Picking Winners and Losers Brings Unintended Consequences

  •  
  •  
  •  
  •  
  •  
  •  

In a recent article by the Idaho Statesman they wrote about how Sky West Airlines had received state tax incentives for moving a maintenance facility to Boise in an effort to bring more high paying jobs to our state. Unfortunately this deal backfired on our illustrious Department of Commerce when it was discovered that United Airlines was going to outsource their operations at Boise airport to Sky West. Fifty people who worked for United had a choice of taking positions in different parts of the country or accepting jobs with SkyWest for $9 per hour with little or no benefits. United was paying $20 per hour with full benefits to those employees who were asked to make a choice to leave or work for SkyWest.

So here is the story, SkyWest made a deal for tax incentives if it opened up a maintenance facility in Boise and hired 50 workers whose pay would average $52,000 per year. Now we are losing 50 jobs at United Airlines that paid $40,000 plus a year with benefits in exchange for 50 employees that will work for SkyWest for about $19,000 a year and virtually no benefits. Here is just another example of a deal gone bad because of our government picking winners and losers because of unintended circumstances.

Why does the government insert itself into the business of picking winners and losers with our tax money? If Mr. Sayer is the Director of Commerce, he should be directing commerce not investing our tax money in enterprises from outside our state. It doesn’t matter that he has a scoring matrix and opens it up to the public. He and his committee are sticking their nose in where it does not belong. If you want to create more jobs, then create a better atmosphere for businesses so they want to come here. If we need to offer incentives of 10, 15 or 30% in tax credits for 12 years, then our government is doing something wrong, and we as a state are failing in attracting new business with good paying jobs to Idaho.

The last deal our government wiz kids made was with Chobani Yogurt, and they laid off 41 employees after the state paid $150,000 of our tax dollars to train them. This is no more than another backroom deal where the politicians get the gold mine the tax payers get the shaft. When companies are looking for a place to locate, they will first look to the education system, good infrastructure and low taxes. Our education system is at the bottom of the barrel in the U.S., and our tax structure is not competitive with our surrounding states.

If we want to entice companies to move to Idaho, giving specific tax incentives to specific companies is not the way to go about it unless you are intending to ask them for campaign donations at election time. We all know that one hand washes the other in the political arena, and we have seen first-hand the corruption and bad management of our state contracts and tax deals in the past year with the Wi-Fi scandal, prison scandal and Schoolnet disaster costing Idaho taxpayers over $90 million and still counting.

Government needs to get out of the way by cutting regulations, lowering taxes and by improving our school system if we are ever going to be able to attract companies to our state that pay high salaries. Idaho is one of the few states who tax groceries and having just raised the gas tax by 7 cents a gallon this is no way to incentivize companies to set up shop in our state. We also have one of the highest state income tax rates of all of the states surrounding Idaho.

Maybe it’s time for government to start listening to the people instead of listening to themselves and the lobbyists that surround them on a daily basis. How about investing in the expansion of businesses already in Idaho, and how about giving us some transparency as to who gets the 33 million tax dollars a year in investment tax credits. It’s time to end the cronyism in our state and get back to a Free Enterprise system.

Join the Discussion