State Funded USTAR Harshly Criticized for Inflating Numbers by Lawmakers

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Curtis Haring contributed to this article.

Former Utah Lieutenant Governor Greg Bell, the newly-appointed chair of the Utah Science Technology and Research (USTAR) initiative, gave a presentation about the program to the Utah Legislature’s Business, Economic Development, and Labor Appropriations Subcommittee Tuesday morning and addressed concerns about the organization that have been brewing the past few months.

According to a legislative audit released in October, USTAR exaggerated the number of jobs it had created as well as the amount of money it had brought to the state. In a recently released audit of their activities, the state identified 15 points of improvement.

Bell stressed that USTAR is working to meet the recommendations made in the audit to improve the program, but Representative Jim Bird (Republican – West Jordan) was quick to the strike, asking Bell why USTAR has taken over the responsibilities of research and development from the state’s universities, veering away from its original mission to bolster the economy and produce several high-paying jobs, which is what the state had been seeking.

“Research and development is a means to an end,” Bell replied, but soon noted that “[Bird] has put [his] finger on the crux of things.”

“The 2005 promises made by USTAR… were determined to be appropriate by the parties that put that together… The Bureau of Economic Research put together this analysis that they updated in 2011,” said Scott Jensen with Tanner Company, an accounting firm regarded for their skill in this area. “[USTAR] should have generated 3,906 jobs, employment earnings of $78 million, and tax revenues of $6.8 million.” Due to lower funding from the state, Tanner adjusted these promises down to 3,300 jobs $67 million in employment revenues, and $6 million in tax revenue.  “Yes, job numbers were not quite where they should have been,” but Jensen urged committee members to consider the economic situation in the state.

State Senator Scott Jenkins (Republican – Plain City) sharply criticized the program. Jenkins said that a “culture of untruth and lies (has) come out of this group. You’ve presented us with ROI figures that were wrong. You’ve personally, not the current chair, but previous ones have personally lobbied me and fed me, literally, with food and other untruths that I feel somewhat offended about because it’s turned out that they’re not right. And it wasn’t one year or one report, it was a series of years and a series of reports and I believe to some extent that this has been a culture that has been generated to prop up USTAR and make it look good.” “If I was an investor right now today, I think I’d probably still pull my money out,” Jenkins said.

An exacerbated Senator Stuart Reid (Republican – Ogden) put it bluntly: “In my career, I have seen this movie before and I know how it ends, there is no question how it is going to end… I can tell you this right now: the legislature is not going to continue to fund this if [USTAR] can not demonstrate real progress – it’s just not going to happen.”

Reid continued by expressing frustration about the lack of a Return on Investment (ROI) report that was requested two years ago by Reid. “I was first told that ‘[USTAR doesn’t] have it, then they were going to get it, then we were told ‘well here it is’ …and it was a total and complete fabrication… I don’t think they know what an ROI is… and with all due respect to the Tanner team, I feel that you are trying to sell us again.”

During the presentation of the audit, Tanner praised the amount of grant and research money that has come into the state, however Reid was disappointed with this emphasis, asking if USTAR was bringing in new research money or simply taking the research money and grants the state’s universities would bring in anyway. Reid would go so far as to wonder if USTAR is simply a middleman and noting that it is simply unacceptable that USTAR was unwilling to spend the funds necessary to investigate that it is effective.

A Base Budget review of USTAR will be given on Thursday. With Republicans and Democrats on the committee harshly criticizing USTAR, the fate of state funding for the 30 year project is far from clear.

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