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House committee puts the brakes on plan for ag, ranching tax credits

House committee puts the brakes on plan for ag, ranching tax credits

Idaho Freedom Foundation staff
February 5, 2013
[post_thumbnail] Rep. Mike Moyle asks questions about a new ag tax credit in House Revenue and Tax Committee.

A bill seeking to institute a new tax credit for Idaho ranchers and farmers was held in the House Revenue and Tax Committee Tuesday on a 9 to 6 vote, effectively killing it for this session.

“This is a job creation bill,” Sen. Roy Lacey, D-Pocatello, explained. “It’s intended to attract large employers to our state, but it will work for the smallest of employers as well.”

Lacey, along with Rep. Donna Pence, D-Gooding, spoke before the committee about House Bill 51, legislation that seeks to provide tax credits to farmers and ranchers who create new processing facilities within the state.

“Why didn’t you specify a minimum number of jobs or a minimum dollar investment that a company needs to put forth in order to take advantage of this tax credit?” asked Rep. Mike Moyle, R-Star. “In the past we’ve required companies to make minimum investments, but we’ve also made tax incentives available to all companies and industries.”

“We want this to work for small companies as well as larger ones,” Lacey responded.

The bill states that it seeks to "increase both jobs and the amount of commodities utilized in Idaho," yet the fact that it would only apply to farmers and ranchers became a point of contention among the committee members.

“Last year this bill passed the House 62-6,” Rep. Mat Erpelding, D-Boise, said. “I would also note that the model for this legislation comes from the state of Oklahoma. Idaho’s agriculture is expected to double in the next 20 years, and it only makes sense to do this.”

Yet Moyle saw things differently. “I’m an ag guy, and I should be jumping up and down supporting this, but I don’t,” he said. “If we’re going to do tax credits, we should make tax credits available to everybody, and we should not be singling out one industry, and picking winners and losers in the economy.”

“As I’ve studied economic development, I have found that tax credits are usually a small piece of the economic puzzle for startup businesses, sometimes as low as half a percent,” Rep. Stephen Hartgen, R-Twin Falls, told Lacey during questioning. “Who, really, do you think is going to take advantage of this?”

“We see this as just one more tool that businesses can use to help them expand,” Lacey replied.

“I see that the Idaho Freedom Foundation has asked some interesting questions about this bill,” noted Rep. Grant Burgoyne, D-Boise. “IFF asks if the state can accurately determine what the proper number of jobs for Idaho is. I don’t know how many jobs this bill might create, but I can tell you that it will be more than we have now. I don’t think anybody on this committee would say that we have enough or too many jobs in Idaho right now.”

“I prefer to stay with the law of supply and demand, and let the market determine these things,” said Rep. Lenore Hardy Barrett, R-Challis.

Note: IdahoReporter.com is published by the Idaho Freedom Foundation.

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