Just over five years since receiving strong criticism from the state auditor, Utah’s Economic Development Tax Increment Financing program (EDTIF) has undergone significant changes. However, a number of questions remain to verify that the program has been optimized. Today, Utah Foundation releases EDTIF Elevated? Utah’s Evolving State Incentive Program, which examines recent changes to EDTIF, sets out program results and explores ongoing areas of discussion.
This is the second installment in Utah Foundation’s Economic Development Incentive Series. The first installment, Public Funds, Private Endeavors: A Primer on Local Economic Development Incentives in Utah (February 2019), provides an overview of how local incentives work and several of the key issues surrounding them.
Key Findings of this Report
- While GOED targets six industry clusters for EDTIF incentives, more than a quarter of incentive agreements do not fall into any target cluster. Meanwhile, information technology dominates the other five clusters; one-third of EDTIF tax credit agreements are with information technology companies.
- Nearly half of the companies that have active EDTIF agreements are not taking advantage of the incentives.
- The Utah Legislature and GOED responded to a scathing report on incentives from the Utah Office of the State Auditor with significant changes, including more stringent reporting requirements and regular evaluation of GOED’s tax incentive programs.
- From the perspective of the general public, it is desirable for EDTIF incentives to be deployed in a manner that is strategic, coordinated, effective, efficient and transparent. To this end, there are a number of issues policymakers and stakeholders can explore to verify that the EDTIF program is optimized in these categories and to strengthen public confidence.