Borrowing from the movie classic, “Cool Hand Luke” – what we’ve got here is failure to communicate.
The Boise Metro Chamber of Commerce seeks more funding for roads and bridges, education and higher education building projects, while pushing for Medicaid expansion. At the same time, the business advocates are asking lawmakers to say “yes” to tax reimbursement incentives, lowering corporate tax rates, eliminating the personal property tax and preserving the sales tax exemptions.
Those are confusing signals, says Rep. John Rusche of Nez Perce, the House Democratic floor leader. “You can’t have better roads, better schools with more tax incentives and decreased revenue to support those.”
Rusche says the mentality of trying to do more with less money has led to low wages and some of the state’s best and brightest fleeing the state for better jobs.
Rep. Vito Barbieri, R-Dalton Gardens, who chairs the House Business Committee, is skeptical about the Chamber’s agenda, but for different reasons. He sees the wisdom of business tax incentives and reductions, but thinks the Chamber wants to spend too much.
“This is the same laundry list they have had for a long time,” says Barbieri. “We have to recognize we cannot play like we’re a big state when we are a small state. They are thinking in the same outmoded way of ‘we need this, so tax more.’”
Meanwhile, Barbieri says his constituents are telling him the exact opposite – to hold down taxes and spending even if it means cutting education.
Bill Connors, president and CEO of the Boise Metro Chamber and chairman of the Idaho Chamber Alliance – which consists of all of the larger chambers in the state and many of the smaller ones -- has heard such criticisms before. But he defends the Chamber’s agenda, which reflects the positions of other chambers in Idaho.
Providing incentives and lowering corporate tax rates are proven economic winners, Connors said. The tax reimbursement incentive legislation, for instance, has cost the state about $11 million, while producing $75 million in revenue.
“That’s $75 million in new money,” Connors said. “If we make the state attractive to business, then business creates revenue and revenue creates a resource for education, roads and everything else.”
The cut of the corporate tax rate is hardly draconian – it’s a tenth of a percent decrease of one of the nation’s highest corporate tax rates. “Considering that the economy is heating up, it might not be noticeable,” Connors said.
The Chamber CEO is at odds with Barbieri’s brand of “creativity,” especially if it means cutting an already modest education budget.
“Don’t get us wrong,” Connors said. “We are a conservative business organization that loves the fact that we have a very predictable regulatory environment and a good one. We generally have a pro-business state and a state that balances its books. We appreciate the governor and the Legislature for dong that – and that’s not always an easy thing to do.”
The Chamber has at least some level of support from Gov. C.L. “Butch” Otter, who spoke of several of the concepts in his State of the State address. The governor talked about support for education and transportation improvements, while giving a nod to business incentives and reducing the state’s corporate tax rate. The governor also touched on local option taxes – an oldie, but goodie on the Chamber’s wish list. Otter pointed out that the College of Western Idaho came about as a result of voter approval.
House Speaker Scott Bedke has all but dismissed the possibility of local options getting through the Legislature, saying, “Don’t hold your breath on that.”
Connors doesn’t see local options as a foregone conclusion if city and county leaders rally behind the issue. It’s still a longshot at best in the House Revenue and Taxation Committee, but the committee’s makeup has changed in recent years.
“To me, it’s a conservative Republican idea,” Connors said. “It’s putting government closest to the people, and giving people the most say.”
It’s letting the people decide if they want to pay for transportation, libraries or baseball stadiums.
There is no failure of communication by the Chamber on that issue … only a failure by the Legislature to listen.