Center for Free Enterprise
Through the First Freedom PAC, Jonathan Johnson has been promoting an amendment to state constitutions, including Utah’s, to legally protect a church’s ability to only marry who its clergy desires to, in accordance with the church’s doctrine and practice. We believe that religious belief and practice is an extension of individual liberty, and therefore “religious liberty,” as it’s usually called, deserves the same attention and support.
This battle, however, is in anticipation for a future that has not yet arrived—and, of course, proponents hope it never will. By strengthening state constitutions in this regard, supporters intend for churches to never face legal repercussions for refusing to marry a homosexual couple, for example, should their doctrine or custom lead them to choose not to. Strategizing in anticipation of future battles has its place, but we must also keep an eye on current skirmishes lest they escalate into open conflict. In several states already, discrimination laws have given legal standing for successful lawsuits against owners of businesses who prefer not to offer their goods and services to another individual. This violation of property rights is a current battle in this country that merits a proactive, defensive response in Utah.
On December 5, 2013, the 18th amendment to the U.S. Constitution was repealed, terminating the federal prohibition on “the manufacture, sale, or transportation of intoxicating liquors.” A failed 13-year experiment on commercial restriction ended, pushing the issue back to the state level. Utah is thought to have been the necessary 36th state to ratify the 21st amendment (that repealed the 18th), but Ohio and Pennsylvania ratified it on the same day, and Maine ratified it the day after. (So even if Utah didn’t vote to repeal, it would have passed.)
It’s worth reviewing some of the effects prohibition had on public policy, as we then address similar policies that remain at the state and local level.
For those who desired to obtain illicit substances during the prohibition era, the black market was readily available. Outlawed products were available, but rather than being cheap, safe to acquire, and legal, they were thrust into the domain of crime, gang warfare, violence, and racketeering. Prohibition directly fueled the rise of organized crime in America, providing a financial foundation upon which this threat could exponentially escalate. A study of 30 major cities during 1920 and 1921 (early years in the prohibition era) shows that crime increased by 24 percent, theft and burglaries by 9 percent, homicide by 12.7 percent, assaults and battery by 13 percent, drug addiction by 44.6 percent, and police department costs by 11.4 percent.
As the annual tradition of Thanksgiving leads us to once more gather with family and friends to share experiences and express gratitude for our possessions and circumstances, it’s important to recognize the central role played by the market.
It’s common for these celebrations to feature a variety of food—turkey, mashed potatoes, stuffing, pies, and other items. For most of us, there are several large grocery stores located nearby, each featuring many options for each needed ingredient. In other words, we are surrounded by abundance and variety, both of which are products of a free market system.
To understand this relationship, consider its inverse: a centrally planned economy overseen and regulated by a government body. Russia under Stalin and North Korea today are clear examples of dangers of suppressing a free market. State Planning Commissions arbitrarily set production goals, prices are fixed, and scarce resources are dedicated only to a select few products and services. As a result, there is rarely any substantial selection of consumer goods. Abundance and variety vanish.
With the development of the Lake Golf Course at Wasatch Mountain in 1967, the state of Utah began ownership and operation of golf courses. Since that time, an additional five government-run courses have been developed around the state. None of them justify the subsidy of taxpayers to drive down the cost for those who desire to use these courses.
Worse, poor planning has placed these golf courses away from any large population of regular golfers, thus requiring marketing and other efforts to attract golfers who live long distances away and must travel long distances to reach the course. For this reason, among others, all of the courses have been experiencing a decline in use. Now is the time to sell them off and extricate the state from an area of enterprise in which it may not legitimately operate.
In 2012, the state commissioned a report from National Golf Foundation Consulting “to assist with evaluating the Utah State Parks golf system and to make recommendations to help ensure the long-term viability of the golf program.” Their core findings highlight the “competitive disadvantages” of the government-owned golf courses, and point to six key areas of deficiency:
The Governor’s Office of Economic Development exists, in its own words, to “provide rich business resources for the creation, growth and recruitment of companies to Utah and to increase tourism and film production in the state.” In layman terms, they try to attract businesses to the state by luring them in with tax credits. In exchange for setting up shop in the state and meeting certain criteria (such as employing a projected number of people), their tax burden is reduced on a “post-performance” basis.
GOED’s board of directors met last week, in part to fulfill this mission. In less than an hour, and with no discussion prior to voting or any dissenting votes, the board unanimously approved over $4 million in tax incentives for two businesses, and over $1 million in similar incentives for five films looking to use Utah for part or all of their locations. (There was discussion on each motion, but, oddly, the questions being asked and things being said were deferred until after the votes were already taken.)
The first of the two companies being offered a tax credit was Frontier Communications—a telephone and broadband provider operating in 27 states, including Utah. They want to expand their operations and create a customer service center, and were deciding between Colorado and Provo, Utah. “We’d obviously like to see them here,” said Jerry Oldroyd, the board member presenting the motion. With a forecasted employment of 550 employees and $11 million in revenue for state coffers over the next ten years, the board unanimously agreed to reduce Frontier’s tax burden by 20% with a tax credit not to exceed $2.2 million. The revenue projections and tax credit for the second company, Exeter Finance, were similar in size and impact.
I have never tasted an alcoholic beverage in my life. I don’t see the need, I have no desire, and recognizing the dangers drinking can produce, I caution others to avoid it.
In other words, I am like many Utahns: socially conservative with adherence to a health code that requires abstinence from certain substances. But I differ from many of these individuals in that I do not believe I have the authority to impose my health code and personal preferences upon other people.
Hyde Park, Utah, has long been a “dry” city where alcoholic beverages are legally prohibited. An ordinance allowing for licensed, limited alcohol sales narrowly passed the city council last year on a 3-2 vote. Some residents, upset with the outcome, collected enough signatures to put the ordinance on hold and put the question before the city’s 4,000 residents.
By Ben Porter
The story of the Kaysville power plant
Kaysville is a mid-sized city with a population around 28,000 that sits in the heart of Davis County, Utah. Along with 22 other municipal purchasers in Utah, six purchasers from California, and six cooperative purchasers, Kaysville supplies its residents with electricity through the Intermountain Power Agency’s (IPA) Intermountain Power Project (IPP).
Kaysville, along with Bountiful city, acquired partial ownership in IPP in 1982 as part of a “calculated risk” in the event that power prices were to rise unexpectedly. By using the revenues generated from the sale of power to California, the city was able to provide the funds for the city’s share of operation and maintenance costs.
On its face this seems like a good idea. By allowing the government to take such commercial action on behalf of the people, it is theorized that the community as a whole will benefit. After all, by using the bulk purchasing power of government, the people can receive their electricity at a much lower cost than if they were to go it alone. (The same argument is used in support of government-organized health insurance exchanges.)
Nilsen Septon had a dream of owning his own restaurant—considering himself, in his own words, “crazy enough” to do so. Thus began an arduous path towards his restaurant, Nellie’s Diner, opening for business in the first floor of the Zion’s Bank Financial Center.
Delays plagued the process; Septon initially hoped to be open “by Thanksgiving of 2010, then by early March, then by April 21 (BYU Graduation), then May, then by July 4, then August, September…” One of his greatest challenges was raising the funds needed to build and operate the business. On January 31, 2012, Septon wrote:
The fact is, I’m not sure how to get funding because I’m still working on it…unfortunately. See, I had the project planned out and funding arranged until part of it didn’t come through. So for the past several months, I’ve been working on getting the funding that I need in order to open…
At the time of that post, the buildout was almost complete. Other sources of revenue had been raised to get Nellie’s Diner down the path, but Septon needed help making it to the finish line. In an interview with Libertas Institute, he called the economic climate “extremely tough,” noting that “lenders were more apt to fund a tech startup and less likely to fund a restaurant.”
The Economist is the latest in a string of national publications to extol the virtues of Utah’s economy. Their article “Busy bees” focuses on Utah’s low unemployment rate, friendly business climate, and burgeoning tech sector, while cautioning readers about the challenges within our education system, population growth, and funding allocations. But with popular recreational opportunities, a well-educated workforce, advantageous geographic locations, and natural resources aplenty, Utah certainly has a lot to offer workers, businesses, and families. There is much to celebrate about our great state. Like many of you, I choose to live here for the remarkable quality of life Utah offers.
When appropriate we applaud politicians in Utah for their fiscal discipline and principled approach to governance—the fruits of which are enjoyed by all Utahns. Rather than accuse public servants of cognitive dissonance on certain issues, I’d prefer to give them the benefit of the doubt in assuming they approach their work with an earnest desire to do what is right for their constituents, if not all Utahns. My hope in writing this article is to redirect our attention towards those virtues which lend to the improvement of our lifestyle, shrink wealth gaps, promote equality, expand freedoms, and create opportunity for all.