Managers cite uncertainty as the reason they haven’t hired to replace staff they need to expand their business operations. Uncertainty is one of the reasons the capital markets haven’t returned to the level of lending we saw before the recession.
Idaho lawmakers know this all too well. At a legislative forum put on by the Associated Press Jan 6 before the start of the session, legislative leaders repeatedly cited a predictable climate for business as one of their top priorities.
“When I talk to businesses, what they’re clamoring for is stability,” said Dean Cameron, the co-chairman of the budget-writing committee JFAC. “Once you see that stability, I think you’ll see business start to hire new employees… and to see the economy start to grow in earnest.”
For some business owners, health reform looms very large in the fretting over uncertainty. Even the leaders of the state’s largest insurance companies can’t predict how the bill is going to affect employers. Meanwhile, there’s uncertainty over the future of the bill itself, as Idaho and other states seek to have it repealed. Other business owners welcome the federal reform. They say whatever it brings, it’s sure to be an improvement on the insurance system they – and the nation – are paying for now.
I asked Rep. Brent Hill, R-Rexburg, the leader of the Idaho Senate and a 10-year veteran of the Idaho Legislature, what state policy makers can do to alleviate some of the uncertainty.
Not much, he said.
“Until the feds provide more stability in areas of health care reform, monetary policy, deficit spending, regulation of financial institutions, etc., many business owners are reluctant to expand their operations and hire more employees,” said Hill, a 10-year veteran of the Idaho Legislature. “However, state lawmakers can provide assistance to these businesses locally by streamlining state regulations, maintaining a steady, fair tax system, and not reacting in a knee-jerk fashion like the federal government has.”
Another key area of uncertainty is new taxes. Idaho legislative leaders have made it clear they won’t look highly on proposals for new taxes – though a proposed tax increase on tobacco products, billed as a “user fee” that would help defray the costs of smoking to Medicaid, is being sponsored by Rep. Dennis Lake, chairman of the House Revenue and Taxation Committee.
Lake said he hasn’t even heard any other revenue-enhancing proposals in the run-up to the session.
But business owners are right to be cautious about what is coming. With a $300 million predicted budget shortfall this year, Idaho’s policymakers might have no choice when it comes to looking for new revenue streams.
“We’re probably facing the worst year coming up that I’ve ever seen in my experience,” Hill said. “It’s not going to be a fun place to be in the capitol this year.”