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Developing Idaho Part 2: Expanding the Toolbag

Tucker Slosburg

Those young upstart millennials, often classified as lazy because they choose quality of life over economic decision making, remind me of Idaho’s predicament regarding how we attract new businesses to the state. We want it all, but we’re not sure we want to work for it.

Think about how often we peddle to our non-Idaho friends and to outside businesses how wonderful the quality of life is here in Idaho. Unfortunately sometimes that’s just not enough. Sometimes we need more in the toolbag than just our quality of life.

So aside from a possible reduction of a corporate tax rate, what is in Idaho’s toolbag to create economic development?

The Boise Metro Chamber of Commerce is pushing for the state to allow local option sales tax in addition to the corporate tax reduction.

Idaho does allow for local option taxing, but in a limited scope. The state allows for the Greater Boise Auditorium District, local vehicle registration fee for Ada County, Nez Perce County, and a local option tax in small resort cities such as McCall, Sandpoint, and Sun Valley.

Additionally, Rep. Marv Hagedorn, R-Meridian, informed me that Idaho already permits local option taxing for property, implying no need for an additional sales tax. “Look, if Boise wants a transit system, do it with a property tax; the infrastructure already exists.”

That’s true. For one thing, local property tax goes to Valley Regional Transit to help fund the basic bus system. Building a more advanced transit system downtown, however, would require the city to support a bond by a two-thirds majority.

Passing a two-thirds majority for a bond is inherently more difficult than a three-fifths (Washington) or simple majority (Utah), especially because property tax is the most hated tax. That we even pass school bonds in this state is incredible.

In addition to the difficult nature of passing anything by a two-thirds majority, the anti-tax frenzy sweeping the country appears likely to keep things at a two-thirds majority. It is part of the reason that some state Legislatures would only allow local option taxing if it were passed by a constitutional amendment.

That type of narrow mindedness is shameful because instead of empowering communities with local control, the Legislature in essence prevents economic growth. Without local option taxing, Idaho cities have more difficulty cultivating attractive work environments or competing with surrounding states.

The Chamber has a leg to stand on here. The resort communities have benefited from their local option taxing and willingly renew them for extended periods of time. The local vehicle registration fee for Ada Country passed by sixty-eight percent. In short, the trial runs implemented in the state demonstrate not only success, but the efficiency of local communities in implementing their own best strategy for economic growth and sustainability.

Still, some raise concerns that local option sales tax would put an undue burden on the state by requiring more of the Tax Commission. That’s only sort of true. The businesses in the resort cities remit their local option taxes directly to the municipality, although they do have the option to contract with the state.

Even if the state did collect the sales tax and re-allocate the local portion back to the municipality, as it does with the Greater Boise Auditorium District, the local municipality pays for it, not the state. In other words, even if Boise enacted a local option tax no one else in the state would actually pay for the cost of reallocating the money back to Boise, unless of course they spent some money in Boise.

The reduction of the corporate tax rate might not pass, but the addition of local option taxing, a positive and proven tool, should be a no-brainer for the state and the Legislature. Those opposed to it simply on grounds of it being taxation fail to grasp the concept of local control. It’s that same local control that gives us the quality of life we try to sell to our friends.

The state can and ought to do more. Namely, it should allow cities to implement local option taxing. Additionally, the state must reevaluate its infrastructure. Our cost of labor may be low, but our workforce with four-year degrees is just as low. It’s time to prepare our state for manufacturing version 2.0, which I’ll discuss next week.

You can reach Tucker at tslosburg@gmail.com or follow him on twitter @Tucker849.

About Tucker Slosburg

2 comments

  1. In Idaho where the Imperial Legislature rules all with home-rule powers for none, and zero chance of alignment with the 3 power principles of the ‘new economy’ (speed, transparency, rapid accountability)…what you’re focusing on is a sideshow.

    The biggest game in town is redistricting…the only game, as far as the rural bozo elite is concerned, because they’re desperate to keep their edge in a state now 80%+ urban. To this end they’re forcing strong urban legislators like Idaho Falls’ Bart Davis to run in Bingham County, prompting the largest local redistricting meeting there to date. Hey, the rural vs. urban split in Idaho is finally out from under the covers.

    see: http://www.localnews8.com/news/29446420/detail.html

    Upshot: redistricting lines finally get drawn, circa 2017, by the 9th federal circuit court. Meanwhile, the economy continues to implode as nothing major can get done until then. The rural clique gets more time to destroy Idaho’s urban economy, and they’re doing a damn good job as it is.

    Tucker, do you really get paid to work there?

  2. Hear! Hear! Thank you for speaking forcefully about what we need to do to bring jobs to Idaho! I came to this great state nearly 20 years ago and was told at the that people would work for less because of the quality of life. We have kept with that belief over the past two decades. That may have been true to some degree then, but now with the decline in real estate, our 401k’s and the loss of jobs to other states, we are being forced to look outside of this great place to find professional and higher paying jobs. Your point about the rate of college graduates and workers with 4-year degrees is right on. See what leaving job creation to “lifestyle” has done? It has meant that many of the higher-paying professional jobs have left the state while we are left with more jobs that pay less and require less education. This has a negative downstream impact on our local businesses throughuot the state. It is a spiral that we have to stop!

    This IS a great place to live and work. I want desperately to stay here to help make it the best place it can be. But the BMCC and BVEP need some help here…the lifestyle alone isn’t what it used to be.