Members of the House Revenue & Taxation Committee grilled Gov. Butch Otter’s communications director and senior special assistant Mark Warbis for half an hour this morning, before agreeing, on a divided voice vote, to introduce Otter’s bill to revise and expand the HOME, or Hire One More Employee, tax credit. Otter’s proposing a series of changes, including adding an additional $1,000 credit if the new employee is a veteran; removing a requirement for employer-provided health insurance for the new job to qualify; changing the amounts and wage levels; and removing ties to the employer’s rating with the state Department of Labor for use of the unemployment insurance program.
“We found after the 2011 bill passed, we hoped that it would be a better economic development tool than it ended up being,” Warbis told the committee. He said the state doesn’t really know yet how well it worked, because the first tax returns from employers that would show that won’t come in until this spring. “But we heard loud and clear from employers … that it was too onerous, too complicated … for them to use. … So it became less of an effective tool. So we went back to the drawing board.”
The new version of the tax credit would be retroactive to Jan. 1 of this year, and would last for five years.
Rep. Carolyn Meline, D-Pocatello, spoke against removing the requirement for employer-provided health insurance. “I’d prefer companies to take care of their employees,” she said. Warbis said the national health care reform law has made that issue “moot” by requiring most people to purchase health insurance.
Rep. Lenore Barrett, R-Challis, said, “We’ve been through this before. We don’t have any records yet if it worked the first time, so let’s make it easier. … Why can’t we leave this to the market, which we have in the past, which is the basis for capitalism?” Warbis responded, “We do not want to interfere with the marketplace, we want to help the marketplace along any way we can on the margins. … It’s not something that’s going to cause an employer to go swim upstream in a market that’s not working for their widget.”
Rep. Robert Anderst, R-Nampa, said, “It seems like if we wait a few months we’re going to have hard data or at least some data that we can predicate a decision on. … To do so now is a forecast and a guess as I’m reading this, am I correct?” Warbis responded, “Virtually everything in economics is a forecast and a guess. I would tell you that if we didn’t do this, then the existing law would stay in place. We’ve been told quite clearly by employers that it’s not something that they like, not something that is workable for them, not something that in many cases … is worth their trouble.”
Today’s vote to introduce the bill clears the way for a full hearing on the measure in the Rev & Tax Committee.