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WRIGHT | BISHOP ECONOMIC JUMPSTART

 

COVID-19 has hit all of us hard, but for many the side effects will impact more than just our physical health. Someday soon our masks will come off, but our balance sheets, savings accounts, business runways, education funds, and retirement plans will feel the sting of this pandemic long after we’re able to rejoin our classmates and our coworkers. There are things the state of Utah can do right now to jumpstart our economic recovery, but it requires vision and the willingness to make difficult decisions. The Wright | Bishop team has a plan that puts Utahns back to work, keeps taxes low, and continues the economic vitality Utah is known for.  Our plan is about empowering citizens to retain more of their family’s incomes to meet basic needs.  

Each of these ideas needs to be explored and vetted with the help of legislative leadership, state staff and citizens of Utah. Communication and collaboration are critical in a time of crisis to ensure we’re all on the same page. Our response becomes exponentially more efficient when we’re working together.

SHORT TERM

1. CUT BUDGETS TO MEET REVENUE SHORTFALLS

2. ENACT A HIRING FREEZE & ENACT A CAPITAL PROJECTS FREEZE

3. REALLOCATE ECONOMIC INCENTIVES TO SUPPORT UTAH-BASED BUSINESSES

4. CONDUCT A FULL ANALYSIS OF UTAH’S UNEMPLOYMENT COMPENSATION PROGRAM


FUNDING OUR PRIORITIES

1. REALLOCATING ECONOMIC INCENTIVES TO SUPPORT UTAH-BASED BUSINESSES

By using the funds set aside for incentives to reduce taxes for all business, we provide relief for businesses already operating in Utah and attract new businesses with our reduced rate.  During these tough economic times, Utah-based businesses should be benefiting from any money that was allocated to economic incentives.

2. PLACING A MORATORIUM ON CAPITAL PROJECTS

(With the exception of critical building and infrastructure projects) and encouraging local governments to do the same. We can wait to build newer buildings, assess the current space utilization to maximize efficiency and instead use that money to invest in infrastructure and get Utahns back to work. 

According to the data available, we will spend about $300 million in new buildings on college campuses alone. The pandemic has taught us that online education could fundamentally change the way we teach going forward. Before we invest this kind of money, we should regroup on what we have learned and apply this money to the tax relief efforts for Utahns.

3. UTILIZING THE STATE’S BONDING CAPACITY TO FREE UP REVENUES

This needs to be evaluated and done modestly to maintain Utah’s AAA bond rating.  Freeing up cash will allow the state maximum flexibility to help Utah’s economy and get all Utahns back to work.

4. EXPLORING OPTIONS WITH THE SCHOOL TRUST LAND FUND 

To provide assistance to support education funding during emergencies only, we could explore options of utilizing School Trust Lands. Because the Permanent State School Fund distributions are defined in the Utah Constitution, any changes would require significant time, the legislature and the education community to be in agreement so specific emergency ideas could be presented to voters for their approval. This option should be evaluated carefully by all shareholders. But, because properly funding public education is a top priority to citizens, all options during emergencies should be evaluated.

5. ELIMINATING FRAUD, WASTE AND ABUSE

When government is forced to come up with a solution in the middle of a crisis, they give out no-bid contracts and may force taxpayers to overpay. By looking around the corner and preparing for the future emergencies, we will be more prepared and more efficient, and we can save taxpayer dollars.

In addition, state employees, who are in the trenches every day, know where the true savings can be found. By trusting them and encouraging them to identify ways to save taxpayer money, we can continue to have the best managed state in the country. When employees feel ownership and investment, they can create the most effective and dramatic savings.


TAX RELIEF

The best thing the state can do to help financially bolster Utahns, is reduce their tax burden and allow them to use their financial resources to provide the necessities for their families. Each of these suggestions will help Utahns stay in their homes and put food on their tables.  With our funding ideas above, along with our large “rainy day” funds and a AAA bond rating, the state could help offset the cost of some of these immediate suspensions.

1. SUSPENDING STATE INCOME TAXATION OF UNEMPLOYMENT BENEFITS

No Utahn should be penalized for having to collect unemployment benefits during a time of crisis. There should also be assurance that the caps are evaluated and that someone who is unemployed is encouraged to get part-time work and will not lose benefits for doing so.

2. SUSPENDING THE STATE AND LOCAL SALES TAX ON FOOD

We don’t need to make it more difficult for Utahns to feed their families. The state is charging a sales tax rate on food of 1.75% and local governments can opt-in to charge an additional 1.25%. Statewide, currently, all Utahns are paying both for a total of 3.0%. 

Depending on how long the suspension is in place, it would cost the state about $12 million per month or about $140 million per year.  The local sales tax portion would be around $8 million per month or $100 million per year ($8 billion in sales at 1.25%). If local governments want to continue charging the 1.25%, they can make their own local decision.  The Wright Bishop administration wouldn’t ever stand in the way of local decision making.

3. CREATING A TEMPORARY “PANDEMIC ABATEMENT PROGRAM” FOR PROPERTY TAXES 

This would provide relief to low- and moderate-income property owners who have lost their jobs. We already have an affordable housing crisis in Utah, we can, and should, help Utahns stay in their homes as they strive to reenter the workforce.  With the Truth-In-Taxation process that is already in place, this option is viable to give those in need relief.

4. ALLOWING FAMILIES TO ACCESS TO THEIR 529 ACCOUNTS PENALTY FREE DURING THIS CRISIS

Utahns should not be penalized for accessing money they have already set aside.


INVESTMENT 

We have to plan for the future, and work to make sure our economy can withstand the unpredictable by preparing our workforce, our public and higher education system, and our government services to further utilize technology and adapt.

In order for Utah’s economy to reach its full strength and be more resilient, we need to sustain our momentum with long-term investments.

1. RETRAINING UNEMPLOYED UTAHNS USING UTAH’S VOCATIONAL SCHOOLS

Inevitably some of the jobs in industries like retail, tourism, and restaurants will be reduced, but we can provide critical training for Utahns looking to pivot to a different industry. Currently, Utah has a shortage of teachers, emergency services personnel, mental health professionals, etc. We can use this unfortunate time of crisis to fill these shortages using our state institutions to get Utahns back to work.

2. INVESTING IN OUR RURAL COMMUNICATIONS AND INFRASTRUCTURE

If we can connect Utah, we can conquer this crisis. We can expand remote learning and certification programs and give Utahns the chance to telework, but only if Utahns have equal access to technology and connection, regardless of where they live or their economic status.