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Stable business environment is a priority for Legislature

Small business owners repeatedly tell me uncertainty about the future – and about public policy and regulatory changes – is slowing down Idaho’s recovery from the recession.

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 Meanwhile, there’s uncertainty over the future of the bill itself, as Idaho and other states seek to have it repealed.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.”

About Anne Wallace Allen

Anne Wallace Allen is the editor of the Idaho Business Review.

2 comments

  1. “Stable business environment” hmmmmm, let’s see. These imperial boobs have given Idaho the 9th highest income tax rates in America, while being 49th in per pupil public education spending along with being the only state in America requiring a supermajority vote (66.7%) to pass an ordinary school bond. That’s not to mention being the only US state west of the Mississippi without constitutional home-rule so the towns, cities, and counties can be more effective in economic development, let alone evade the imperial micromanagement of the statehouse. They’ve made Idaho a ‘high-tax, low-wage’ black hole.

    Gee, is it any wonder Idaho’s lost how many major corporate HQs & employers, even before the ‘Great Recession’ began? Get a clue people.

  2. Not much they can do? What that really means is nothing they want to do. How about starting with the Tax Commision mess???? Let’s collect we are owed (more personnel) and stop doing sweetheart deals. Last I heard that is in the neighborhood of $300M+ or more. Then let’s start on the ski resort, newspapers and others that have sweetheart tax exemptions that benefit small groups of people. This could lead to an overall tax rate reduction for the rest of us. It is time to actually do something. No more of not much we can do.