Last week's economic reports were slightly positive, with six of the 10 major indicators improving. (To see all of last week's reports, see the Latest Economic Reports section below.) However, most of the positive reports were modest in nature. The economy continues to shuffle through the third quarter at a slow pace. The housing sector continues to worsen in the wake of the end of the homebuyer tax credit in April. Consumer purchases remain weak despite a slight upturn in confidence, and manufacturing activity is slowing.
Dave Huether
Campaign seasons resurrect the worst economic policies around, and this year is no exception. Salt Lake County Mayor Peter Corroon, the Democrat candidate for Governor, is proposing tax policies that would chase economic development out of Utah, and into other states or countries.
Over the past two decades your Taxpayers Association has led the charge in eliminating sales taxes on business inputs. Taxing business inputs dampens business investment. It also results in double taxation, since the sales tax on the final product is also applied to the sales tax cost in the business input.
Unfortunately, we have not been able to completely eliminate sales taxes on all business inputs.
Instead, we have eliminated these taxes piecemeal. Last year the Legislature eliminated the sales
tax for business inputs for web search portals. Previously, the Legislature eliminated sales taxes on mining equipment. Before that they eliminated sales taxes for manufacturing equipment. The elimination of these sales taxes on business inputs has helped make Utah a destination for companies fleeing states like California. In just the past few months, Utah’s business-friendly tax climate has lured Oracle, Ebay, Electronic Arts, Twitter and Adobe to expand in Utah. These investments have brought well-paying jobs and higher assessed valuation, both of which help improve Utah’s public schools.
As part of his recently announced education plan for Utah, Mayor Peter Corroon lamented this trend away from taxing business inputs. He looks at this important tax policy through a rearview lens. In his view, Utah hasn’t been making progress towards removing sales tax from all business inputs; rather, since 1981 the Legislature has “increased” the number of “sales tax exemptions” from 11 to 81. As he sees it, this multiplication of “sales tax exemptions” has sapped the state’s ability to pay for public and higher education.
His solution is equally backwards. Instead of aggressively pursuing further economic development by further eliminating sales taxes on business inputs; he believes “sales tax exemptions should be subject to review and re-approval every five years.”
That degree of economic uncertainty is guaranteed to scare would-be investors away from Utah. Rather than risking their investment in a state that could soon be taxing their business inputs, investors will look to build in states that may have no income tax, or a lower sales tax, etc. With capital markets fluid internationally and domestically, Utah is also competing with emerging nations with much lower labor costs. To remain economically competitive, the state simply cannot afford to erect impediments to investment and entrepreneurship.
September 7, 2010 – Quick Manufacturing News
In a new survey 45% of HR managers said their greatest staffing concern is employee training and development. Retaining top performers came in second, with 27% of the response. Click to continue
September 7, 2010 – Quick Manufacturing News
Majority believe developing a strong manufacturing base should be a national priority Click to continue
September 7, 2010 – Quick Manufacturing News
In week 33, 2010, total traffic for all imports entering U.S. ports was up 20% compared to the same week in 2009, according to U.S. import market data compiled by Zepol Corp. For the year to date, overall traffic continues its pace of being up 15% over the same period in 2009. Click to continue
September 7, 2010 – LateWire from Manufacturing.net
Labor Secretary is defending President Obama's efforts to combat recession and unemployment, saying his focus has been on helping the jobless and underemployed ... continue
Various states and environmental groups have filed separate challenges to the Environmental Protection Agency’s tailoring rule, by which it is applying burdensome new Clean Air Act regulations to the largest stationary sources of greenhouse gases around the country. Environmental groups are likely to challenge EPA’s decision to initially exempt smaller facilities (they’ll get to them later), while the states are likely to challenge EPA’s plan to retroactively limit its previous approval of pollution thresholds in State Implementation Plans. The NAM and other members of our greenhouse gas litigation coalition on Aug. 30 filed motions to intervene in the U.S. Court of Appeals for the District of Columbia Circuit, seeking to ensure that the interests of manufacturers are fully presented to the judges. See the Manufacturing Law Center’s entries for Center for Biological Diversity v. EPA (motion) and Alabama v. EPA (motion).
The National Association of Manufacturers (NAM) and other industry groups filed a brief (available here) on Sept. 2 urging the U.S. Supreme Court to consider American Electric Power Co., Inc., v. State of Connecticut. As the Manufacturing Law Center’s entries summarize, this is the most prominent case attempting to litigate global warming claims. In a September 2009 ruling, the U.S. Court of Appeals for the Second Circuit allowed eight states to sue six major electric utility companies for creating a public nuisance through their greenhouse gas emissions. The two issues addressed in the NAM’s brief:
- Whether climate change tort claims are non-justifiable “political questions” because courts lack the resources and tools to resolve them in a principled manner.
- Whether plaintiffs lacked standing to pursue such claims without pleading specific allegations of conduct traceable to each particular defendant and which plausibly demonstrated both the necessity and efficacy of abatement.
Our brief argues that this case is far from the "ordinary tort suit" as the appellate court approached it. Instead, it is quite extraordinary, and the judiciary "has no experience dealing with public nuisance litigation created by a global phenomenon resulting from the release of greenhouse gases by a vast number of sources (including natural events) worldwide -- very few of which are subject to the jurisdiction of American courts or under the control of these defendants. In entertaining standardless public nuisance litigation, the court has arrogated to itself the role and responsibilities that, in the U.S. system of representative democracy, belong with the political branches of government. Joining the NAM in the brief were the American Chemistry Council, American Coatings Association, National Petrochemical and Refiners Association, Property Casualty Insurers Association of America and the Public Nuisance Fairness Coalition. Counsel of record is Richard O. Faulk of Gardere Wynne Sewell LLP in Houston. The law firm issued a news release on its role in the litigation, “Gardere Attorneys Faulk, Gray Fight Climate Change Litigation in U.S. Supreme Court.”
OFFICIAL: OBAMA TO BACK BUSINESS TAX BREAKS
September 7, 2010 – Today in Manufacturing.net
President is expected to call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011 ... continue
OSHA WANTS TO RE-TOOL ON-SITE CONSULTATIONS
September 7, 2010 – Quick Manufacturing News
The changes will provide the agency greater flexibility for inspecting worksites that are undergoing an on-site consultation visit and those that are granted Safety and Health Achievement Recognition Program status. Click to continue
PUT SOME 'REAL TEETH BEHIND MADE IN AMERICA POLICY' SAYS INDUSTRY GROUP
September 7, 2010 – Quick Manufacturing News
'Congress and the Administration should avoid gimmicks like rebate checks for taxpayers that will likely result in increased purchases of imported consumer goods,' said The Alliance for American Manufacturing. Click to continue
SAVE OUR SECRET BALLOT: PROTECT YOUR RIGHT TO A SECRET BALLOT
September 7, 2010 – Utah Taxpayers Association Newsletter
Campaigns are well under way across the state, and many candidates are focusing on the need to rein in spending and lower the nation’s debt. One key issue Utah taxpayers must consider is “Amendment A,” or the “Save Our Secret Ballot” Amendment (SOS Ballot). If approved by a majority of Utah voters this fall, SOS Ballot inserts a guarantee into the Utah constitution that every election, even for employee or individual representation, be by secret ballot.
Why Utah needs Amendment A
As President Obama took office, he and his congressional allies promised national labor unions that they would pass the “Employee Free Choice Act” or EFCA. Under EFCA, unions could veto employees’ right to a secret ballot, and instead require that each employee’s vote in unionization elections be public. If each employee must cast their vote in public, union leaders can identify which employees aren’t supporting the union position, and may need persuading.
Most Utahns and most Americans assume that secret ballots are a basic constitutional right, but union leaders prefer avoiding secret ballots in unionization elections. In fact, Teamsters President James Hoffa asked, “Since when is the secret ballot a basic tenet of democracy?” (Teamsters press release 3/10/09) The rise of the Tea Party movement and key changes in the Senate put passage of EFCA on hold in Congress. However, Congress will come back into session after the November elections. At that point, President Obama and EFCA’s union supporters would have several opportunities to pass EFCA. For example, they could place EFCA into a “reconciliation” budget bill like they did in passing their healthcare initiative. As with President Obama’s healthcare initiative, using a reconciliation budget bill would prevent opponents from filibustering the bill.
Prior to the election, that maneuver would be politically untenable. Afterwards, though, the calculus changes completely. Majority Leader Harry Reid (D-NV), and Senators Barbara Boxer (D-CA), Michael Bennet (D-CO), Russell Feingold (D-WI), Blanche Lincoln (D-AR), and Patty Murray (D-WA) will return to the lame-duck session, having either been narrowly re-elected, or narrowly defeated. If they’ve won, their union supporters will insist that they pass EFCA. If they
lose, they’ll join Senators Evan Bayh (D-IN), Charles Burris (DIL), Christopher Dodd (D-CT), Edward Kaufman (D-DE), and Arlen Specter (R/D-PA) as lame ducks who no longer care what taxpayers think, and may be willing to pass EFCA.
Either circumstance gives congressional supporters another chance to pass EFCA. Some observers even wonder if this is why, for the first time in U.S. history, both the House and Senate have failed to pass a formal budget this year. With no formal budget passed, a lame-duck Congress could consider everything part of a “reconciliation” bill.
To protect Utah employees, in 2009 your Taxpayers Association worked with Representative Carl Wimmer to put Amendment A before the voters. The SOS Ballot modifies Utah’s state constitution to include: “All elections, including elections under state or federal law for public office, on an initiative or referendum, or to designate or authorize employee representation or individual representation, shall be by secret ballot.” Voters in Arizona, South Carolina and South Dakota will consider similar SOS ballots.
Voting YES on Amendment A establishes a constitutional right to a secret ballot, so no one will feel intimidated to vote a certain way, whether that pressure comes from the union boss or the employee’s boss. With a secret ballot, you’re the boss.
Will SOS Ballot be legally challenged?
EFCA’s union supporters will claim a federal law allowing unions to take away your right to a secret ballot trumps a state constitutional amendment. As SOS Ballot went through the legislative process, that was the constant cry of our opponents. However, EFCA only permits unions to take away your right to a secret ballot; it doesn’t require them to do so. Under relevant constitutional precedents, state constitutions can forbid what federal law merely allows. After all, the federal government may not take the right to a secret ballot seriously, but Utahns prize that fundamental right.
In a time when the federal government sees no limits to its authority, protecting Utahns’ right to a secret ballot is a fight worth having. In fact, Utah’s Attorney General Mark Shurtleff, who serves on the Save Our Secret Ballot Advisory Board, has already said, “Given the fundamental importance of individual’s right to a secret ballot, I would welcome the opportunity to stand in (its) defense.”
By voting YES on Amendment A, Utah has an opportunity to protect itself and to tell Teamsters President James Hoffa that he’s dead wrong – the secret ballot is a basic tenet of our democratic-republic and deserves constitutional protection.
UTAH ENERGY INITIATIVE
10-Year Strategic Energy Plan
September 7, 2010 – Governor’s Office of Economic Development
On June 8, 2010, Governor Herbert launched the formal planning process for the Utah Energy Initiative, including the 10-year strategic energy plan.
"I have assembled an astute and diverse working group to provide oversight and general recommendations, and to facilitate input from all interested parties and stakeholders."
"In my State of the State address, I announced my intent to create the Utah Energy Initiative—a 10-year strategic energy plan that combines Utah's rich abundance of diverse natural resources with our innovative and entrepreneurial spirit to ensure that Utah is at the forefront of solving the world's energy challenges."
"Initiatives and Objectives
- Ensure Utah's continued access to our own clean and low-cost energy resources.
- Develop and deploy new cutting-edge technologies that combine Utah's traditional fuels with future opportunities for renewables.
- Create new energy-related manufacturing opportunities and jobs in Utah.
- Address future transmission, generation, and other infrastructure needs, largely through regulatory reform.
- Promote energy efficiency and conservation.
- Expand and facilitate responsible development of Utah's energy resources, including traditional fuels, alternative fuels, and renewable fuels.
- Expand opportunities for Utah to both market and export fuels, electricity and technologies to regional and global markets.
- Enhance and further integrate partnerships between industry, universities, state government and local communities—especially those in energy-rich rural communities—to address future energy challenges and opportunities.
- Collaborate with other Western states to present a strong and unified voice to federal regulatory agencies on energy and public land issues"
UMA President Tom Bingham is a member of the “Job Creation and Manufacturing” subcommittee, charged with reviewing state policies aimed at creating jobs in the Utah economy.
The Governor's 10-Year Initiative will have the following public hearings. You are cordially invited to attend and provide testimony. For more information about the Governor's 10-Year Plan, please visit: http://www.energy.utah.gov/governorsenergyplan/index.htm
Price - Sept. 8th
5:00 - 7:00 pm
Carbon County Court House
120 East Main Street
Price, Utah 84501
Cedar City - Sept. 9th
5:00 - 7:00 pm
Hunter Conference Center, Charles R. Hunter Room
405 West University Blvd.
Cedar City, Utah 84720
Salt Lake City - Sept. 14th
5:00 - 7:00 pm
State Office Building, 1st Floor Auditorium
300 North State Street (Capitol Hill)
Salt Lake City, Utah 84114
Vernal - Sept. 23rd
Western Park
3:00 - 5:00 pm
Uintah County Western Park
300 East 200 South, Vernal Utah 84078
If you wish to testify, please contact Ashlee Buchholz, our initiative coordinator, and register for one or more of the hearings. Ashlee can be reached at this email address or at 801-538-1621.
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