The Potential Move of the Sate Penitentiary

There is a major debate happening in the Utah Legislature. In 2014 the legislature voted for moving the Utah State Penitentiary. Since the legislature voted to move the penitentiary, the public has involved their opinions starting protest groups. There are a few potential move sites that include Tooele County and next to the Salt Lake International Airport. From the beginning, legislatures have wanted to move the penitentiary to a site that will not have to deal with encroachment from all sides, so they have looked to find build sites near lakes, mountains, and uninhabitable land.

If the legislature successfully moves the state penitentiary, Rep. Brad Wilson believes that the old site for the penitentiary will become a booming business center with 680 acres to develop, creating about 40,000 jobs and bringing about 1.8 billion dollars into the future economy. If the legislature decides to keep the penitentiary in the same place the renovations will cost about 250 million dollars to properly update the current prison or 1 billion dollars to build a new one.

There are multiple economic benefits and costs. The cost, of course, of building the new 1 billion dollar structure will cause Utahn's to see a rise in their taxes immediately, and lasting for at least 20 years. There is also the cost to the current employees of the penitentiary, if the structure is moved the potential commute will increase the amount of gas the average employee uses. This will also cause more inversion with more commuting. One more cost is the value of the land surrounding the new site of the penitentiary, the value will decrease because, being located next to a prison is not a favorable attribute when building housing developments. The benefit of moving the penitentiary is that the structure will become safer to work at, because the current structure is not correctly built for the purpose it is being used for. The potential for a 1.8 billion dollar economic boost with high paying jobs is a major economic benefit for any business in the surrounding area. This will create a growing economy and an increase in cash flows in business surrounding the potential business site. By moving the site to a strategically well planned area there will be new businesses willing to build next to the prison which will include, most importantly, hotels and restaurants. People in  the state penitentiary have visitors and those visitors will need a place to stay while they travel.

I am curious to hear your opinion on this topic of moving or renovating the current prison and whether or not the taxes are worth it?





Dave Tufte said...

Dawn: 94/100 (misspelling in the title)

Well, the legislature has closed their session for they year, and they've allocated some money to move the prison (but not enough to do much this year).

As an economist, I think the primary issue should be: do they need a new prison? I don't see the building project itself as helping or hurting the state economy (no matter what the politicians and media say). That money will be spent in Utah by taxpayers if it isn't spent by the government they fund. The big thing for me is to make sure if they decide they do need the new prison that they get a good value for what they spend.

EC said...

This was an interesting topic to consider. I was right with Dawn while I was reading the original post post. I tried to compare the costs of the project to the benefits that would be derived to determine the best option. However, once I read Professor Tufte's response my thought process shifted pretty dramatically.

Regardless of whether the state decides to build a new prison, taxpayers will spend their disposable income. If the new penitentiary is not built, the tax burden will be less for taxpayers. This will enable them to put more back into the economy and we will see new jobs and economic growth. If the new penitentiary is built, investments would be made in the old site to develop the land. This would also likely lead to economic growth and job creation. This growth would be somewhat counteracted by the burden put on taxpayers. So, like Professor Tufte explained, the decision boils down to whether or not the new prison is really needed.

Joey said...

I agree with EC and Dr. Tufte. Economically there is probably not going to be a huge impact on the state. However for the communities involved there can be a huge economic impact. For example, if the prison were built in Uintah County where I live, this would help stabilize our economy by providing a large employer that is not tied to the oil and gas industry. It would also likely increase tourism because people will visit their family members.

However, on the other side of the coin it will impact the prisons’ current employee’s as their job will move and they will have to either find a new job or move with it. I would guess that many of them would not be interested in the new jobs that will be coming in with the redevelopment of the land.

In conclusion, I can think of multiple places in my county where the prison could be relocated. I would gladly welcome the stability, jobs, and tourism it would bring to my county.

Dave Tufte said...

EC: 50/50 (I think that's a play on words in the second sentence, so I let is slide.)
Joey: 47/50 (poor use of apostrophes in the second paragraph)

I hope I shifted EC's thoughts in a positive way :-s

I think a lot of discussion about projects like this amounts to "it's really positive if we don't count all the negatives".

That was my original point, but Joey has brought up a good corollary. For the state as a whole a new prison is probably a zero sum game. But at a more granular level, there will be winners and losers at the local level.