We would like to revisit a subject that we think is important to the taxpayers of Idaho. The Department of Commerce Tax Reimbursement Incentive program became effective on July 1, 2014. The State offered a tax credit of up to 30% on income, payroll and sales taxes for up to 15 years. The requirements are:
In rural areas companies must create 20 new jobs and in urban areas 50 new jobs.
New jobs must be full-time, 30 hours or more with pay equal to or greater than the average county wage
Requires a meaningful community contribution (No definition of meaningful)
The Company must prove its stable and a significant economic impact to the community and Idaho
Company must prove that the incentive is a critical factor to its decision.
Who makes the decision as to whether a company qualifies. Well it’s not the legislature but an economic advisory council who is appointed by the Governor, in this case Butch Otter. The only duty of the Director of the Department of Commerce is to make sure the application is complete. The economic council makes the decision, and there is no oversight if you’re declined except from the members of the council.
How self-serving can our elected officials get? This is the “Silver Platter of Potential Corruption” by allowing the Governor to appoint this committee which has the sole ability to bestow tax benefits on companies that are friendly to the current administration and to potentially do harm to enemies of the administration by allowing unfair competition to enter the business arena with financial aid provided by the taxpayers of our state. In other words, the legislature has allowed for an un-level playing field even though it is in violation of our state constitution and violates Article II S1, Article III S 1 and Article VII S 5 by exercising non-delegable legislative power vested solely in the Idaho Senate and House of Representatives, with respect to the determination of Idaho’s tax policy and issuance of tax exemptions and/or credits to some Idaho taxpayers.
Employers Resource, a Boise based human resources firm, has filed a lawsuit challenging these tax benefits being handed out by an entity other than the Idaho legislature. The suit stems from the Department of Commerce awarding a tax benefit of $6.5 million of our tax dollars to Paylocity, a Chicago based company that will open up in Idaho in competition with Employers Resource. They will also receive another $1.2 million to train its workforce. Think of the advantage that our State has just given to an outside company instead of cutting taxes for all Idaho based small businesses.
It Started in Boise in 1985 and currently has over 100 employees. The state of Idaho is not only taking Employers Resource tax dollars to pay for Paylocity’s tax benefits, they will also have to compete with them for employees and customers. This is how the current administration takes care of a company that has been a building block of this state for over 30 years. Will your company be next?
What is interesting to note is that Employers is not a supporter of the current administration, and by that we mean they do not contribute to the current administrations campaign funds. In-fact they have instead been contributors and supporters of conservative legislators for years. We wonder if this tax benefit for Paylocity is retribution for not supporting Butch and the Gang of Cronies who have been running rough shod over this state for the past 10 years. Guess we will have to wait and see who these favored companies contribute funds to in the next election before being sure of our assumption that cronyism is involved. But by then the crony politicians will have the money and will be well on their way to being elected one more time.
We don’t believe it is fair or reasonable for the State to be picking winners and losers by allocating our tax dollars via beneficial tax deductions to bring new companies to Idaho especially competing companies. They say they have brought in 4,000 new jobs for a cost of $40 million, but they give us no transparency as to how these companies are performing.
According to the Idaho Department of Labor small businesses – those with fewer than 50 employees-make up 96.7% of all Idaho businesses. They employ 280,000 people or more than half of all workers in the state. You would think that our state legislators and Governor would be smart enough to figure out that if they cut the state income tax to 5% those small businesses would use that money to grow their businesses and add employees. There are a little over 45,000 businesses employing 0 to 19 people; imagine if they all added just one employee using the money they saved on taxes. Think about what that would mean for Idaho’s economy in terms of growth. Unfortunately our elected officials don’t think that way because it is not to their advantage. It is better if they get to decide on who gets the tax breaks so that those companies are beholden to them at election time.
We have too many crony politicians in Idaho worried about feathering their own nests like the legislators who get appointed by our Governor to head different bureaucracies in the state and increase their pensions 100 fold and more. It’s time to start evaluating our legislators and constitutional officers and holding them accountable. Sometimes I think we might be better off voting for their democratic opponents than giving them another term to screw things up. 2018 is just around the corner, and with a little luck we will get some daring citizens to step forward and fight those crony incumbent legislators for their seats. We will also be electing a new Governor in 2018, and I only hope that this time we elect an outsider with a resume of actual business experience and conservative values. We don’t believe that Brad Little or as we like to call him “Butch Lite” is the answer, and although Congressman Labrador has the conservatism as of late he does not have the necessary business background and is much more valuable to us in Congress than he would be here in Idaho as governor.
We need new leaders who have bold new ideas to improve economic conditions in our state. People who know how to grow economies through free enterprise, not through bigger government. We need to raise wages through better jobs that are not subsidized with our taxes, but by offering new companies opportunity with lower taxes and less regulations to start and grow their businesses. We need an education system that is run locally without state bureaucrats dictating what we will teach and what we will not. We want an education system that puts students and teachers first, not supervisory bumpkins who fall in line when the state shouts jump they say how high. The winds of change are in the air and the era of crony rulers is coming to an end, but only you have the power to end it with your votes. Maybe we will get lucky and someone like Russ Fulcher will take another shot running for Governor. Only time will tell my friends, but remember “We Get the Government We Deserve”.
