New tax incentives stir instant response
BOISE – Gov. Dirk Kempthorne signed into law major corporate tax incentives Wednesday, and the state’s commerce chief said he’s already been in touch with three out-of-state companies interested in the deal.
“I have had personal contacts with three executives from major companies, and there’s more to come,” said state Commerce and Labor Director Roger Madsen. “We’ll do our best.”
The legislation, HB 306, provides an array of sales, income and property tax breaks to any company that creates 500 new high-paying jobs in Idaho that stick around for at least five years and invests $50 million into new facilities in the state.
“It was widely viewed as an aggressive effort by the state to try to keep Albertson’s here and to encourage them to grow in Idaho,” Kempthorne acknowledged as he signed the bill. “As I’ve said all along, I hope that’s the case.”
The measure was nicknamed the “Albertson’s bill” because it was seen as a way to entice the Boise-based grocery chain to consolidate its operations here, rather than somewhere else.
But, the governor said, “I wanted an incentive package that had much broader application and that can be used by any Fortune 500 company.”
He told Madsen, “I want to encourage you to get packed, because you’re going to be out recruiting. You now have a tremendous tool.”
House Tax Chairwoman Dolores Crow, R-Nampa, said it doesn’t bother her in the least to pass legislation aimed at companies like Albertson’s and Micron Technology, which got its own, tailor-made tax breaks in two separate bills passed by the Legislature this year.
“These are home-grown companies – we love you, we want you to stay,” Crow said. “We realize that just being nice people isn’t enough.”
Opponents of the bills contended Idaho would be better off investing in improving its education system than in business tax breaks, but the legislation passed overwhelmingly in both houses.
House Speaker Bruce Newcomb said, “I think it’s important that we provide a good business environment, which this helps do, so that companies come here and companies stay here and we can provide a good future for our children.”
Kempthorne proposed the tax-incentive package, and then, at the insistence of lawmakers, also backed a companion measure offering similar but scaled-down tax breaks to smaller employers who create as few as 10 new jobs paying at least $40,000 each plus benefits and invest $50,000 per new employee into new Idaho facilities.
Rep. Mike Moyle, R-Star, who pushed for the small-employer bill, said, “We did some good things not only for big business but for small business too.”
Idaho State Tax Commissioner Dewey Hammond said the new incentives “fit perfectly in Idaho’s corporate tax structure.”
“Please remember, the cash benefits going out won’t start until the jobs are created here and are permanent here,” Hammond said. “That’s the centerpiece. … These are the jobs we’ve dreamt about all along.”
Kempthorne said, “What is the cost? There is no cost, unless you utilize it.”
The Kempthorne administration estimates that both bills would result in a net gain to the state, because the additional tax revenues from the new jobs and facilities would more than offset the tax breaks.