Summary: The State Legislature in coordination with the Governor’s Office of Economic Opportunity (GOEO), is taking geographic areas (land/water) and political power from cities and counties and giving it to new governing bodies often called Authorities, or Independent Entities. These new governing bodies have, both, elected and unelected board members who can vote to levy, use, and defer taxes to varying degrees.
Summary 2.0: The Utah Legislature is handing parts of Utah’s local government over to corporations who can tax, and in some cases, the legislature may not be able to undo it; i.e., TAXATION WITHOUT REPRESENTATION in perpetuity. It’s a government model called stakeholder capitalism which uses public-private partnerships and is advocated for by Klaus Schwab of the World Economic Forum, and China–and now Utah. This new model (really a new spin on an old model) is a hybrid that marries socialism and capitalism to allow selected groups to partner with government to control markets and tax the people. Sold as communitarianism–for the good of the whole–because large corporations have the financing to fix “blighted areas” or “bring in business.” (The financing draw isn’t too publicly compelling with special financing options available to these select corporations; e.g., PIDs, TIFs, TODs, IFDs, HTRZs, etc.– for another article.) This economic model has the exact same structure that feudalism did and looks like a modern-day feudalist system. The king (executive and legislative branch) picks the ladies and the lords (special corporations) to run the land and control the markets and also hands them power to tax the serfs (you). The DeSantis v. Disney lawsuit and the Salt Lake v. Inland Port lawsuit demonstrates that jurisdictional lines can get blurry once handed over.
Utah’s 2025 legislative session ended with the controversial suspension of the rules and was followed by the introduction of senate bill 337, known as the bill that proposed the creation of the Beehive Development Agency (BDA). SB337 entered the process during the last week of the session and quickly received attention from local municipalities and many interested in economic models. The Mayor of Riverton, Trent Staggs, wrote an op-ed referencing SB337 and the Utah Legislature incrementally taking away cities’ ability to regulate their own land use.
SB337 would add a funding and coordinating component to the Authority Districts. A bill this large and with this much power requires years of research, hearing all sides, projecting inevitable unforeseen consequences, and talking to all “stakeholders,” particularly the cities. As the 2025 session came to an end, those who understood the bill (and its arguably more detrimental substitute) were grateful when the bill took an unexpected turn and was pulled.
With the session over, Utahns have an opportunity to assess not only the Beehive Development Agency, but the future of Utah’s Authority Districts (Title 11), Independent Entities (Title 63E), and possibly Special Districts (Title 17) altogether. What does further consolidation, coordination, and funding of the Authority Districts–potentially with the Beehive Development Agency–mean for Utahns? (For the purpose of not having to list all the different districts and entities, they will be referred to as Authority Districts or Authorities here.The differences can be looked up in the Utah Code referenced above.)
Understanding what Utah is doing with Authority Districts and Independent Entities should be a warning for all other states. It is an outline of what not to do if you believe in a Constitutional Republic and freedom.
A Very Brief History
The historic use of districts in Utah, referred to as special districts; such as, water or sewer districts were budgeted and overseen by a local district which was usually a city council or county commission depending on the geographic region and function of the special district. This is the general concept of how districts have worked and how the public still believes they work; however, Authority Districts work very differently and have alternate powers and funding.
In recent years, the term Authority Districts, and the Big 5 Authorities (more now, such as the Sports Authority District): Military Installation Development Authority (MIDA) (Independent Entity), State Fairpark, Inland Port, Utah Lake Authority, and The Point have confused many on what districts are and how they relate to municipalities, the state, and corporations. The larger categories get more complicated–particularly when following the funding.
Local Control
Utah has long been known as a state that respects local control. Regardless of the state legislature’s power to govern from the Capitol, a handful of logical and ethical arguments call this power into question and have historically kept it at bay; namely, the principle of federalism and humility.
The irony of federalism didn’t escape Adam R. Brown in his book, Utah Politics and Government: American Democracy among a Unique Electorate, when, in his section on local governments, he quoted a Provo City Councilmember after local control issues stating,
“The very same legislature that thinks it’s terrible for the federal government to tell states how to run things passed two laws that now micromanage a city’s zoning and tells cities how to run things.”
If the principle of federalism is true and the power of the government is derived from The People, then limiting the state’s power over municipalities–where government is closest to The People–should be a foregone conclusion. Inherent in federalism and the principle of the separation of powers is that protections that occur horizontally, by branches checking each other, can also be true with power between the state and municipal governments checking power vertically. This principle of federalism applied between state and local municipalities and this complicated conflict is evident in the local control debate between two power models: Dillon Rule versus Home Rule. These arguments clearly bring to the forefront that regardless of what power “can be exercised,” extreme caution should be taken when deciding what power “should be exercised.”
The wisdom of humility should provide caution and a desire to decentralize power. Any legislator who has seen the process knows that despite their best efforts not every bill gets read, special interests have more power and control than is publicly known, and there are always a handful of legislators’ votes that time proves regretful. The wisdom of humility would dictate that the deference toward local control would divest the legislature of their responsibility to always know what’s best for cities. This approach of more local control would find them on the right side of history more often than not, and with fewer opportunities for regret. Despite the other arguments, being humble enough to decentralize and share the responsibility with the cities should make legislators convert to local control.
Utah’s New Economic Model?
The economic model that the Authorities and the proposed BDA is setting up is a merger between select corporations and government in order for the corporations to get access to special financing, land, water, taxes, infrastructure and markets. Historically, Utah’s economic model has been called shareholder capitalism where government and corporations are separate, and the market is open to anyone wanting to purchase shares to own publicly traded companies or to enter the market and compete. There have previously been distinct lines to ensure fairness, an open-market, and equal access. Some of these lines that have been lessened or removed altogether were regulations on public-private partnerships (aka P3s or PPPs). PPPs have empowered the Authorities while potentially lessening the public’s legal protections and the benefits inherent in free-markets. Under stakeholder capitalism, with a PPP, when conflicts occur, who is liable–the public, the private corporation, both, or neither? How will the public get quality service or products, and competitive prices?
The economic model proposed through the Authorities and the BDA, perfectly mirrors economic models where governments have merged with corporations. Stakeholder capitalism is a program that combines state permissions given to specific–government selected–corporations, or unelected board members, for the creation of state-sanctioned monopolies, and the implementation of social responsibilities. Fairness is sacrificed to what is deemed more efficient and coordinated. Stakeholder capitalism uses communitarianism to overcome the obstacle of fairness by echoing the book Animal Farm in the seventh of The Seven Commandments: “All animals are equal, but some are more equal than others.” Or, as Utah seems to have translated it, “All businesses have opportunities, but some have more opportunities than others… because the state has deemed that the community will benefit from giving that business more opportunities.”
Klaus Schwab, the founder of the World Economic Forum, was referenced and quoted in The Financial Post in a 2021 article entitled, The Murky Rise of Klaus Schwab’s Stakeholder Capitalism and the WEF’s Davos Corporate Plan by Terence Corcoran,
In the words of Klaus Schwab, the 82-year-old German economist who founded the WEF in 1973, the existing corporate enterprise model, the shareholder version that has dominated much of the world’s economic progress over the past century, needs to be replaced. “We need a change of mindset, moving from short-term to long-term thinking, moving from shareholder capitalism to stakeholder responsibility. Environmental, social and good governance have to be a measured part of corporate and governmental accountability.”
In his new book officially published next week — Stakeholder Capitalism: A Global Economy that Works for Progress, People and Planet — Schwab lists the four key power sectors that would sit at the corporate governance table: governments, civil society, corporations, and such international organizations as the United Nations. In that model, shareholders are likely to end up standing in line behind stakeholders — and stateholders.
As the Governor’s Office of Economic Opportunity, and its predecessor GOED, (and possibly, soon to be renamed something like the Governor’s Office of Economic Coordination) (GOEC), this office of over 100 employee and a 240 million dollar budget, facilitates this opportunity and the coordination of Utah’s Authority Districts and corporate mergers through public-private partnerships–among other things. As stakeholder capitalism has become more and more prevalent in bills filed every legislative session, one has to wonder if the Utah legislature knows that they are adopting a new economic model in stakeholder capitalism–and what also appears to be a new form of government–for the state. Is it their intention to align and implement the same economic philosophy as the World Economic Forum, the United Nations, civil society, and Davos? And with the Governor’s Office of Economic Opportunity, who is the economic opportunity for? If it were for everyone, would we need an office for it?
Constitutional Violations (Federal and State): There seems to be a number of state constitutional inquiries; if not, outright violations regarding the Authorities:
- Article I, Section 2: The equal protection and benefit is violated by picking winners and losers and creating monopolies.
- Article V, Section 1: Separation of powers is violated by the merging of the Executive Branch and the Legislative Branch into multiple committees and boards, but specifically the Governor’s Office of Economic Opportunity. This gives enormous legislative influence to the Executive Branch and each branch should jealously guard their authority and not collaborate it away.
- Article VI, Section 28: “The legislature shall not delegate to any special commission, private corporation or association, any power to make supervise or interfere with any municipal improvement, money, property, or effects, whether held in trust or otherwise to levy taxes, select a capitol site, or to perform any municipal functions.”
- Article VI, Section 29: This section prohibits the Legislature from creating private or special laws that hand out exclusive privileges. The Beehive Development Agency does exactly that by giving certain developers and businesses a special “project area” status, allowing them to bypass normal local processes and gain benefits unavailable to others.
- Article XI Protections for Local Self-Governance: Utah’s Constitution explicitly grants municipalities power over local matters like land use. By centralizing planning, taxing, and development authority in an unaccountable agency, the Beehive Development Agency tramples on these protections.
Crossroads: Utah’s Economic/Governmental Future
Utah appears to be at a crossroad: continue to embrace the innovative Authority Districts and give them funding and shelter; or, dissolve each Authority one-by-one and put guardrails back on PPPs. To complicate this crossroad, legislators have given no indication that they understand that they are even at a crossroad. The public dialogue regarding the Authority Districts has been minimal and few seem to understand what’s happening or where the Authorities’ powers stop.
Yearly, new bills that include the Authorities–driven by special interests lobbyists–appear to have no intention of slowing down. If Utah continues down this path, we may see more evidence like the Military Installation Development Authority (MIDA) now aiding in the building of the new Sundance hotel by deferring 35 million in taxes. Also, the Utah Legislature voted to give the Smith Entertainment Group (SEG) in conjunction with the Sports Authority another 300 million for road construction, even after the already previously appropriated 900 million in sales tax revenue.
Before choosing a different path, rolling back, dissolving, or putting guardrails on the Authorities, the legislature will have to be able to find the legislation and make a case against it as it seems to often get buried in omnibus bills or are added at the end of session when the rules have been suspended. In the cases where they are out in the open, they often pass through the process by persuading legislators with excuses like, “… But have you seen the sub? The sponsor is just cleaning up code in that bill. If I didn’t vote for it, they (the lobbyists) won’t donate to me. The bill is better now. The cities and towns’ lobbyist was neutral, so it can’t be that bad. They held my good bill in Rules until I would vote for it. They said they would kill my bill in committee if I didn’t vote for it, so I had to vote for it …”
The Utah Legislature stands at a crossroad and has some difficult decisions ahead of them regarding the Authorities, local control, and taxation without representation. Which economic and governmental path will they choose, one-bill-at-a-time, for Utahns? With a Republican majority controlling the state legislature–while riding a national conservative wave–will the Utah legislature vote no and defend taxpayers, property rights, local control, and open and fair markets as their Party tenets prescribe; or, will non-governmental organizations, lobbyists, political games, niceness before truth, and the regular political hubris prevail? Utah brags of being first and number one for a lot of things, many hope it returns to being number one in defending what made Utah so great in the first place. America is at a similar crossroads. Are we choosing globalism stakeholder capitalism or our Constitutional Republic form of government and freedom?
Excellent. Thank you.