Henderson’s focus: More jobs
POST FALLS — Idaho has lost sight of economic development, according to State Rep. Frank Henderson. “I personally think we need to be more aggressive to get our word out,” he said as he pointed to an economic development brochure he and a couple of other state legislators published last year. “Nobody else was doing it, so we got together and did it ourselves,” he said. “We have all these incentives available to attract jobs to our area but we act like we are keeping them secret.” Henderson isn’t alone in those sentiments. Alex LeBeau, president of Idaho
Association of Commerce and Industry, said during a recent conference in Coeur d’Alene that his organization plans to get more aggressive in economic development issues in the upcoming legislative session. “We are competing with other states that are offering huge incentive packages and Idaho is not in the game,” he said. LeBeau said Idaho is currently on the short list to attract 400 high-tech jobs paying $75,000 a year, but the incentive package that Idaho is offering pales in comparison to what the other three finalists are offering. He said Utah and Arizona are offering $35 million incentive packages, and Oklahoma is offering $50 million. Idaho is offering $5 million. “Other states have found a way to attract companies with incentive rebate programs that are paid out over 10 years,” LeBeau said, adding that Idaho should look for a way to do that as well. “Why shouldn’t we get in the game?” But money isn’t everything to these companies, Henderson said. Different companies are seeking different things and the biggest thing most employers are looking for is stability and predictability. “The governor says it best right here,” he said, pointing back to his brochure and reading a quote from Idaho Gov. Butch Otter: “In Idaho, we balance our budget without raising taxes. We know the best way to help business is to provide tax and regulatory certainty, then simply get out of the way,” the governor wrote in the forward message of the brochure. “Sure you can throw big incentives out there, but the key thing is right there,” Henderson said. “As long as we can provide certainty, we are in the running.” He provided evidence of that. As chairman of the House Business Committee, Henderson was able to pass House Bill 417 in the 2012 legislative session to exempt aircraft parts from sales tax rolls. That helped retain Western Aircraft of Boise, which was looking to expand its business at the time. The move actually helped them become far more competitive, Henderson said. They sent him a report of the progress they made over the course of a year after the tax was exempted. “Aircraft parts are exempt in competing states, and by doing that here, we enabled them to compete,” he said. “We helped make them more successful.” He said a piece of legislation he helped pass this year creates an Opportunity Fund under the direction of the Idaho Department of Commerce. It was Governor Otter’s idea, Henderson said. The $3 million fund is a performance-based fund that can be used by cities and counties to provide infrastructure and other necessities to attract or retain jobs in their community. That fund becomes active on July 1, and Megan Ronk, spokesperson for the Department of Commerce, said there is already interest in the program. “Certainly we have a lot of projects in the works that could be good candidates for the Opportunity Fund when it comes available,” she said, adding they are still writing the rules for the grant. Henderson said he’s working with two companies that may be interested in the grant program as well. “The key to success with this program will be for the cities and counties to educate themselves,” he said. Henderson said that legislation is the first step in a more comprehensive and aggressive strategy he has to restore a more vibrant economic development climate in Idaho. He said the old way of simply promoting the state’s amenities isn’t going to work in today’s economy. “We can’t just leave it to the promoters anymore,” he said. “We need to get the policy makers involved in economic development.” Henderson is already developing legislation for the 2014 legislative session to exempt building materials for employers who locate or expand in Idaho. He used the expansion of Ground Force Worldwide as an example. Ground Force spent $7 million on new facilities in Post Falls recently to expand its production capability. Henderson said half of those costs were in building materials that Ground Force paid sales tax on. He estimated that cost was around $185,000. His new legislation would provide a sales tax rebate for employers who create 10 jobs or more. That’s similar to what LeBeau is looking for, he added. Henderson would like to see that money rebated out of the general fund, once the employer is able to show the expansion resulted in increased jobs. However, he has been a legislator long enough to know that he will face opposition. “If they have to take the money out of the general fund, it’s going to be tough to pass,” he said. “But if that doesn’t pass I will be ready with a Plan B.” There may be a way to create an account for these employers to take credits against other state fees such as workers compensation or unemployment fees that they would ordinarily pay. Either way, he said, he’s hopeful that IACI’s new focus on economic development and the governor’s interest in that area will prompt more of his fellow legislators to get involved in the effort. “Right now, I am the only guy in the legislature that has brought up anything about economic development,” he said.
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