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WEDNESDAY, FEB. 8, 2012, 5:14 P.M.

Idaho biz, ag groups talk economic incentives with tax committees

Business and agricultural groups told the House and Senate tax committees, in a rare joint hearing today, that restoring university research and development budgets, adding incentives for job creation and eliminating Idaho's $130 million personal property tax would all help boost Idaho's economy. Idaho Department of Commerce Director Jeff Sayer told the lawmakers that one thing he's learned in his four months on the job is that Idaho should develop attractive incentives that go well beyond the state's traditional attributes of low energy costs, a flexible, affordable workforce and quality of life. Click below for a full report from AP reporter John Miller.

Idaho biz, ag groups promote economic incentives
By JOHN MILLER, Associated Press


BOISE, Idaho (AP) — Business and agricultural groups told House and Senate tax committees that restoring university research and development budgets, adding incentives for job creation and eliminating Idaho's $130 million personal property tax would all help boost Idaho's economy.

The House Revenue and Taxation Committee and the Senate Local Government and Taxation committees met Wednesday in a rare joint session, to gather input as they consider Gov. C.L. "Butch" Otter's proposal to dedicate $45 million to tax cuts.

House Assistant Majority Leader Scott Bedke told presenters to imagine they were in the tax policy store, hunting for the best product to stimulate the economy.

"I would like to drill down, from each of the industries, from your perspective, how is that going to move the needle on economic development in the state," said Bedke, R-Oakley. "We're on the cusp of setting tax policy here."

Clark Krause, of Jobs for Idaho, a group representing economic development groups across the state, suggested establishing a fund to reward companies that export over 50 percent of their goods and services beyond Idaho's borders. According to his plan, they would be eligible for thousands of dollars' worth of incentives for creating jobs, with the money paid out over four years to ensure that they follow through on their commitments.

"Our idea is to please consider ... a job expansion fund, so that when a value-added job company is looking to grow jobs within the state of Idaho, we have the tools to make sure that they make a decision to keep those jobs here and grow those jobs here," Krause said.

Meanwhile, Food Producers of Idaho lobbyist Brent Olmstead said his group's No. 1 priority would be restoring research and development spending.

That's happening, at least in a limited way, with Gov. C.L. "Butch" Otter promoting his IGEM program that will direct $5 million toward universities to partner with private industry on new ideas that could eventually become commercially viable products.

Alex LaBeau, the top lobbyist at the Idaho Association of Commerce and Industry, told the panel that the Legislature's failure to eliminate the $130 million personal property tax on business equipment has been a drag on economic development. Dumping the tax would allow businesses to direct newly available cash to job creation, he said.

"This is a bad tax," LaBeau said. "It's the one that all the businesses talked to us about and said, 'This is a nightmare. It has to go away.' "

And recently appointed Department of Commerce Director Jeff Sayer told the panel that one thing he's learned in his four months on the job is that Idaho should develop attractive incentives that go well beyond the state's traditional attributes of low energy costs, a flexible, affordable workforce and quality of life.

Sayer called it "window dressing" — the kind of knockout package meant to catch the fickle eye of head hunters hired by companies to negotiate the best relocation package possible. Without that, companies will consistently overlook Idaho's deeper qualities because the incentives in the storefront aren't alluring enough, he said.

"When I walked into this position, I fully expected when it came to recruiting new companies we'd be dealing with the principals of those organizations, we'd be sitting down with the CFOs, we'd be sitting down with the decision-makers, and saying 'These are the benefits of Idaho,' " Sayer said. "That's not the way the game is being played. Companies are literally hiring site selectors, and those site selectors are being compensated on the incentive package that they can bring to the table.

"The biggest issue," he said, "is getting them here."


Copyright 2012 The Associated Press.




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Betsy Z. Russell
Betsy Russell covers Idaho news from the state capitol in Boise and writes the Eye on Boise blog.

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