Transportation, economic develop zone proposal fails in House committee

Transportation, economic develop zone proposal fails in House committee

by
Idaho Freedom Foundation staff
March 14, 2013
Idaho Freedom Foundation staff
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March 14, 2013

The House Revenue and Taxation Committee Thursday rejected legislation that would have created “transportation and economic development zones” in the state as a collaborative effort between the Idaho Transportation Department (ITD) and the Idaho Department of Commerce (IDOC). The vote against House Bill 267 was 9 to 6.

“The concept is very creative,” Rep. Janet Trujillo, R-Idaho Falls, told IdahoReporter.com after the hearing. “But this plan isn’t going to advance right at this time.”

Under the proposed legislation, ITD and IDOC would, with the advice of economists, identify specific regions within the state that could likely benefit from the building of new roads. Presumably, under the plan, economic development would result in the regions where the new roads were built.

Once the new economic activity begins to produce new sales tax revenue, that tax revenue would be used to repay for the initial costs of the road rather than going into the state’s general fund.

“This is a good proposal, this is an innovative proposal,” said Dr. John Church, professor of economics at Boise State University. Testifying in favor of the bill, Church said that “this gives us another tool to fund our transportation and enables us to not be dependent on questionable future revenue streams from the federal government. It fits our destiny.”

Church also noted that he has frequently offered very cautious, conservative forecasts for economic growth in Idaho, and how his forecasts have often been exceeded.

“But sometimes your projections haven’t worked out as you anticipated and maybe things didn’t materialize quite in the manner that you had envisioned,” commented Rep. Neil Anderson, R-Blackfoot. “Would that be a correct assumption on my part?”

“Yes, every economist has a situation where something is probably a little more robust than what is anticipated,” Church replied. “Our experience over the last 20 years has been that growth has outpaced everyone’s expectations.”
“We support this idea as an innovative idea,” Brad Wills, founder of BuildIdaho.org, a Twin Falls-based construction advocacy group. “We believe growth needs to pay for itself.”

Under the failed plan, the construction of new roads would have been financed with the sale of bonds, an issue that Trujillo found to be problematic. “The bonding issue probably wasn’t well-timed,” she said. “The plan also lacked sufficient oversight from the Legislature. We need creative people in our state to take the initiative and bring ideas forward like this, but this wasn’t the model that we need right now.”

“I think this is a good idea, but it needs some work” Rep. Grant Burgoyne, D-Boise, told IdahoReporter.com. “There were several ideas raised about how this could be improved. I, for one, would like to see verification that the sales tax revenue generated in these new zones is actually new revenue generated from new economic activity, and not just revenue displaced from another region.”

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