transportation system?

 

 

The Committee continues to address these issues at its monthly meetings held every second Monday at 12 noon at the Chamber

 

 

Legacy Parkway Settlement

 

At its second meeting the Chamber’s Transportation Committee was asked by the Chamber’s Board of Governors Executive Committee to recommend an appropriate response to the ongoing Legacy Parkway litigation. After careful deliberation and discussion, including Sen. Sheldon Killpack, Sen. Dan Eastman, and Rep. Stuart Adams, representatives of UDOT, and representatives of the trucking industry, the Committee recommended that the Board of Governors endorse the proposed settlement while expressing specific concerns about the restrictions on truck traffic. The Board of Governors later adopted the following resolution to that effect:

 

A RESOLUTION OF THE SALT LAKE CHAMBER IN SUPPORT OF THE LEGACY PARKWAY AGREEMENT-IN-PRINCIPLE

 

 

WHEREAS: The Salt Lake Chamber has gone on record and adopted a previous resolution supporting construction of the Legacy Parkway and hereby reaffirms that support; and

 

WHEREAS: The Salt Lake Chamber has been, and continues to be, a vocal and pro-active proponent of improvements to Utah’s transportation infrastructure that boost safety, enhance efficiency, increase mobility, and foster economic development, growth, and commerce.

 

WHEREAS: A small group of plaintiffs has sued the State of Utah to stop or otherwise severely restrict the construction of the proposed Legacy Parkway resulting in lost-time, waste of taxpayer funds, and environmental degradation resulting from a grid-locked I-15 which has in effect been a tax on our economic vitality and our quality of life; and

 

WHEREAS: The State of Utah recently entered into an agreement-in-principle with the plaintiffs to end the litigation and allow construction to proceed; and

 

WHEREAS: The agreement-in-principle includes some restrictions and provisions that the Chamber deems detrimental to economic development, growth, and commerce including a prohibition of trucks using Legacy Parkway; and

 

WHEREAS: Unfettered mobility by the trucking industry is crucial to the distribution of supplies, provisions, materials, products and equipment on which robust commerce and a strong economy depends; and

 

WHEREAS: Despite the unfortunate prohibition of trucks on Legacy Parkway, the Salt Lake Chamber recognizes the overall benefits provided by the Legacy Parkway and recognizes that negotiations with the plaintiffs will expedite the project; and

 

WHEREAS: Further delays and additional litigation are unacceptable, as they would add several years and hundreds of millions of dollars to the project.

 

THEREFORE, BE IT RESOLVED: That the Salt Lake Chamber supports a negotiated settlement that ends litigation and allows construction of the Legacy Parkway to commence as quickly as possible; 

 

BE IT FURTHER RESOLVED: That the Chamber encourages those negotiating a final agreement to recognize the importance of highway freight traffic to the economy as well as the special needs of local delivery trucks and to craft a final agreement which acknowledges and accommodates that fact;

 

BE IT FURTHER RESOLVED:  That the Chamber strongly encourages those negotiating a final agreement to ensure that Legacy Parkway boosts safety, enhances efficiency, increases mobility, and fosters economic development, growth, and commerce.

 

 

 

 

 

Increased Transportation Funding Endorsed

 

In November, after hearing from Rep. Becky Lockhart and other transportation funding advocates, the Chamber Transportation Committee endorsed increased ongoing funding for transportation.  In December, Governor Jon Huntsman proposed an additional $140 million for highways and the Committee immediately adopted a resolution endorsing the Governor’s efforts and encouraged the Legislature to follow suit, while asking the Legislature to set aside even more money for roads. The Chamber Board’s Executive Committee approved the resolution and added a provision endorsing the ongoing earmarking of funds for highways. The intent of the Committee is to support the concept contained in HB 18, Transportation Investment Fund, by Rep. Lockhart, a bill introduced in the 2005 Legislative Session but which did not pass. The bill would have dedicated part of the state sales tax for roads.

 

The following is a draft of a new Salt Lake Chamber Public Policy Statement on Transportation Funding:

 

Salt Lake Chamber Public Policy Statement on Transportation Funding:

 

The Salt Lake Chamber supports Governor Huntsman’s efforts to meet the critical needs of transportation and endorses his budget proposal to increase transportation funding by at least $140 million. The Chamber also supports the Utah Legislature's Republican Caucus' efforts to increase transportation funding in their preliminary budget decisions.

 

The Chamber supports as much funding as possible for transportation infrastructure to meet identified critical needs in the state's transportation system.

 

The Chamber supports dedicating a percentage of state tax revenues to the funding of transportation infrastructure for the future, whether from automotive related sales or other sources.

 

The Chamber asks that the Governor and the Legislature make transportation infrastructure funding a top priority for as long as such funding is needed to improve and maintain a robust economic environment in the state of Utah.

 

 

 

USTAR Continues as a Top Priority for Salt Lake Chamber in 2006

 

USTAR Gets Major Boost from Governor

 

The Utah Science, Technology, and Research (USTAR) economic development initiative got a major boost from Governor Jon Huntsman in his 2006-07 budget proposal. He recommended $50 million in one-time monies for USTAR-related research facilities and the proposed “innovation centers” to be placed throughout the state. He also recommended $12 million in ongoing monies to help the state’s two research universities (the University of Utah and Utah State University), to recruit high-level research teams.

 

A bill incorporating these funding requests has been filed by Sen. Al Mansell. The bill will also create a board to control and authorize al funding for USTAR projects. This board will be separate from state government and will primarily consist of business leaders. A summary of the bill will be included in the next issue of Updates.

 

Business Community Leads Out

 

From its inception, the USTAR initiative has been the brainchild of the state’s business community, not the state’ system of higher education. USTAR has been endorsed and lobbied for by the Salt Lake Chamber, the Economic Development Corporation of Utah (EDCU), the Utah Information Technology Association (UITA), the Utah Life Sciences Association, and several Chambers of Commerce from throughout the state. These groups and many individual business leaders will continue to lead the effort on Capitol Hill to ensure that funding for USTAR is assured.

 

USTAR Key Points

 

The following are the key points of the USTAR initiative:

 

1.      What is the Utah Science, Technology and Research (USTAR) Economic Development Initiative?

• An innovative, aggressive and far-reaching effort to bolster Utah’s economy with high-paying jobs and keep the state vibrant and competitive in the Knowledge Age.
• It has been developed over the last 24 months by Utah’s business leaders in collaboration with the Governor’s Office, economic development leaders, key legislators, and university leaders.

2.      Why is it important?

• Utah’s economic future is at stake. Without a carefully planned strategy, Utah will certainly grow, but not with high-paying jobs that support a family and that generate sufficient tax revenues to support our large education burden.
• Utah is losing ground. In 1981, Utah’s average salary was 96% of the national average. Today it has dropped to 82%.
• Low salaries have social consequences: more families needing multiple incomes to survive economically, higher bankruptcy rates, the lowest per-pupil education spending in the nation. We ought to aspire to be a high-wage state.

3.      How can we increase our average salaries?

• High salaries are found in advanced technology companies. For example, the average salary in the IT industry in Utah is 75% higher than the statewide average wage. IT accounts for only 3.7% of Utah jobs, but 6.5% of total wages.
• Unfortunately, Utah’s technology employment dropped from a high of 67,000 jobs in 2000 to only 56,000 in 2004, contributing to the decline in average salaries. In the globally-competitive Knowledge Age, Utah is falling behind, even as science and technology are advancing rapidly, spawning entirely new industries and high-tech businesses.

4.      How will USTAR create high-tech jobs?

• World-class research teams will be recruited to Utah and developed internally in carefully-targeted disciplines with multi-billion dollar markets where Utah already has distinct competitive advantages, such as genomics and personalized medicine. These teams will develop products and services that can be commercialized in new businesses and industries, creating high-paying jobs and increasing Utah’s tax revenue.

5.      What is the risk?

• USTAR is a low-risk proposal because it has already been proven to work over and over again as research and development at Utah’s universities has been commercialized in dozens of new businesses.
• USTAR proposes to dramatically accelerate the scale of R&D and business commercialization by building, recruiting and funding research teams targeting neuroscience, biomedical, personalized medicine, defense and security, information and imaging technology, microbial technology, and advanced systems and materials engineering. With Utah’s unique assets in genomics and its Utah Population Database, no place in the world is positioned as well as Utah to actualize the rich potential of these scientific disciplines, which lead to multi-billion dollar markets for pharmaceuticals, medical devices, biosensors, and other advanced products and services.

6.      What is the return on investment?

• While USTAR’s initial cost is significant, the return over several years is very high. Conservative projections developed by the Bureau of Economic and Business Research suggest that over 30 years, USTAR will yield:

o       $4.9 billion in new external research funds

o       422 new companies

o       123,406 new jobs paying $62 billion in salaries

o       $5 billion in new tax revenues for Utah.

• This is real economic development that will have tremendous impact throughout Utah. Private sector investors have expressed interest in sharing the investment risk with the state, potentially making USTAR a public-private partnership. 

7.      Why is it important that Utah take action now?

• Utah’s economic competitors, including neighboring Arizona and California, understand the importance of basic R&D in science and technology for high-paying jobs and economic development. The race is on.

o       Arizona: $650 million investment over several years for basic R&D;

o       California: $4 billion to upgrade university R&D;

o       Michigan: $1 billion for a life science corridor;

o       Wisconsin: $375 million research institute at University of Wisconsin-Madison;

o       In all, 32 states are spending $29 billion in state tax dollars to encourage basic R&D and commercialization.

 

8.      How will the entire state benefit from USTAR?

• All areas of the state will benefit as five Innovation Centers, located strategically throughout the state, support the needs of local businesses and connect them to research and development projects and other resources.

9.      How will accountability be ensured?

• An Oversight Committee consisting of representatives appointed by the Speaker of the House, the President of the Senate, and the Governor’s Office, in addition to private sector representation, will direct and control distribution of USTAR funds and ensure that legislative intent is followed.

Conclusion

Utah’s business community stands firmly behind USTAR as the state’s biggest and most important economic development initiative in many decades. The USTAR investment will provide high returns in research grants, tax revenues and in good-paying jobs that support families and improve standards of living. The race is on to create the businesses and industries of the future, and Utah must not be left behind.

 

 

 

 

 

Healthcare Costs are a Major Issue to Chamber Members

 

New Committee to Focus on Rising Healthcare Costs

 

One of the most critical issues facing businesses today is the increasing cost of healthcare. Because healthcare benefits are largely provided by employers in this country it is critical for businesses to gain control over the costs of the system. To help the Chamber Board of Governors focus on that issue it created a new Healthcare Committee. The Chair is Aaron Bludworth of Modern Display. The Chamber’s Healthcare Committee meets every 3^rd Thursday of the month at 12 noon at the Chamber.

 

The primary objectives of the Committee are as follows:

 

·        Determine Why Costs of Healthcare Are Rising So Dramatically and Develop Solutions to Address the Issue

·        Explore Employers’ Role in Healthcare System

·        Educate Chamber Members

 

The committee’s study methodology will include:

 

·        Experts

·        Public/Elected Officials

·        Outside Studies

·        Surveys of Committee and Chamber Members

 

 

Other Healthcare Issues To Be Studied

 

In addition to the rising costs of healthcare, other healthcare issues of general concern that will be studied by the Healthcare Committee include:

 

·        Uninsured

·        Universal Healthcare funded by Tax Dollars

·        Waste in Healthcare Industry

·        Diseases and Public Health

·        Drug Policy

·        Health Savings Accounts

·        Association Health Plans

·        Consumer/Market Aspect

·        Healthcare Data

 

One issue that is of immediate interest to the Salt Lake Chamber is Governor Huntsman’s proposal to cover uninsured small businesses. More about that issue will be addressed in future Updates.

 

 

Energy Policy to be Reviewed by Chamber’s New Energy Committee

 

The Chamber is vitally concerned with energy policy in all its aspects, from conservation to the development of new energy sources to the price of gasoline to renewable energy. To focus its efforts, the Chamber created a new Energy Committee. The Committee’s task will be to review the development of a state energy policy as conducted by the Governor's new Energy Policy Advisor and Energy Advisory Council and by a working group of the Utah Legislature. It will also monitor the implementation of the new federal Energy Act that will define much of what can be done at the state level in terms of energy policy. The Committee Co-Chairs are John Crandall of GK Baum, and John Kirkham of Stoel Rives. The Committee meets every first Tuesday of the Month at 12 noon at the Chamber.

 

 

Legislative Affairs Committee to Review Other Issues Of Concern to Business Community

 

The Chamber’s Government Affairs Advisory Committee has been re-named the Legislative Affairs Committee. Rey Butcher of Questar will continue as Chair.

 

As in years past, the Committee will meet weekly during the Legislative Session. The 2006 schedule is as follows:

 

Every Tuesday

(January 17 thru February 28)

12 noon

Beehive Room

East Capitol Building

 

We look forward to another productive year on Capitol Hill!

 

 

 

 

Legislative Preview for 2006

 

Tax Reform

 

On the heels of former Governor Olene Walker’s tax reform efforts the Utah Legislature established a Tax Reform Tax Force in 2005 to examine all aspects of the state’s tax code. It divided into the following subcommittees:

 

Income Tax Subcommittee

Property Tax Subcommittee

RDA and Other Taxes Subcommittee

Sales and Use Tax Subcommittee

 

Chaired by Sen. Curt Bramble and Rep. Wayne Harper, the Tax Force and the subcommittees met at least twice a month throughout the year and heard from experts in all areas related to taxation. It finalized its deliberations at the end of November and recommended the following bills:

 

HB 51 – Sales and Use Taxation of Amusement Devices and Cleaning or Washing of Tangible Personal Property (Rep. Wayne Harper)

HB 52 – Sales and Use Tax Exemption for Transportation (Rep. Wayne Harper)

HB 53 – Apportionment of Business Income to Utah (Rep. Wayne Harper)

HB 54 – Sales and Use Tax Exemption for Sales of Certain Agricultural Products (Rep. Gordon Snow)

HB 55 – Property Tax - Circuit Breaker Qualifying Limits (Rep. Wayne Harper)

SB 28 – Sales and Use Tax - Exemption for Isolated or Occasional Sales (Sen. Lyle Hillyard)

SB 29 – Sales and Use Tax Exemption - Telecommunications (Sen. Curt Bramble)

SB 30 – Sales and Use Tax Exemption for Semiconductor Fabricating, Processing, Research, or Development Materials (Sen. Curt Bramble)

SB 31 – Sales and Use Tax - Manufacturing Exemptions Amendments (Sen. Howard Stephenson)

SB 32 – Multi-channel Video or Audio Service Tax - County or Municipality Franchise Fee Tax Credit (Sen. Brent Goodfellow)

SB 33 – Sales and Use Tax Exemptions for Certain Business Inputs (Sen. Howard Stephenson)

SB 34 – Gross Receipts Tax Amendments, Repeal and Public Utility Tariffs (Sen. Mike Dmitrich)

SB 35 – Local Option Sales and Use Tax Distribution Amendments (Sen. Greg Bell)

SB 36 – School Districts - Limited Amendments to Truth in Taxation (Sen. Mike Dmitrich)

HJR 1 – Resolution (Rep. John Dougall)

 

In addition to these bills the Tax Force also considered major reform in the individual income tax and the sales tax. They considered whether to make the individual income tax “flatter” by eliminating many of the current deductions and lowering the top rate. They also considered removing the sales tax from food.

 

Tax Cuts

 

In mid December the House Republican caucus decided to support a tax cut of $230 million. Later, the Senate Republican caucus deferred taking a position on a specific tax cut. The Governor has already proposed a $60 million tax cut. Any tax cut will likely come primarily through removing sales tax from food and/or making the individual income tax flatter. In any event, the final decision on the size and form of any tax cuts will not be made until late in the 2006 legislative session,

 

Transportation Funding

 

The House and Senate Republican caucuses have committed to set aside significant amounts for funding transportation. The final amount allocated will not be determined until late in the legislative session.

 

USTAR

 

A bill has been filed by Sen. Al Mansell to incorporate the Governor’s budget recommendations for USTAR and to create an independent authority to oversee the expenditure of USTAR-related funds and construction of USTAR-related facilities.

 

In-State Tuition

 

The Chamber supports existing law which allows children of undocumented parents to pay in-state tuition if, like other students, they meet certain residency requirements. The Chamber adopted the following resolution in support of its position:

 

 

Salt Lake Chamber

Resolution Supporting the Payment of Resident Tuition

By Children of Undocumented Parents Pursuant to

Established Criteria

 

September 27, 2005

 

Whereas, Utah’s greatest asset, economic and otherwise, is a well-educated and productive population;

 

Whereas, Utah’s economic vulnerability is a large population of uneducated and untrained workers;

 

Whereas, it is in Utah’s economic self-interest to encourage and support ALL of its ambitious, academically strong, middle school and high school students by providing every possible incentive to complete university training;

 

Whereas, all middle and high school students should be given support and encouragement to reach their academic potential at all educational levels so that they may become productive workers, good citizens, and contributing members of society;

 

Whereas; children of undocumented Utah workers will likely stay in the state and it is in Utah’s self interest that they be educated and productive;

 

Whereas, higher education for more Utahns translates to a reduction in our social services burden;

 

Whereas, the average tuition for Utah’s nine state institutions of higher learning is $7,942.24 for out of state residents and $2171.79 for state residents, over three times higher for out of state students;

 

Whereas, like all working Utahns, undocumented workers pay sales tax when they buy goods and services, property tax through their rent or home ownership, and federal and state taxes are withheld from their paychecks to financially support the cost of higher education;

 

Whereas, prohibitive tuition costs for all members of Utah’s future workforce and family leaders increase their dependency on society and jeopardize the economic viability of the state at large;

 

Whereas, requirements of such legislation mandate that these children of undocumented parents be of good moral character, attend middle or high school for several years and live in a particular state for several years;

 

Whereas, a coalition supporting resident tuition for these children has been created, known as Utahns for the American Dream;

 

Whereas, the coalition includes, but is not limited to, the following:

 

• Utah Chapter, National Commission for Community and Justice
• Centro de La Familia de Utah
• Utah Coalition of La Raza
• Utah Dept. of Community and Culture
• Utah Hispanic Chamber of Commerce
• Utah Issues
• Achievement Gap Coalition
• Multicultural Education, World Languages, MESA
• Multi-Cultural Legal Center
• NABE/Achievement Gap Coalition
• Peace & Justice Commission
• Utah System of Higher Education
• Salt Lake Community College
• Voices for Utah Children
• University Of Utah
• Ivory Homes
• Utah State Office for Economic Development
• Unidos de los Ninos/United for Kids
• Utah Valley State College

 

Be it Resolved that the Salt Lake Chamber Board of Governors supports the payment of resident tuition for children of undocumented parents pursuant to criteria established under state and/or federal law;

 

Further, be it resolved that the Salt Lake Chamber Board of Governors support federal and/or state legislation that establishes such criteria.

 

A bill has been filed to repeal the existing law, HB 7 - Repeal of Exemption from Nonresident Tuition by Rep. Glenn Donnelson. The Chamber opposes this bill.

 

Healthcare

 

A bill will be filed to put forth the Governor’s proposed small business pool. In addition, the Chamber will continue to oppose the so-called “any willing provider” concept.

 

Energy Policy

 

A bill has been filed for the 2006 legislative session, HB 46 – Energy by Rep. Roger Barrus. It creates the position of state energy officer and outlines his or her powers and duties, requires coordination between the state energy officer and state agencies, and requires the state energy officer to submit certain reports. But most importantly, the bills sets forth the state’s energy policy as follows:

 

• to have adequate, reliable, affordable, sustainable, and clean energy resources;
• to promote the prudent development and use of energy resources and infrastructure sufficient to meet the state's growing demand, while contributing to the regional and national energy supply, thus reducing dependence on international energy sources;
• to allow market forces to drive prudent use of energy resources, although incentives and other methods may be used to ensure the state's optimal development and use of energy resources in the short- and long-term;
• to pursue energy conservation, energy efficiency, and environmental quality;
• to streamline state regulatory processes to balance economic costs with the level of review necessary to ensure protection of the state's various interests, and, where federal action is required, to encourage expedited federal action and collaboration with federal agencies to expedite review;
• to maintain an environment that provides for stable consumer prices that are as low as possible while providing producers and suppliers a fair return on investment, recognizing that economic prosperity is linked to the availability, reliability, and affordability of consumer energy supplies and that investment will occur only when adequate financial returns can be realized.

 

The bill also requires each state agency, to the extent permitted by other law, to conduct its activities consistent with this policy.

Choice in Education

 

A bill has been filed by Rep. Brad Dee to create a voucher program to be used to offset tuition paid to private schools.

 

Minimum Wage

 

A bill has been filed by Sen. Ed Mayne to raise the minimum wage in Utah.

 

Smoking in Public Places

 

A bill has been filed by Sen. Mike Waddoups, SB 19 – Amendmentsbroadens the definition of public place where smoking is prohibited to include taverns, private clubs, buildings owned or operated by social or fraternal organizations, and certain workplaces.

 

Zoning and Land Use

 

A number of bills may be filed to further define and/or restrict the zoning and land use powers of local governments.

 

 

*   *   *   *   *   *   *   *

 

Schedule of Meetings

 

January

 

9          Chamber Transportation Comm.       12 noon           Chamber, Eccles Bd. Room

10        Chamber Board Exec. Comm.           7:30 am           Chamber, Eccles Bd. Room

10        Chamber Energy Committee             12 noon           Chamber, Eccles Bd. Room

12        Chamber Legislative Affairs Comm.  11 am              Chamber, Eccles Bd. Room

16        Legislative Session Begins

17        Chamber Legislative Affairs Comm.  12 noon           Beehive Room, East Capitol

19        Chamber Healthcare Committee       12 noon           Chamber, Eccles Bd. Room

23        State Chamber Govt. Affairs               12 to 2 pm       4112 State Office Bldg.

24        Chamber Bd. Of Governors               7:30 am           Chamber, Eccles Bd. Room

24        Chamber Legislative Affairs Comm.  12 noon           Beehive Room, East Capitol

30        State Chamber Govt. Affairs               12 to 2 pm       4112 State Office Bldg.

31        Chamber Legislative Affairs Comm.  12 noon           Beehive Room, East Capitol