How the Mormon GOP runs Utah with a collectivist touch

  • Steeples of The Church of Jesus Christ of Latter-day Saints rise above the sprawl of Lehi, south of Salt Lake City on Utah's booming Wasatch Front.

    Ed Kosmicki
  • Matt Godfrey, who just finished three terms as mayor of Ogden, Utah, pushed for downtown redevelopment in buildings such as the former American Can Company, now home to Amer Sports.

    Ed Kosmicki
  • City Creek Center in Salt Lake City, a new downtown project developed by The Church of Jesus Christ of Latter-day Saints.

    Ed Kosmicki
  • The city-sponsored restoration project on Jefferson Avenue, in Ogden

    Ed Kosmicki
  • The church-built Colonial Court apartment complex in Ogden. The church is also renovating its Ogden temple and working on a $250 million mixed-use development surrounding it.

    Ed Kosmicki
  • Utah's mass transit revolution began before the 2002 Olympics with the federally funded TRAX light rail system. It continues to grow with city, state and federal dollars.

    Ed Kosmicki
  • A young family watches indoor skydiving at the Salomon Center sports adventure complex in Ogden, Utah.

    Ed Kosmicki
 

"Our object is to labor for the benefit of the whole ..."

--Brigham Young, 1873

A throng of cars floats down Interstate 15 on an end-of-summer morning, the rising sun wreathed in the orange gauze of distant wildfire smoke. In Lehi, a suburb sandwiched between Salt Lake City and Provo, a massive steel-and-glass shape juts out from the hillside over the interstate, sporting a huge banner that reads "Adobe." It's the 280,000-square-foot first phase of the software giant's new campus, which will house more than 1,000 employees, adding to the 600 already in Utah. Behind the building, rows of new houses are marching up the hillside, watched over by the gleaming white steeples of Mormon meeting houses. A flock of paragliders hangs in the hazy air above the subdivision.

It's a perfect snapshot of Utah's economy, which by nearly all measures is doing quite well. The state has more manufacturing than its neighbors, greater economic diversity, and in August the unemployment rate was 5.8 percent, tied with Wyoming for lowest in the West (Nevada was highest with 12.1). Big businesses like Adobe and Goldman Sachs are expanding their presence here. A lower percentage of people live in poverty in Utah than in most of the nation, and Utah consistently has the best Gini Index score, meaning the wealth is more evenly distributed. In the past year alone, at least a half-dozen media outlets have ranked Utah among the top five places to live or do business, and the Brookings Institution's Metro Monitor consistently gives Ogden, Salt Lake City and Provo top scores in recovery from the recession.

This success has observers asking: What's Utah's secret sauce? Republican Gov. Gary Herbert says that the main ingredient is a laissez-faire, no-government-interference, free-market approach. "This is no surprise to Utah, again confirming that reasonable regulation, low taxes and an unparalleled workforce are the best components to promote economic growth," Herbert told The Salt Lake Tribune in August, after CNBC chose his state as number two for business in the nation. "We achieve this growth by creating the best conditions for the free market to do what it does best."

In other words, Utah -- one of the politically reddest states -- provides an ideal atmosphere for the "We Built It" slogan that the Republican Party has adopted this campaign season. Utah's relatively low corporate tax rate (5 percent) and the Herbert administration's recent effort to streamline regulations have also attracted businesses fleeing states with higher taxes and more onerous rules.

But look a little more closely at Lehi, and a more complex recipe emerges. Adobe may, indeed, have been lured here by low taxes, but $40 million in incentives from the state government, plus millions more in local incentives, also helped. So did the state-funded effort to turn its universities into high-tech incubators of sorts and the taxpayer-funded commuter rail that will be extended to near the company's campus later this year. Adobe employees will overlook the whirling industrial sculpture of state-incentivized wind turbines, along with an even bigger campus of sorts across the valley, a 1 million-square-foot, $2 billion National Security Agency "spy center" funded by federal taxpayers.

We Built It? Sure, as long as the "We" includes a healthy dose of all levels of government involvement, and impressive influence from The Church of Jesus Christ of Latter-day Saints, building on a long history of strong centralized planning and rebellion against unfettered capitalism and the Western frontier individualist ethos. "To the very desirable assets of the Western landscape, they've added good policy," says Mark Muro, co-director of the Brookings Mountain West think tank. "It's not a big government, but they're doing smart things. It's a planning-oriented, smart, lean government."

Rusty Austin
Rusty Austin Subscriber
Oct 30, 2012 04:14 PM
The LDS is nothing but a gigantic tax dodge, to the detriment of everyone that isn't a mormon bishop. What a bunch of hypocrites and thieves. It is appropriate that the IRS is the single largest employer in Ogden, while at the same time the state gives Goldman Sachs $43 million no strings attached. Perfect poster child for today's GOP.
Jeff Gerke
Jeff Gerke
Nov 06, 2012 06:19 PM
I know a lot of LDS people that are not hypocrites or thieves. The type of people that would give the shirt off their back for anyone. Of course there are some bad apples.
Rusty Austin
Rusty Austin Subscriber
Nov 07, 2012 11:37 AM
Jeff, I agree that a lot of LDS people are really good and beautiful people, I have spent many years traveling in the Southwest and have met, partied with, and been helped by them. I should have made clear that I was speaking of the bishops, they are the people that have bought shopping malls and ranches and department stores and gas stations and avoided paying taxes by making those businesses part of the church. By paying those taxes to the LDS instead of the elected local, state, and federal governments, they have created a de facto government within the LDS. I think most Americans agree that churches should not be running governments.
Kathleen Hersh
Kathleen Hersh Subscriber
Nov 11, 2012 07:23 PM
I am curious why in the statistical chart on federal spending the editors chose not to include defense spending. Also there is no indication on the charts whether the government jobs chart does or does not include defense jobs.
Jonathan Thompson
Jonathan Thompson Subscriber
Nov 12, 2012 07:47 AM
Kathleen: Excellent questions. I'll do my best to answer:

1. Typically such comparisons as these don't include defense spending. That's because one could argue that since federal defense spending is for the benefit of the entire nation, it's unfair to put it into a particular state's expense "column" (despite the fact that that spending does benefit that state's economy). Obviously, if defense spending were included, each state's "debt" to the federal government would be much greater.

2. Defense jobs are included in the jobs chart. They are included here because a defense job has an impact on the economy that is similar to any other similar-paying job.

I hope this answers your questions.
 
Kathleen Hersh
Kathleen Hersh Subscriber
Nov 16, 2012 05:38 PM
I guess I am confused as to what the chart shows then. I thought it showed how much money tax payers of a given state send to the federal government and how much money the federal government sends or spends in the state. So if the Defense Department buys planes built in California or spends money to maintain Air Force or Naval bases in Washington that wouldn't show in this chart?
Jonathan Thompson
Jonathan Thompson Subscriber
Nov 19, 2012 12:03 PM
Kathleen,
It's a really good question, and unfortunately I don't have a great answer, although I can tell you why I chose to leave defense spending out.

This type of comparison is going to be messy and inexact no matter how you slice it. That's true if you're trying to figure out whether a particular individual is getting more from the federal government than he/she pays in taxes; it's even more true, I think, when you try to extend it to the state level. But the defense spending thing...

1. The first reason is for consistency's sake. Typically, when this federal revenues vs. spending comparison is done, defense spending is left out. I suspect that this is for the reason I gave before: Because defense spending is for the benefit of the whole nation, it's could be decreed unfair to put defense spending in the "expenses" column for a particular state, even if the spending was done in that state (as opposed to social security, Medicaid, or grants to schools, for example).

2. Of course, this leaves plenty of grey areas like the ones you mention. If a Utah company is paid by the military to build rockets, it's providing jobs to the people in that state, in the same exact way as the IRS is providing jobs to people in that state, for the benefit of the entire nation.

3. This is where it gets messy, and the person who's making a graph like this one has to make somewhat arbitrary decisions about what kind of spending to include, and what kind not to include. The Consolidated Federal Funds Report is set up in a way that makes it easy to pull defense spending, in general, out of the equation. It has two major categories of spending: Defense and Non-Defense. Everything else is a line-item.

So, this is where precedent comes in again: In order to be consistent, I chose to leave out defense, though I had the exact same qualms and questions that you had.

Generally speaking, the overall message remains the same whether you include defense spending or not: Nearly all Western states receive more in federal spending than they collectively pay in taxes. With defense spending added in, things simply become more lopsided for every state. Colorado is the exception to that: Without defense spending, it pays more in taxes than it gets back. With defense spending added in, it, too, has a spending deficit with the feds.

Thanks again for the questions.
Kathleen Hersh
Kathleen Hersh Subscriber
Nov 25, 2012 02:06 PM
Thank you, Jonathan, for your comments. I may have been operating under a misconception or things have changed. Because a number of years ago, I saw numbers that showed that Oregon was a net exporter of federal taxes with the explanation that Oregon has no bases or large military contractors. But that may have been when Oregon's economy was in better shape. And when Oregon wasn't getting timber payments.
I also think that since Defense is something like 60% of Congress's "discretionary" spending that the impact of that money should be noted when we look at the decisions that the western Congressional delegations make.
Jeffrey Mendenhall
Jeffrey Mendenhall Subscriber
Feb 18, 2013 11:13 AM
The LDS heritage of collectivism is an ironic fact of history rarely, if ever, acknowledged by the typically rabid GOP extremists in control of the Utah state legislature. As a former teacher and curriculum writer, I've seen an admirable commitment to education become a hostage to political views so outrageous as to call the word "democracy" a "code word" used by Communists to indoctrinate our children. The Alpine school district went so far as to remove this word from their century-old district charter! The consequence of such utter nonsense is that Utah has the lowest per pupil spending in the US, in part due to our ridiculously high birth rate, lower even than Mississippi. Stupid, selfish, and demonstrably wrong for continued investment into the state (dumbing down a previously well-educated workforce). If governing for the "common good" as Jefferson called it is beyond the ideologues on Capitol Hill in SLC, then simple, basic dollars and cents must motivate semi-enlightened decision-making. Brother Brigham would hate this city, and this state today.