Why Utah Keeps Adding Jobs
"Go West, young man," American newspaper editor Horace Greeley once famously said, capturing a national ethos that the country's future lies on that coast. Of course, the spirit of the 19th Century saying has long been embodied by the fortunes of California. But with the Golden State struggling amid the recession more than most of its counterparts, and dragging the entire region down with it, perhaps it is time for California to step aside as the symbol of Western dynamism.
In the past two weeks alone, the 45th state to enter the union has announced 3,400 new jobs to be created in-state, thanks to tech companies choosing the Beehive State over potential rivals. On June 9, the aircraft armament firm ITT Corporation announced that it will create 2,700 jobs for highly skilled aerospace engineers. On June 20, the data storage company EMC Corporation said it plans to hire 500 people to work in customer service while IM Flash Technologies also announced it will need 200 people to staff a memory chip plant based in Utah.
And while many of the jobs will take years to come to fruition, the news is being welcomed by state officials as a testament to the Utah formula.
"There's a laundry list of reasons for why this is happening," says Marty, spokesman for the statewide Salt Lake Chamber of Commerce, in an interview with AOL Jobs. "We have the lowest energy rates in the country. We have a very young work force. But it's also our strong economic reputation. You'd be hard-pressed to find a state that's better managed its funds in the recession." (Energy costs are on average 35 percent lower in Utah than the national average; census estimates say Utah has the youngest population in the union.)
To buttress his beehive boosterism, Carpenter points out that Utah still has a rainy day fund of $200 million dollars to fall back on even as numerous states confront crippling shortfalls. And its overall growth rate of 3.5 percent from 2005 to 2010 made it second in the nation over that period (after North Dakota), says Forbes magazine. (Such figures should only help the incipient presidential bid of Jon Huntsman, governor of the state from 2005 to 2009.)
The view of Utah as a particularly vibrant state has also been embraced by a series of recent studies and reports. Forbes picked Utah as the best state for business in the magazine's annual survey, highlighting its corporate tax rate of 5 percent. And on the same day of the announcements by EMC and IM Flash, the Brookings Institution Metropolitan Policy Program ranked Salt Lake City as the top performing city in the nation, as measured by its 8.3 percent growth in gross metropolitan product from the fourth quarter of 2008 to the first quarter of 2011.
And while many other aspects of Utah's culture allow the state to stand out, such as an unusually large international and multilingual community thanks in part to Mormon missionary work, the governor's office also says credit is due to the state's tax code.
While Utah is not alone in offering tax credit incentives to companies doing business in-state, its Economic Development Tax Increment Financing (EDTIF) system is set apart by making its credit post-performance based, says Michael Sullivan, the director of communications with the Governor's Office of Economic Development.
"Our program is sustainable," he says in an interview with AOL Jobs. "States are suing companies for return of tax incentives. We don't ever have to sue anybody, because we collect the dollar before we give the quarter back."
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Dan Fastenberg has more than a decade of experience working as a journalist. Most recently he was a reporter with TIME Magazine covering politics with analyst Mark Halperin. Previously, he was a writer for the Thomson Reuters news service's Latin America desk. He was also a reporter and associate editor for the Buenos Aires Herald while living in South America. Follow Dan on Twitter. Email Dan at email@example.com. Add Dan to your Google+ circles.more...