Saturday, July 19, 2008

Governor's Office Approves $8.3 Million Tax Incentive Package

GOED puts bags of taxpayer cash on the table, to lure an international airplane maintenance and repair heavyweight to Ogden

Great economic news for Ogden City this morning, with this front page Standard-Examiner article, reporting that the Governor's Office of Economic Development (GOED) has followed through on the story reported last May, and approved a multi-million dollar incentive package to lure an international airplane maintenance and repair heavyweight to Ogden's Hinkley Airport. We incorporate Jeff Demoss's lead paragraphs below:

OGDEN — The state has approved a package of incentives totaling more than $8.3 million to secure Ogden-Hinckley Airport as the expansion site for an international airplane maintenance and repair company.
The Business Development Board in the Governor’s Office of Economic Development approved the incentives for the Swiss company Jet Aviation at a Friday meeting.
The incentives would be awarded on a post-performance basis, meaning the company would have to meet specific benchmarks in terms of jobs and other economic contributions to get the money.
According to this morning's story, Jet Aviation will occupy the 91,000-square-foot facility at the Gateway Center, which was vacated by Adam Aircraft last winter, when that fly by night company went unceremoniously belly-up. Unlike the now defunct Adam Aircraft however, Jet Aviation appears to be robust and viable; and can be reasonably expected, we think, to deliver these significant benefits to our local economy, as projected by the gnomes at the GOED:
• 650 new locally-recruited jobs;
• Wage scale 50 percent above the Weber County average;
• $6.9 million of its own investment in the expansion of business operations;
• $420 million in new state wages;
• $28 million in new state tax revenue.
As our gentle readers have to be painfully aware, Weber County Forum isn't overly fond of of the whole concept of awarding taxpayer handouts to private entities. Unfortunately, corporate welfare is integral to the the economic development game as it's currently played in America; so we'll just bite our tongues, reluctantly go with the flow, and close with this observation:

If the taxpayers of Utah are hell-bent to court businesses with bags full of taxpayer cash, it's industry powerhouses like Jet Aviation that we should be courting.

All-in-all, Jet Aviation will be great for the local economy, we believe.

And what say our gentle readers about all this?

4 comments:

danny said...

Rudi said,

If the taxpayers of Utah are hell-bent to court businesses with bags full of taxpayer cash, it's industry powerhouses like Jet Aviation that we should be courting.

Ditto, Rudi.

Simply adding business, people, jobs etc are something the government should DISCOURAGE, since more people almost always make a place worse over all.

But putting a nice company in a vacant building so Kemp's classy airport can survive with fewer subsidies seems okay to me, especially since taxpayers across the state will be getting hit for the money.

Hahaha! Suckers.

piccolo said...

It's great to lure in companies to help improve the local economy, but I have two problems with this. First, why should the state government fund tax incentives for one small county in Utah? Is it fair to make people in San Juan or Grand county fund this? They might get some economic benefit from it, but those who benefit from it the most should pay for the incentives.

Second, why do we try to lure companies here that wouldn't want to be here without the incentives? This means that someday they may get up and leave when we least expect it. This sort of thing is one cause of major ups and downs of local economies. It's much better to help build up local companies that are steady and here to stay. We should spend more time growing our own economy rather than transplanting in new plants that don't often grow their roots deep and stay.

Bill C. said...

I seem to have noticed a difference in this state approach. These are incentives, based on performance. The money will not be simply given away like Ogdens' development bunch does it. What a novel approach.
I could sense lying little matty, true to form, had to get another whooper in his response regarding the City's gift to Kemp. It was a pre- requirement to the state deal. Say what, Kemps recieved a couple of these tax payer gifts, based on luring Adams.

disgusted said...

in another article in the paper yesterday the state indicated that it expected a budget short fall of at least 100 million dollars. one has to assume ogden will feel similar shortfalls. state has a rainy day fund to cover the state for this year and is looking to cut budgets for next year.
city council and the administration of ogden need to start thinking along the same line and ogden does not have a rainy day fund. ogden has increased its budget over last year and has taken the carry over from last years budget and are going to spend that this year as well.

ogden city stop any spending city money for business development projects that you probably dont have due to reduced tax revenue reciepts. city council should listen to the state officials rather than to the city mayor for guidance as to the health of our local economy and the citys expected budget or income.

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