The Idaho Legislature can help businesses gain traction in the sluggish economy, Idaho Association of Commerce & Industry President Alex LaBeau told the Legislature’s Economic Outlook & Revenue Assessment Committee Jan. 7.
“What you do matters in business policy,” he said. “We need to have certainty, and let the marketplace duke it out.”
Legislators should look at reducing the state’s high income tax rates and at eliminating the right of counties to collect personal property tax on goods like desks and computers, LaBeau said.
“Here is where the status quo is not acceptable. We have to continue to work in this area,” he said. High quality of life exists in Idaho and elsewhere, so Idaho can no longer rely on it to attract new businesses and encourage business expansion, he said.
The Idaho Association of Commerce & Industry plans to propose the Legislature eliminate the personal property tax, LaBeau said in an interview. Lawmakers three years ago granted personal property tax relief tied to revenue triggers, which never kicked because of the recession.
The association this year also plans to propose changes to how Idaho handles water degradation issues and unemployment benefits, in part to reduce harm from federal mandates or penalties, and make these systems more predictable and manageable for businesses, he said.
The Idaho Legislature, despite a revenue shortage, should continue to invest in economic development and education so the state is prepared to seize new opportunities as the economy improves, LaBeau told the committee. The Idaho Department of Commerce and local economic development agencies have had success, but other states have been more aggressive in courting businesses, he said. Idaho’s manufacturing base needs to diversify, he said.
Members of the Idaho Association of Commerce & Industry see some positive signs in the economy, he said.
“Confidence is still a bit shaky out there, but it has improved amongst our membership,” LaBeau said. Credit has loosened slightly, and some businesses are starting to add capacity and buy competitors, he said.
Risks including looming high fuel prices and higher taxes in struggling countries where some IACI members do business, he said.