Tuesday, March 26, 2013 | 6 comments

Lawmakers, or Economic Developers?

By Connor Boyack

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Why are legislators elected? For what purpose do they wield their power? Perhaps more fundamentally, what is the proper role of government?

These questions were all implied in a simple question I asked a few Senators last month during public comment on a controversial bill. The question I asked to each Senator on the committee was, simply, “Who are you?”

I further asked if they were lawmakers or economic developers. The reason for my clarifying question was to draw a sharp contrast between the two; too many legislators abandon the rule of law and focus on economic development, giving tax revenue, job creation, and related economic benefits far greater consideration in their analysis than more important things like whether they have the authority to do what they intend to at all.

And that’s the point I further emphasized, in relation to the bill in question—one which would have provided taxpayer dollars and tax-based incentives to help fund the creation of a mega hotel and convention center in Salt Lake City. “I understand there are compelling incentives and reasons to do so,” I said to the committee. “But I propose that you do not have the authority to do so.”

Indeed, legislators can only exercise the delegated powers that the citizens they govern inherently had to begin with. Nobody possess the moral authority to compel some neighbors to fund the business enterprise of another few neighbors, even if the immediately benefiting neighbors attempt to claim that the economic “rising tide” will lift everybody’s boats.

Of course, this issue is not so insignificant as to only be evident with this one bill; the perceived potential economic benefit of legislation was discussed dozens if not hundreds of times during this past legislative session. It was the main focus of the Governor’s State of the State address this year, and is a theme that has permeated his decisions and statements throughout his time in office. It is the reason why the Governor’s Office of Economic Development (GOED) does what it does, using tax handouts and credits to favor politically-connected winners and losers in the marketplace—giving financial advantages to some companies while unfairly shortchanging their competitors.

Utahns need to better understand the proper role of government and make sure that their legislators likewise understand and abide by that simple philosophy. Protecting life, liberty, and property is a very narrow and limited set of criteria; using existing or future tax revenue in an attempt to try and generate yet more tax revenue (and other private market economic benefits) falls quite far outside of that scope.

Day after day, GOED and other state agencies abuse the law and turn taxpayers into unwitting investors. In a recent example, a Utah company named doTerra recently announced its migration to a new, larger office in Pleasant Grove, and GOED helped make it happen. Some $16 million in tax credits have been offered to the company for meeting some basic objectives—a significant reduction in overhead expenditures which unfairly benefits them over other competitors, such as Young Living Essential Oils, also in Utah.

Whether companies hire new people, expand their infrastructure, generate more sales, or otherwise achieve success is not at all a legitimate concern of the government. Individuals in Utah should not be taxed in order to attract corporations to set up shop in their own midst, nor should tax credits be used as part of a centrally-planned state economy to entice new businesses to come into the state, or favor certain companies already here.

We would like to see legislators recognize and respect their role as lawmakers to restrain themselves to supporting only those laws which further the defense of life, liberty, and property. While we all want to see a vibrant economy thrive in Utah, it should not be done by having government become a central planner and by having its agents become economic developers.

About the Author

Connor Boyack is president of Libertas Institute. He is the author of several books on politics and religion, including the Tuttle Twins series for children.


1 comments
Ty_B
Ty_B

The irony is that the most effective lure for GOOD businesses (those not inclined toward rent seeking ... or rent accepting) is an environment where the government sticks to its proper role and defends a truly free market.

 

The ends our elected officials (and electorate, presumably) currently seek would most effectively be met if they'd only quit trying.

Trackbacks

  1. […] have previously observed how these tax credits are central economic planning, using the tax system to incentivize certain […]

  2. […] need to take off their economic developer hats and realize that their only legitimate function is to secure the life, liberty, and property of […]

  3. […] have often argued that government agents are not economic developers, though they often engage in the practice. And […]

  4. […] unanimously out of committee yesterday. Remarks made during the discussion make clear our point, once again, that legislators should not be economic […]

  5. […] non-governmental functions like museums and film festivals—all under the category of either “economic development” or “heritage and arts,” of […]

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