Bills woo firms with tax cuts

BOISE – A week after a House committee narrowly killed Gov. Dirk Kempthorne’s big corporate incentive tax package, a revised measure cleared the same panel by one vote Wednesday.

“This will allow us to compete for high-paying jobs in a highly competitive world,” said Brian Whitlock, the governor’s chief of staff.

Lawmakers last week said Kempthorne’s first bill was too narrowly focused on big businesses – Albertson’s Inc., in particular. Although opponents said the new measure won’t alleviate those fears, there were enough changes to prompt three Democrats to switch their votes.

“The changes are significant,” said Rep. George Sayler, D-Coeur d’Alene, who voted to send it to the full House this time. “We had some definite worries about the first bill.”

On a 10-9 vote, the House Revenue and Taxation Committee passed the measure that includes sales, income and property tax breaks for Fortune 500-type companies that bring 500 high-paying jobs and $50 million of investment in new facilities to Idaho.

The modified bill doesn’t allow corporations to include part-time employees in the tally of new jobs. And there is now a minimum salary of $15.50 per hour if a company chooses to average the pay to qualify, which means the pay for the new jobs must average $60,000 annually. The other choice is paying each employee $50,000 or better.

But legislators still expressed concerns about the unlimited property tax relief that HB 306 would provide to large companies. Officials at the Idaho State Tax Commission said they meant to include a $2 million annual cap on the property tax relief, but it was deleted through a technical glitch. A companion bill is expected to be introduced to fix the error.

“It’s a flawed bill,” said Hayden Lake GOP Rep. Jim Clark. “I will never vote for any bill that gives unlimited property tax relief to big corporations, while people in my district can’t get any relief.”

Still, Clark acknowledged the new measure is an improvement. “Most issues were fixed,” he said. “But the glaring problem is still property tax.”

Whitlock said there shouldn’t be concerns about the issue because a corporation would have to spend more than $100 million on infrastructure to reach the $2 million property-tax threshold. But Sayler and others said a cap needs to be included.

“Property tax is such a big concern up north,” Sayler said, “that we don’t need this as part of the problem.”

The governor’s office has been working on concessions with Democrats since the original bill died.

“We felt like businesses could bring in really high-paying jobs but also minimum-wage jobs,” said House Minority Leader Wendy Jaquet of Ketchum, one of four Democrats on the committee. “But with the 500 jobs this bill includes there will be people who value education. … And education provides opportunity.”

The original bill was derailed by one vote, despite pleas from House Speaker Bruce Newcomb, R-Burley, and an executive at Albertson’s. Both Newcomb and Gabe Gabriel, the Boise-based grocery chain’s executive vice president of supply chain and asset management, testified in favor of the bill this time as well.

Newcomb told the committee, “The fact is, do you want Idaho to compete or not to compete, to be a player or not be a player? … To choose not to compete is a huge mistake.”

Backers of the legislation, including Boise Mayor David Bieter, said it might be tied to big corporations like Albertson’s, but it would also have a statewide impact.

Steve Ahrens, president of the Idaho Association of Commerce and Industry, told the lawmakers that passing the bill “is about doing something that impacts all of the state. … These companies are a benefit to the state’s economy, not just Boise’s.”

Later in the meeting, the committee introduced a measure targeted to smaller companies. Spearheaded by Rep. Mike Moyle, R-Star, the legislation would give scaled-down incentives to companies that create at least 10 new jobs, with starting annual salaries of $40,000 plus benefits. The business would have to invest $50,000 into new facilities and equipment for each employee.