Econ commission preps for 2nd year in uncertain economic times

Brice Wallace 

The Utah Unified Economic Opportunity Commission is diving into its second year of activity amid troubled economic waters.

At its most recent meeting, the commission established working groups to focus on certain issues this year but also heard from an economist about today’s “uncertain and complex time.”

“I just have never seen a time in my career when I’ve seen such a crashing of cascading events,” Natalie Gochnour, an associate dean in the David Eccles School of Business at the University of Utah, director of the Kem C. Gardner Policy Institute at the UofU, and chief economist for the Salt Lake Chamber, told the commission.

Those events include Russia’s invasion of Ukraine; economic changes due to high inflation, higher interest rates and a tight labor market; and the possibility of a recession.

“I don’t think there’s been a time in my career where I’ve seen so many moving parts that are asymmetrically lined up to be negative,” she said. The Russian invasion, she added, “changed a lot of things, and we’re in a different world right now.”

On the plus side, the invasion likely won’t have a big impact on Utah’s international trade. Its exports to Russia are only about $20.4 million and to Ukraine are only $8.9 million annually. The impact so far has been primarily on gasoline prices. “We’ve been through high oil prices many times in our state’s history, and markets do recover,” she said.

Gochnour strove to dispel the belief that Utah’s strong economy somehow insulates it from the nation’s situation.

“I wanted to make a really clear declaration to all of you, as you look at these headwinds, that there is a real temptation to say that Utah has its own dynamics and performs so well — top-performing — that we can be immune from these macro events occurring in the economy. And I want to be really clear that that is not true.”

Yes, she acknowledged, impacts from economic trouble in the nation typically are “softer” in Utah, but job growth, personal incomes and other economic indicators in Utah tend to track the same as national trends.

“You can see how we are absolutely in sync with the national economy, sometimes more than others, but the peaks are the same, the troughs are the same,” she said, although “our lows are higher and our highs are higher.”

“Make no mistake about it: We will be impacted by national economic woes,” she said. “So, there’s a lot of uncertainty and there are some headwinds.”

Gov. Spencer Cox, the commission’s chairman, added COVID to the list of uncertainties, stressing the possibility that China could be shut down, like it was in 2020, when the rest of the world is recovering from the pandemic. He also noted that the Russia-Ukraine conflict could affect wheat prices, which could cause prices for food worldwide to rise.

“There are so many dominoes lined up that I think it’s a time to be incredibly cautious,” he said.

“Utah is doing phenomenally well, and I remain optimistic that we’ll weather this better than others. … But I’ve always likened it to a racecar with the parachute deployed. It doesn’t matter how fast we are, the rest of the nation is that drag and that parachute, and whatever happens nationally is going to happen to us.”

What’s happening for the commission is a set of new subcommittees/working groups to tackle new issues for 2022. The commission was created by the Legislature in the 2021 general session and presented 26 new policy initiatives to the Legislature for the 2022 session.

Dan Hemmert, the commission’s vice chair and executive director of the Governor’s Office of Economic Opportunity, said the commission’s work last year “resulted in very real policy shifts in the state of Utah and some meaningful monetary appropriations to further the efforts of this commission.”

With its 2021 work completed, the commission recently disbanded most of last year’s working groups. Legislatively required to continue are those related to talent, housing affordability, and women in the economy. At its most recent meeting, the commission voted to form groups focused on water infrastructure, growth and transportation, government efficiency and cooperation, and innovation. Members representing rural Utah and the interests of diversity, equity and inclusion will be integrated into all working groups. Cox, the Senate president and House speaker will appoint working group leaders.

With an eye on the 2023 legislative general session, the working groups in July will present high-level policy ideas. In September, they will present finalized items for the commission to consider in its recommendations to legislative interim committees or for inclusion in the governor’s budget.