Fiscal year recruitment/retention up for both GOEO and EDCUtah

Brice Wallace 

Expected job creation from corporate recruitment and retention projects OK’d in Utah during the 2023-24 fiscal year saw an upswing for both the Governor’s Office of Economic Opportunity and its recruitment partner, the Economic Development Corporation of Utah.

For the July-through-June fiscal year, GOEO awarded tax credit incentives to 20 projects expected to create 8,549 jobs over the next few years. That’s up from 16 projects and 3,630 jobs in the prior fiscal year. EDCUtah’s 28 projects are expected to create or retain 8,874 jobs, topping the prior-year figure of 5,152.

As for other corporate recruitment statistics, some metrics were up from the prior year, while some were down. GOEO-approved projects’ average capital expenditure per project rose this fiscal year compared to typical years due to increased investments in strategically targeted industries such as aerospace and defense, information technology and advanced manufacturing.

“Utah’s economic growth trajectory is set for continued prosperity as we surpass records and set new benchmarks,” said Ryan Starks, GOEO’s executive director. “I commend our team for their ongoing efforts in driving investments through the EDTIF and REDTIF tax incentive programs, which are strengthening diverse industries.”

The GOEO projects’ job number of 8,549 was up from fiscal 2023 and comparable to 8,841 in fiscal 2021, but short of 13,364 in fiscal 2020 and 20,478 in fiscal 2022. Nine incentivized projects in rural Utah are expected to result in 1,262 jobs, short of 1,380 in the prior fiscal year. The highest recent number was 8,972 in fiscal 2022.

Capital spending on incentivized projects is expected to reach $2.43 billion, down from $12.34 billion in fiscal 2023 but up from $1.13 billion in 2020. The year-earlier figure was boosted by an $11 billion Texas Instruments project in Lehi. For comparison, the capital spending number was $464.3 million in 2021 and $1.97 billion in 2022.

Fiscal 2024 rural projects are expected to spend $714.8 million, down from $1.26 billion in the prior fiscal year and $1.97 billion in 2022 but above the numbers for 2020 and 2021.

New total wages from the most recent fiscal year projects are projected at $6.3 billion, up from $4 billion in the prior year and $5.5 billion in 2021 but short of $9.7 billion in 2020 and $12.7 billion in 2022. New project jobs are expected to pay 63 percent above the county average in rural counties and 47 percent above the average in urban counties.

New state tax revenue is projected at $539.6 million for fiscal 2024 projects, down from $574.6 million in the prior year. It was $591 million in 2020, $341.3 million in 2021 and $942.4 million in 2022.

As for EDCUtah, it had 28 project “wins” in the 2024 fiscal year, short of its goal of 30 but topping the 26 in the prior year. The 8,874 new-job total surpassed the 8,000-job goal. New projects are expected to absorb 2.4 million square feet, short of the 2.5 million-square-foot goal and the 2.8 million figure from fiscal 2023.

Capital expenditure from the fiscal 2024 projects is expected to reach nearly $9.3 billion, far above the $1.5 billion goal. The most recent number was boosted by Tract spending $7 billion to acquire 668 acres in Eagle Mountain for future data center development. Similarly, the $11 billion Texas Instruments project boosted EDCUtah’s fiscal 2023 capital spending total of $12.2 billion.

GOEO and EDCUtah figures never match exactly because not all of EDCU’s projects go through the state incentive process. EDCUtah’s recruitment contract with the state expired June 30.

The main GOEO recruitment programs are the Economic Development Tax Increment Financing (EDTIF) and Rural Economic Development Tax Increment Financing (REDTIF) programs. They provide a refundable tax credit for businesses performing and creating high-paying jobs in exchange for a temporary reduction in their marginal tax rates. Reductions over typically five to 10 years are up to 30 percent of new state tax revenues for businesses operating in certain industries on the Wasatch Front and in Washington County and up to 50 percent of new state tax revenues for most projects in rural areas.

GOEO does not provide upfront cash incentives. Each year that an incentivized company meets the obligations in its contract with the state, it will qualify to receive a portion of the new, additional state taxes the company paid to the state.

Incentivized jobs must pay at least 10 percent above the average county wage and 100 percent of the average rural county wage. Since its inception, about two-thirds of the program’s tax credits have gone to Utah-based companies to help them expand and create more jobs.

“The great state of Utah continues to attract and retain companies that bring a diverse collection of high-paying jobs that will positively impact our economy,” said Carine Clark, GOEO board chair. “This is the direct result of our combined efforts to improve Utah’s strategic economic plans.”