Idaho — again — hurts a homegrown business

Wayne Hoffman Articles

What the state of Idaho is doing to George and Mary Gersema’s company, their employees, is wrong. The state government is making it harder for the Gersemas to stay in business by offering yet another advantage to a competitor.

George and Mary started their business, Employers Resource, in Idaho 30 years ago. As the company has grown, the Gersemas have remained loyal to Idaho. They’ve raised their family here, have added jobs whenever they could, and eventually expanded operations to several states. The home base of operations remains in Idaho, and George and Mary still work at the company headquarters in Boise.

All this time, George and Mary have asked nothing of the state. They’ve never asked for special tax incentives. They’ve not asked for special favors. They’ve requested no taxpayer-funded grants. They have just wanted to pursue their passion and to seek economic prosperity for themselves, for their employees.

Last week, the state Department of Labor announced it was awarding a $1.2 million grant to Paylocity, a Chicago company that operates in the same human resources sector as Employers Resource. The grant comes from the taxes paid by Idaho businesses, large and small — including Employers Resource.

The Labor Department contends the grant to Paylocity is completely fair, because any company can apply for the funding.

“If Employers Resource has workforce training challenges, the Idaho Department of Labor is more than willing to work with Mr. Gersema on an application for Idaho Workforce Development Training Funds,” said Georgia Smith, a spokeswoman for the agency.

A lot of companies do have, as Smith put it, “workforce training challenges.” That’s because instead of allocating resources toward workforce training, companies are taxed to death and compelled to give their would-be workforce training dollars to the state, which in turn gives it to other companies.

There are more than 150,000 small businesses in Idaho, most of which do not get grant funding from the state, most of the companies have never asked for any kind of subsidy or special tax incentives. Nor should they.

Companies should be responsible for their own employer training. If Paylocity wants to hire employees, one would expect Paylocity to train its employees. That’s a cost of doing business, a cost that should not fall on the rest of the business world. And, George and Mary should not be compelled, by law, to supply the money needed to train their competitor’s employees.

This is the second time the state has offered a special incentive to Paylocity. Last year, the Idaho Department of Commerce announced it would give Paylocity a $6.5 million break on its income, sales and payroll taxes. Shortly thereafter, Paylocity’s job recruiters started to call employees at Employers Resource.

Since the initial Paylocity tax break, Employers Resource has filed a lawsuit against the state of Idaho. The case to be made: that the special tax deals are unconstitutional. The state of Idaho is repaying the lawsuit by piling on with another subsidy and a middle finger.

George and Mary deserve better. Through Employers Resource they have invested in Idaho. They have kept the company headquarters here. They have provided livelihoods for families here. In short, they have rightfully done all the things one would expect of an investor, a company owner, in this state. Instead, they are punished by politicians and public servants who award their competitors with financial competitive advantages. George, Mary and their employees deserve better.