Utah’s Boom Thanks to Huntsman’s Leadership

September 10th, 2009 at 1:06 am | 4 Comments |

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As an expatriate now living in Washington, patient D.C., prescription I’m often forced to pit Utah against the home states of my fellow wanderers.  My first debating point is the 2002 Olympics—only three cities in the country have hosted the Winter Olympics.  The Jazz make a strong second point—thanks to Jerry Sloan, capsule we’re a perennial “conten-dah” in the NBA.  Third, Utah’s topography ranks among the most diverse and beautiful in the world—we have blue mountains, green trees, red rocks, and a giant, brown salt-water lake.  And batting cleanup, Utah is the only state that is home to one of the world’s major religions (although I suppose New York could make a case for Judaism).

The economic crisis has solidified Utah’s place at the top.  Sure, not everyone in Utah has a BMW 6 series (we prefer Suburbans anyway), but according to the numbers, Utah has weathered the storm with far more success than other states, especially its Western neighbors.

So here are the facts ma’am, and just the facts:  The Center on Budget and Policy Priorities praises Utah’s budgetary prudence and predicts that Utah will be one of the few states without a budget gap in 2011.  Meanwhile, California has recently descended to the level of a wayward gambler by now printing IOUs, and Arizona is similarly drowning in its own red ink.  As of June 2009, Utah’s unemployment rate stood at 5.7 percent—fourth best in the country;  7.5 percent of Coloradans are unemployed; Arizona, 8.7 percent; Washington, D.C., 10.9 percent; California, 11.6 percent, and Nevada, 12.0 percent (fifth to the bottom).

Other statistics tell the same story.  According to the most recent U.S. Census data, 13.0 percent of Americans live below the poverty level.  In Utah, that number is only 9.7 percent; in Arizona it is 14.2 percent; Colorado, 12.0 percent; Idaho, 12.1 percent; and New Mexico, 18.1 percent.

To what can we contribute this success?  It might have something to do with the pure mountain water or else the fact that every Utahn can sing, dance, and speak another language.  But it is probably more the result of sound tax policies and competent management.

In Washington D.C., big government ideology currently reigns supreme (unfortunately, this mentality preceded the Obama administration).  Utah has avoided this pitfall.  We have one of the lowest corporate tax rates, a reasonable sales tax, and we do not have an inheritance tax.  Utah also boasts a comparatively low percentage of public employees—our bright Utah minds are used in the flourishing private sector.  Variables such as these have prompted Forbes magazine to name Utah the second best state for business in the country.

Much of this is due to Utah’s wise leadership.  Former Governor Huntsman was not busy selling off Senate seats (Illinois), nor did he waste time in the metaphorical Appalachian Trail (Sanford, South Carolina) or as another “client 9” (Spitzer, New York).  Instead, Huntsman kept his focus on managing the Utah economy.  In May 2009, a study released by economists Jonathan Williams, Arthur Laffer, and Stephen Moore says, “Utah is unique in that its leaders are making some very conscientious decisions to improve their business climate and to make it clear they are open for business and not going to tax you out of existence.”

If I am to retain Utah bragging rights—if Utah is to remain an economic paragon—then it needs to continue its sound economic policies, and it needs another competent manager.  Let’s keep this priority in mind—as opposed to focusing on the gay marriage positions of our new Governor and Lieutenant Governor—as we evaluate future leaders of Utah.  Perhaps the same advice could be given to the national Republican Party?

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4 Comments so far ↓

  • balconesfault

    I’ll give credit to Huntsman’s management – he seems a very pragmatic man – but the boom in Utah and a number of other western states in the last decade can also be seen as a second wave from the California tech boom of the 1990′s. As property values in California skyrocketed … the cost of hiring employees, particularly younger employees skyrocketed … and a lot of businesses started looking for locations that were a short plane ride away from the Silicon Valley. SLC/Provo benefitted, Boise benefitted, Phoenix benefitted.

    Utah also benefits from a LOT of recreational properties, which also boomed in the last decade. Check the prices of a condo in Park City in 2008, versus in 1995. The nice thing about these properties is that they provide a much higher level of tax revenues to service obligations than most types of development. A 1000 unit apartment complex in San Jose or Sacramento is going to carry along a significant burden to local schools and road systems … a 1000 unit condo complex in Sundance brings big property tax revenue with little burden.

  • sinz54

    Another factor in Utah’s success is demographics.

    Utah has the youngest population of any U.S. state. That’s because it has the highest birth rate of any U.S. state.

    A large factor that is weighing down economic growth all over the Western world is the aging of the population, including the need for entitlements to take care of the elderly who typically retire at age 65 and then go on to live another 15 years on the average. This is worsening as young adults have fewer children.

    Utah is one of the few exceptions to this rule. Its young population constantly introduces new blood and new energy into Utah society; and the taxes they pay represent a relatively larger tax base.

    It really illustrates a point I’ve made before:

    A great way to pay for Medicare and Social Security is for young Americans to have more kids! Put away your birth control measures, eschew vasectomies, and have plenty of kids. When those kids grow up and get jobs, their taxes will pay for entitlements to the elderly retirees. (That “Octomom” has produced 14 future taxpayers!)

  • balconesfault

    Yep. Droughts can be really nasty things, and the greater the population being served, the quicker and worse the impacts that result.

  • Observer

    Huntsman is The Next One.