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Panel expands corporate welfare program for counties

Panel expands corporate welfare program for counties

Dustin Hurst
March 23, 2015
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March 23, 2015

Big businesses looking at investing in Idaho could soon be eligible for even more tax breaks after a House committee supported a new plan backers say will bring new investment to the state.

The plan, backed by the Idaho Department of Commerce, expands an existing program that allows county commissioners to waive certain property taxes on new investments for up to five years.

Only Republican Reps. Heather Scott of Blanchard and Ron Nate of Rexburg objected to the proposal. It now moves to the House floor.

State law previously allowed commissioners to waive taxes for up to five years for companies investing at least $3 million in a certain project. The new bill drops that level to $500,000.

The law also limits the exemption to manufacturing projects, but the agency’s plan opens the door to any non-retail investment.

The legislation doesn’t necessarily require that companies bring a certain number of new jobs to a county. Upon questioning, Megan Ronk, a top official at the state agency, couldn’t explain why the legislation and the law don’t mandate new jobs.

“I don’t know that I have a good answer for that,” Ronk said.

House Majority Leader Mike Moyle, R-Star, said the plan gives county commissioners the discretion to examine that and decide what’s appropriate.

“We do leave that up to the county commissioners because they’re the ones that make the determination,” Moyle said.

The plan won support of the Idaho Association of Counties, whose lobbyist, Tony Poinelli, said at least a dozen counties have used the program in the past.

“It is a good piece of legislation,” Poinelli said. “It has worked.”

A consortium of urban renewal districts, small government agencies tasked with developing local economies through even more taxpayer giveaways, opposed the bill. They said the bill doesn’t require commissioners to notify local renewal agencies before awarding an exemption.

The plan requires commissioners notify all affected taxing districts before handing out a tax break.

Nate opposed the bill because he said it could lead to established companies, whose executives run campaigns and make political donations, to pressure commissioners to keep out competitors.

He also said there’s at least a partial tax shift to other taxpayers because any new investments use county services but don’t pay for them.

“I do have some concerns with the program as a whole,” Nate said.

Scott objected on legal grounds, citing a piece of the Idaho Constitution that requires taxes be uniform.

“This doesn't seem uniform to me,” Scott said.

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