Prosperity 2020 ProspectusAn innovation andinvestment plan to buildthe strongest economyin the nation.
Dear Legislators: Thank you for your dedication and service. Your leadership is key to Utah’s strength in the global marketplace. Utah’s fiscal responsibility, collaborative spirit and forward-thinking actions position us favorably among states. We want to keep it that way. And we want to strengthen our standing. In 2009 Utah business leaders got a sobering report on Utah education from a trusted educational advisor. We learned about the lack of a cohesive education plan. Tradition-bound practices, troubling test scores, low graduation rates, devoted teachers with low morale, and increasing racial and ethnic diversity, combined to inspire a call to action. Recognizing a critical need, the business community organized Prosperity 2020: a call to action for Utah education. Prosperity 2020 is a statewide, research-driven and collaborative movement. Business leaders call for the following actions: n Innovation—Utilize best-in-class technology to more effectively and efficiently educate Utahns n Accountability—Measure performance and hold individuals accountable n Investment—Enhance Utah’s education funding effort Education is a multi-billion dollar enterprise. It employs 148,000 Utahns directly and pays millions of dollars in wages and salaries. More than one in three Utahns attend or work at a school each day. We all depend on Utah schools and post- secondary institutions to nurture and train productive, law-abiding adults who vote and volunteer and raise families. This prospectus presents an innovation and investment plan to build the strongest economy in the nation. It lays out the economic context, education warning signs, visions and goals, and 2013 priorities. We will partner and collaborate with you and educators to enhance our economy by improving educational outcomes. Prosperity 2020. It starts with education. Sincerely, Mark Bouchard Randy Shumway Chair Vice chair
A n i n n o v at i o n a n d i nThe UTAH Economy Education is the path to enduring prosperity. The Utah that once was, is increasingly no more. And Decades of research consistently show that a person’s our economy, as it melds with the forces of globalization, earnings and a society’s wealth are tied to educational is picking winners and losers. Countries, states and achievement. And the premium paid for educational individuals that don’t lead change will be left behind. achievement has never been greater. Prosperity follows Leading change requires planning and action. In a those with knowledge and skills now more than ever. globally competitive and rapidly changing economy, The stakes are high. Utah is in the midst of an complacency is a recipe for decline. We must plan unprecedented economic, demographic and cultural purposefully for Utah’s economic future. transformation. We are growing and diversifying rapidly. Fortunately, Utah has a lot going for it. The Beehive State boasts the fifth-fastest growing economy and sixth-lowest unemployment rate among states. Major international companies like Goldman Sachs, Adobe, Twitter, eBay, American Express and Wells Fargo all have a significant presence here. More consider relocating or expanding here every day. If you want to do business in a state with low business costs, modern transportation infrastructure, fiscally responsible government and high quality of life – Utah is the place. But there is a stark reality that Utah decision makers must face. Poor educational outcomes are economic warning signs. The combination of skilled labor shortages, disappointing educational outcomes and rapid growth in racial/ethnic populations requires action. In the 21st Century, economic opportunity flows to centers of knowledge and innovation. Case in point – Austin, Texas, home of the nation’s This prospectus presents fifth-largest university. Apple recently announced a new $304 million operations center, along with an innovation and 3,600 jobs. Further north, Raleigh, North Carolina boasts three great universities and companies like investment plan to IBM and GlaxoSmithKline. Raleigh ranked as the fourth fastest-growing metro area in the nation from build and sustain 2000-2010. Boston, Seattle, Phoenix and others have all been labeled “the next Silicon Valley.” And for good reason. In the information age it pays to the strongest economy be a tech capital. in the nation.
n v e s t m e n t p la n t o bu Warning Education Signs Rapidly diversifying population By 2050 nearly one-third of Utah will be comprised of racial and ethnic Innovation minorities1. We are diversifying faster than virtually any other region. In many Utah classrooms, things are A diverse population requires early intervention to position students still done the way they were 100 years for success. ago. Educators must embrace disruptive Test scores lower than peer states innovations to achieve success. Technology can extend and personalize Utah 8th graders achieve above the national average on standardized education. It can bring the best math and reading tests, but last compared to states with similar income, teachers to students everywhere. Utah parents’ education and ethnic diversity.2 business leaders endorse innovations Improve college completion in Utah’s education system to improve In the last two decades, Utah has lost the advantage it once held of accountability, efficiency and quality: being among the most highly-educated states in the nation.3 • Computer adaptive testing High school graduation rates 32 in nation nd • Performance-based compensation • Online courses Utah’s high school graduation rate is in the bottom half of the country. • Concurrent enrollment Only 76 percent of ninth graders graduate from high school. One in four • Instructional technology young adults don’t have a diploma. Results are worse with minorities – • Competency-based education fourth lowest in the country for Latinos, with 57 percent graduating, • STEM advancements and tied for second lowest among Asian/Pacific Islander students.4 Investment Utah’s K-12 education funding effort ranks 29th among states Education revenues per $1,000 personal income Utah was once a leader in $60 - educational investment, U.S. Average $50 - but we are now 29th among states in public education $40 - spending per $1,000 of $30 - personal income. We spend less per pupil than $20 - any other state. Money $10 - isn’t everything, but it 8 9 8 7 11 11 12 16 17 19 20 29 25 22 32 33 24 26 29 is an important part of 0- the equation to improve 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 National Rank outcomes. Sources: Census, Bureau of Economic Analysis, Utah State Office of Education, Governor’s Budget Summaries. Calculations by Utah Foundation 1. Utah’s Demographic Transformation, Pamela S. Perlich, David Eccles School of Business, University of Utah, January 2010. 2. School Testing Results: How Utah Compares To States With Similar Demographics,” Utah Foundation, September 2010. 3. Utah Higher Education 2020 Plan 2010 Executive Summary. 4. U.S. Department of Education, Nov. 2012
i l d t h e s t r o n g e s t e c Our and Goals Innovation, Accountability and Investment The largest population of young people in the country will be deployed as the best educated work force, propelling Utah to enduring prosperity. 1 By 2020... Goal 66 PERCENT of Utahns with postsecondary certificates or degrees Some 66 percent of Utah jobs will require postsecondary training by 2018, according to an economic study by Georgetown University’s Center on Education and the Workforce. The projections were refined and adopted by the Utah Department of Workforce Services. Where are we now? 43 percent of Utahns have post-secondary certificates or degrees. Goal 2 90 PERCENT of elementary students proficient in reading and math All students deserve a strong start. Dropping out begins in early grades if students don’t have basic skills to keep up with their peers. Where are we now? Currently, approximately 75–80 percent of Utah students meet this goal. Goal 3 STEM TOP TEN CENTER for technology jobs & businesses We can do it. Our large population of scientists and engineers, numerous technology jobs and university research spinoff all position the Wasatch Front to be a technology leader. Where are we now? Utah ranks 11th in the nation for technology jobs as a share of total employment, but 36th among states for technology jobs and businesses.
o n o m y i n t h e n at i o nThe Plan2013 Legislative Priorities n Pass a joint resolution in the Utah Legislature calling Higher education – Strategic investment = $20 million for 66 percent of Utah adults to have postsecondary • STEM and health profession investment certificates or degrees by 2020. • More online courses • More concurrent enrollment • n Make strategic investments toward measurable goals: Increased use of instructional technologies Public education – Strategic investment = $43.6 million • Computer adaptive testing Technical education – Strategic investment = $9.75 million • • Early intervention and programs for children at risk Triple number of Utahns with postsecondary • ACT testing for every high school student certificates by 2020 • Promising STEM priorities • Integrated arts and academics Revenue Options Prosperity 2020 business leaders deem the following mix of one-time and ongoing revenue options appropriate for serious gubernatorial and legislative discussion. Option FY2014 Revenue* Notes Tap new growth $321 million The first priority should be to tap a significant portion of new revenue from Utah’s near best-in-the country economy. Modernize $10–$35 million The passage of Constitutional Amendment A presents an ideal opportunity to severance tax modernize Utah’s severance tax system. The Legislature should evaluate and system improve the efficiency, equity and revenue sufficiency of the severance tax, including an examination of the base, rates, deductions and exemptions. Adjust motor $71–$100 million The buying power of the motor fuel tax has declined by 40 percent since 1997. and special fuel In addition, vehicles are more fuel-efficient and cause more wear and tear tax to keep pace per gallon. The state should consider an immediate per gallon increase that is with inflation indexed over time to keep pace with inflation. Tap mineral $25 million The Community Impact Fund has typically not been used to fund educational lease revenues facilities. We recommend devoting a significant portion of new mineral lease revenues to educational capital facility needs in both public and higher education. Enact quarterly $170 million Utah and Idaho are the only states with an individual income tax that income tax (one-time) allow taxpayers to remit taxes for non-wage, non-withheld income on an annual payments basis. Utah can use this one-time acceleration of funds to address important one- time needs. Utah could take a giant step by “gifting” this funding to education. Restore sales $150 million The policy to reduce the sales tax on food diminished the tax base, added tax on food complexity to the system and did a poor job of targeting Utahns in need. A better to full rate approach would be to restore the full rate and provide a more direct subsidy to low income Utahns. This could be done in a revenue neutral way for the first year. Remote sales $10 million Utah should continue to aggressively pursue sales tax revenue from remote sales (and grows over time) as a matter of fairness and revenue sufficiency. Federal lands unavailable Utah should work productively with federal partners to maximize school revenue from public lands.* Estimated The Prosperity 2020 Public Finance team is available to share additional revenue options.
Questions Q: What is Prosperity 2020? A: The largest business-led movement to enhance education in state history. Seventeen chambers of commerce and industry associations from throughout the state support Prosperity 2020 and more organizations sign on every year. Q: Who leads Prosperity 2020? A: Utah’s major businesses, business associations and many small businesses have organized the Business Executive Leadership Council and Founders Council. The Salt Lake Chamber serves as the backbone organization. Q: Why is Prosperity 2020 important? A: In a globally competitive, information-based economy, education is the path to enduring prosperity. The jobs of the 21st Century will flow to centers of knowledge and innovation. Prosperity 2020 seeks to enhance Utah’s competitive advantage with a well trained and educated workforce. Frequently Asked Q: Why focus on 66 percent? A: A seminal study conducted at Georgetown University projected that by 2018, 66 percent of the jobs in Utah will require post-secondary education. To fulfill this economic potential as a state we must increase degrees and certificates awarded each year by four percent. Success begins early. Utah business leaders desire to have 90 percent of third, sixth and eighth graders proficient in reading and math by 2020. Q: What are Utah businesses doing to help achieve the 66 percent goal? A: Business leaders launched the Prosperity 2020 Business Promise to deploy 20,200 volunteers in Utah classrooms and raise millions of dollars for scholarships.
Business Executive Leadership CouncilChair: Mark Bouchard, CBRE Kem Gardner, The Gardner CompanyVice Chair: Randy Shumway, Cicero Group David Golden, Wells Fargo Alan Hall, MarketStarKey advisors: Gordy Haycock, Grant Thornton Gary Carlston, public education Mary Ann Holladay, Holladay & Associates Paul Thompson, higher education Carol Hunter, Rocky Mountain Power Jana Scott, coordinator Clark Ivory, Ivory Homes Vicki Varela, communications Ron Jibson, Questar CorporationJeff Alexander, Alexander’s Print Advantage David Layton, Layton Construction CompanyScott Anderson, Zions Bank Richard Linder, Coherex MedicalLane Beattie, Salt Lake Chamber Tom Love, Love CommunicationsBruce Bingham, Hamilton Partners Brent Low, MediaOne of UtahMatt Bowman, Demand Generation Bob Marquardt, Management & Training CorporationJake Boyer, The Boyer Company Rich McKeown, Leavitt PartnersRoger Boyer, The Boyer Company Andrea Moss, American ExpressMona Burton, Holland & Hart Jeff Nelson, Nelson LaboratoriesKeith M. Buswell, Wadman Corporation Scott Parson, Staker Parson CompaniesLori Chillingworth, Zions Bank Ray Pickup, WCFWilford Clyde, Clyde Companies Patricia Richards, SelectHealthLew Cramer, World Trade Center Utah Kelly Sanders, Rio Tinto | Kennecott Utah CopperJeff Edwards, Economic Development Corporation of UtahRick Folkerson, Ken Garff Automotive GroupFounders CouncilCitizens for Educational Excellence Lehi Area Chamber of CommerceEconomic Development Corporation of Utah Moab Area Chamber of CommerceFriends of Utah Higher Education Murray Area Chamber of CommerceGovernor’s Office of Economic Development Ogden/Weber Chamber of CommerceJunior Achievement of Utah Park City ChamberUnited Way of Salt Lake Richfield Area ChamberUtah Foundation Salt Lake ChamberUtah Technology Council Sandy Area Chamber of CommerceWorld Trade Center Utah South Jordan Chamber of CommerceBrigham City Area Chamber of Commerce South Salt Lake Chamber of CommerceCedar City Area Chamber of Commerce St. George Area Chamber of CommerceChamberWest Utah Valley Chamber of CommerceEast Valley Chamber of Commerce Wayne County Business AssociationDavis Chamber of Commerce Prosperity2020.com