Governor hopes to spur economy

BOISE – Gov. Dirk Kempthorne will start the legislative session Monday by asking lawmakers to approve tax breaks aimed at boosting economic and business development.

He said the state should “build upon those incentives” already allowed by state law, and he said his proposals will do that.

“I think it’s going to further stimulate the economy,” he said.

But Kempthorne would not give any details about his plan, instead saying he would discuss the matter more in next week’s State of the State address. He would not say whether the state’s 72 sales tax exemptions will be mentioned as part of his plan, though a group he convened to review the matter recommended in 2003 that the exemptions be “re-evaluated.”

House and Senate leaders reviewed the exemptions a couple of years ago but were shut down by the same business and industry lobbies that have maintained the various breaks for decades.

Some lawmakers especially wanted to review the exemption on services, such as haircuts and attorneys fees, because the state’s economy is much more reliant on services now than it was when the sales tax was implemented in 1965.

Kempthorne said he expects the costs of his tax incentives for businesses would pay for themselves with the increased business investments they’ll stimulate.

In the past, Kempthorne has supported several incentives, including corporate income tax breaks for companies that invest in broadband technology and in rural Idaho counties, and credits for companies that create new jobs. He vetoed tax breaks for alternative energy last year, saying the state could not afford the costs.

The governor’s $2 billion state spending plan will also be presented to lawmakers on Monday, along with a major transportation initiative that would likely use a federally sanctioned borrowing program to speed road construction statewide.