BOISE – Idaho Gov. Butch Otter signed a tax incentive bill for new hires Wednesday that’s winning bipartisan praise as a bright spot in addressing the state’s biggest issue this year, job creation.
“I don’t think, as long as you’ve got one person in the state of Idaho out of work, we’re ever doing enough,” said Otter, who noted that 74,000 Idahoans are now unemployed. “We’re doing what we can.”
In this year’s Boise State University public policy survey, Idahoans listed jobs as the most important issue facing the state.
The bill, HB 297a, was crafted by Otter’s office after an earlier version pushed by state chambers of commerce passed the House but died in a Senate committee.
“I give a lot of credit to the governor’s office … putting together a new bill that could pass in the Senate,” said Rep. Grant Burgoyne, D-Boise, who joined Otter at Wednesday’s bill-signing ceremony along with a group of GOP lawmakers. “There was some real leadership there; there was some real work there by the governor and his team that paid off in a good bill.”
In the recently concluded session, lawmakers killed the state’s major tax incentive for alternative energy development in a spat over neighbors’ objections to wind turbines, and cut hundreds of public- and private-sector jobs through budget cuts in education and Medicaid.
“The Hire One Act is a notable exception,” Burgoyne said.
Under the bill, for-profit employers who make new hires on or after Friday would be eligible for a tax credit if the jobs include health benefits and pay at least $12 an hour in counties where unemployment is above 10 percent or $15 an hour in counties where it’s below 10 percent. The hires would have to be on board for at least nine months before they’d trigger the credit.
The amount of the credit would vary from 2 percent to 6 percent of the new worker’s gross wages, based on the employer’s rating in the state unemployment insurance program. That’s to ensure that employers that laid off workers during the recession and are now hiring them back aren’t rewarded as much as those that kept their workers on and are expanding.
“We know it’s going to cost the state a little over $7.5 million, but we think the result of that is going to be about a $25 million income to the state” as those newly employed workers pay taxes, Otter said.
The tax credit expires Jan. 1, 2014.
Sen. John McGee, R-Caldwell, said when he and Otter campaigned together last fall “one thing that kept coming up over and over was jobs, and this legislation directly takes on that issue and improves the situation. I think it’s going to be very successful.”
Otter said Idaho could have done more to promote job creation. But, he said, “What we were looking for was something that was either revenue-positive or revenue-neutral, and this is what we came up with.”