January 1, 2012

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Legislative Roadmap

The 2012 Session Will Tackle Issues that Impact Your Business

Wesley Smith

January 1, 2012

In today’s world, it is hard to separate elected officials and their decisions from business.

Many industries are heavily regulated and their regulatory environment often dictates business decisions—healthcare, energy, education, technology and transportation, for example, are each strongly impacted by government policy.

In many cases, large businesses benefit from economies of scale in maneuvering around hurdles or embracing opportunities created by government policy. By necessity, many small businesses have less time and resources to devote to government and regulatory affairs intelligence.

This brief synopsis of the 2012 Utah Legislative Session is for small businesses looking for a leg up this year. Consider this a strategic report from your very own vice president of government relations intended to bring your business some additional information to help you make important decisions.


Of course every business is interested in the direct impact of taxes on its bottom line. In recent years, the pre-session talk has been about how to raise revenue or decrease spending to manage a budget deficit. This year, Utah has a budget surplus as well as growing revenues, which will significantly change the conversation.

Predictably, this surplus eliminates the need for tax increases. Given recent history, you can expect the surplus to be used wisely to pay down government debt and strategically invest in areas that have been most affected by recent budget deficits, like education and the Utah Science Technology and Research initiative (USTAR).

This year will likely not be the best timing for meaningful tax reform (91 of 104 Utah legislators are up for election in November), but the groundwork will be laid for substantial reform in coming years. Small businesses would do well to engage in this effort by reaching out to legislators to get a feel for changes that are on the table, including consolidation of earmarks, changes to the special rate on food and adjusting income taxes to name a few.

Get in the game now, as the wave is swelling for meaningful tax reform, both federally and at the state level.


It is projected that for continued economic growth, Utah’s economy will require two-thirds of its residents to possess academic degrees or skilled trade certificates by 2020. Large and small Utah businesses alike need a well-educated workforce if they are to thrive.

During difficult budget years, Utah (and every other state) has been in a precarious position as it relates to investment in education. For instance, since 2007 higher education enrollment has grown 21 percent while higher education appropriations have decreased 7.5 percent. Public education has also experienced a decrease in resources.

This year, things will change. Expect strategic investment in both public and higher education this year. The governor has proposed a budget that includes funding public education growth as well as investing in higher education, and legislators seem committed to strategic investment in education.

The USTAR effort, for instance, has resulted in a constant stream of technology startup companies springing from our research institutions. This effort has been scaled back in recent years due to budget constraints, but you can expect a renewed commitment to USTAR by way of an increased appropriation to this successful program.


For the past several years, immigration has been a hot issue in Utah and throughout the nation. You can expect more immigration debate in the Utah Legislature this year. For business the issue is simple—a need for qualified labor to produce goods and provide services. Utah needs highly skilled and hourly laborers alike.

Expect a vigorous debate of Utah’s guest worker law, passed in the 2011 legislative session. Some legislators will seek to repeal the law, while others will seek to amend it. A compromise may be in the works—improve and replace the existing guest worker law.

Mandatory electronic verification with severe penalties for businesses that fail to properly utilize such a system will be considered this year. This could have profound impacts on businesses, especially small businesses that are less likely to have a dedicated human resource professional to head up the new processes necessary to keep pace with new regulations. Furthermore, any regulation with a penalty of a loss of business license is troublesome for business, notwithstanding the good intention behind the regulation.

There will be another attempt to repeal Utah’s law that provides in-state tuition to undocumented children who have attended three or more years of high school in Utah. Some argue this policy is a magnet for undocumented immigrants while others believe it to be a good investment in young people who will either come to rely on social services or become self-reliant through education.

The General Legislative Session is always full of twists and turns but if I were a betting man, I would bet that by and large, this session will be a good session for business.

Wesley Smith is the general counsel and executive vice president of government relations for the Salt Lake Chamber. He can be reached at wsmith@slchamber.com. You can follow him on twitter @wesleygsmith.

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