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Idaho’s corporate welfare outreach is harmful

Idaho’s corporate welfare outreach is harmful

Wayne Hoffman
October 27, 2017
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October 27, 2017

A couple of weeks ago, a long-time Idaho businessman told me that our state is making it too difficult for him to compete. This businessman, who I’ll call David, because he asked not to be identified, said his family business is struggling because Idaho is using tax subsidies to favor companies that compete with him. The subsidies are especially harmful in a tight labor market.

Because of the uneven playing field created through the state’s government incentive programs, businesses like David’s are forced to pour money they don’t have into payrolls with the hope of retaining talent they might lose anyway.

"Jobs are not being created, they are being hijacked by government-subsidized industries,” David wrote me.  “New companies, with no loyalty whatsoever to the local community, receive government subsidies to move to town. As a result, longtime family businesses are pushed out in favor of corporate behemoths. Jobs are not created, they are just taken from family businesses and given to faceless corporate entities who will leave at the drop of a hat if another community offers them a better deal.”

David goes on, “This government-sponsored gentrification is borderline fascist behavior in which government picks and chooses who to support. Inevitably it’s always the corporate entity with the lawyers who have perfected the art of greasing local politicians by selling them the idea of putting their picture on the front page of the paper cutting a yellow ribbon at the cost of the family businesses who built and invested in a community with their own hands.”

That’s why it’s disappointing that Gov. Butch Otter joined the horde of city and state governments that are kneeling at the altar of Jeff Bezos to play Amazon’s corporate welfare game. Numerous states are pulling out all the stops to get the attention of corporate interests, and Idaho did its part in a letter to Amazon of fewer than 300 words.  

Idaho won’t score the highly-prized second Amazon headquarters, and Otter’s letter makes it clear such is not his intent. The state doesn’t even meet Amazon’s written criteria, for Idaho doesn’t have the population nor transportation infrastructure, e.g., an international airport, demanded by the online giant.

Rather, Otter said he hopes that sometime down the road, Amazon will consider Idaho for another project, one more tailored to the state.

Otter’s letter says, “We...understand that Idaho’s many sterling qualities do not quite fit this particular site need. Having said that, Idaho is recognized for its favorable business climate, stable tax rates, reasonable regulations, low-cost renewable energy and affordable land.”

Otter’s letter is not near as clever as Little Rock, Arkansas’ charming break-up letter to Amazon, in which the city tells the Seattle-based firm via an ad in the Washington Post, “It’s not you, it’s us.”

There’s nothing wrong with trying to grab Amazon’s attention. Nothing wrong with sending a company a letter that nudges it to think of Idaho. Nothing wrong with a letter that plays to an audience beyond the corporate execs at Amazon and generates a cute little headline or two in the process.

The problem is, once again, Idaho business owners are left to wonder whether state government officials even care about what they’re doing. They’re left to wonder, in all the fawning over big business, if the state even recognizes what its policies are doing to them.

Most Idaho businesses are not Amazon. They’re small with an organic rate of growth that might never draw the attention of government officials. They’re the ones that have to compete against the companies that cash in on corporate welfare. They’re the ones that have to pay the highest income taxes in the intermountain region, stuck in a system in a state, according to the Washington, D.C.-based Tax Foundation, that has a tax business climate ranked at No. 20 in the nation.

Idaho’s aw-shucks letter to Amazon is harmless only because Amazon isn’t interested in what we have to offer. At least not today. It’s the letters that we’re sending, which are being answered, where companies are getting special awards and special advantages to compete against existing businesses, that we have to worry about. And that’s a real worry for people like David.

David wrote, “It would be one thing if it was a level playing field but how does one compete against a company that has the government in their pocket?”  

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