A Public Private Partnership: How the Private Sector Impacts Public Policy
Synergy between the public and private sectors is critical for the state’s success, but it can be challenging to achieve. Navigating the political system takes time and energy, which are often in short supply for harried business owners. In addition, many startup founders or small business people lack the funds to hire a lobbyist or take time away from work to create relationships with lawmakers.
On July 24, a panel of experts from business and government gathered at the State Capitol to discuss strategies to build those connections and boost Idaho’s economy in the process. The Idaho Business Review’s Experts Forum is a sponsor-supported discussion. Participants on the panel include or have been selected by participating sponsors.
Grant Burgoyne – Idaho Senator
Stephen Cilley – CEO, Ataraxis
Jeff Feeler – President, CEO & Chairman, US Ecology, Inc.
John McCreedy – CEO, Amalgamated Sugar
Janice McGeachin – Lieutenant Governor
Mike Moyle – Idaho House Majority Leader
Chuck Winder – Idaho Senate Majority Leader
Gregory Hill – Director, Idaho Policy Institute; Associate Professor of Public Policy and Administration, Boise State University
Complying with regulations takes up a lot of time and money for small businesses.
Sen. Chuck Winder:
I practiced law for a little better than 30 years now and have been the managing partner of a small law firm. We’ve had three lawyers. At times we had four or five staff members, and due to efficiencies over the years, we were able to cut back on staff over the years through attrition and found that we were doing far more with a lot less.
I think that in my experience in business there are things that stand out that are particularly difficult for small businesses. Things like the personal property tax health insurance, large expenditures or potentially large expenditures, either in terms of something like in the personal property tax the amount of time it would take simply to go through and account for that, kind of like doing your income taxes. It takes time and time is money, and those things have an impact on things like health insurance where other regulatory environments are not as stable as businesses would like it to be. Things change from year to year. I have to say I’ve not been managing anything since we got the Idaho health insurance exchange, I don’t have that experience, but I do have the experience of how things used to be, and I certainly saw that for a small business, that’s a major commitment of time and money, an investment in a relationship and all that goes into the expense of providing those kinds of benefits to employees.
I’m an Idaho native. I’ve been very fortunate to be able to raise my family here and have my career all in the great state of Idaho. From the company’s perspective, US Ecology, it’s probably one of the larger companies not many people have heard about here locally. We’ve been in business actually for 67 years, founded in 1952. We’ve celebrated this year, our 35th year listed on the Nasdaq, so we’ve been public since 1984. Our whole business model is founded on government regulation, and it’s predominantly environment and fire regulation. The bottom line is we’re really dependent on both the federal and state level with regard to those regulations to make sure that we can accomplish our mission, which is really providing those comprehensive services and solutions to protect human health and the environment for all of us to live in a great state like this and a great nation.
From a public policy perspective, there is a strong interrelation between what we do as a company as well as what state and federal government does, and it probably is on the environmental side. But there is definitely an interrelationship between all business and public policy. Whether it’s taxes, whether it’s regulations overall, those are critically key to those businesses to adjust the cost structure, identify which state they want to domicile in.
Rep. Mike Moyle:
I’m very blessed to have been born in Idaho and to have lived here pretty much my whole life, farming and ranching, managing storage units, working in gravel pits. I’ve done some development; I’ve done all kinds of things, so I’m very blessed. But when I look at public policy and how it affects those businesses, everything that happens in this capital affects what happens to me in those businesses. An example, how many of you know that your income tax rates are the fourth highest west of the Mississippi?
What that does is it forces me to make decisions with employees and how I handle my business to help offset the cost of paying those taxes. So when we look at public policy, and one of the things that’s always bothered Mike Moyle, one the reasons I ran for the legislature, was taxes. It’s one of the things that keeps me here I think through the years we’ve made some good strides and helping to alleviate some of that pressure, and there’s a balancing act provides services at the same time, and how we get to that fine line I don’t know. But everything that the Legislature does somehow, somewhere affects my businesses, and when it affects those businesses, decisions have to be made.
Public policy has a direct impact on a lot of people’s lives, and I think that people don’t realize it. If you look at your property taxes, they’ve gone up substantially. That’s a public policy; this is being set by these local governments. Somehow we’ve got to get to the public to understand what’s going on. We need to be more open, but it’s an educational learning curve that’s hard to teach.
Lt. Gov. Janice McGeachin:
I am from Idaho Falls, where I’ve lived most of my life. My husband, Jimmy, and I have been married 30 years. we are partners in business. We are a small business in the automotive industry. We have a repair store in Idaho Falls, a transmission repair store. We have a parts distribution center in Idaho Falls and one in Boise. We have a machine shop in Idaho Falls, and our recent venture after I served in the Legislature for 10 years — and term limited myself because I don’t believe in politics being a career — I went back home and started the only Irish Pub in downtown Idaho Falls. The experience that I had starting up that business in this industry is what caused me to be interested in getting back involved in the process because I’m very concerned about what we do in our state and in our country to enable our our future generations and provide opportunities for them. And the experience that I have found being a small business owner and my experience serving in the political process as well is that we, and this is where public policy is relevant, we need to make sure that we do the best we can as a government to just stay out of the way of the entrepreneur and the small business owner because when the taxation and the regulatory environment becomes too excessive, it becomes very difficult for our kids to be successful and realize their American dreams.
We have two grown children that are helping us run our companies, and they both were highly educated at the University of Idaho in business, but our daughter said to me, and I’m a strong believer in mentoring and working with the young people and teaching them the ropes of business, she said, ‘Mom, how do you know all these things that you’re supposed to do in business?’ I said, well, it’s just experience. You have to get in there, and it’s difficult. It’s difficult for our young people to have the skills and the knowledge to be successful in business, and so that’s why the public policy is really, really important and I’m thankful that you all have an interest in this.
‘Play the long game’ to change burdensome regulations.
Our company was started in the late 1800s. We have 750 grower/owners who ultimately own and have the leadership responsibility for our company. They elect a 25 member board of directors; that 25 member board of directors in turn appoints nine working committees. So, in and of itself, it’s a bit like government and in some ways it actually acts a bit like government. We’re heavily involved at the national level. We have a lot of trade associations. We’re pretty well involved at the state level; we have some growers associations and some other organizations that are very involved, and we rely heavily on our lobbyists to keep us informed. But I think my perspective on business and public policy is that’s really all about the facts; it’s about advocacy and it’s about persistence. And that’s kind of how we run our company.
Our best example in terms of success is the work we did to try to reduce overall transportation costs in the state of Idaho. We’re about an $800,000,000 to $900,000,000 a year company, and we spend about $140,000,000 getting sugar beets to factories, three factories are in Nampa, Twin Falls and Paul, Idaho, and getting sugar out to customers. We make about 10 percent of the nation’s sugar, so about 2.3 billions of pounds a year. We’ve grown about 182,000 acres; it’s a fairly complex organization. But transportation costs and rising transportation costs are really one of the significant things, in addition subsidized foreign sugar, that threatens our foundation. We spent about 20 years developing facts to be able to convince public policy holders that a larger truck with a better braking system and larger footprint on highways is in fact safer and more effective and more efficient. So again, for us that was about the facts, about developing good facts, having the willingness to be an advocate on that issue and then staying persistent over the long haul because a lot of these issues really take a grindingly long difficult time to solve. So you got to have some staying power, you gotta play the long game, and that’s a lot how we view a company that’s been in existence since the late 1800s.
Overall, Idaho is a very business-friendly state.
I founded Ataraxis about 10 years ago, and the reason I founded it is because I was just looking for something to simplify my other businesses when it came to doing everything as an employer. And I was struggling to find a company like this, that would actually do all the work, because there’s a lot of work that has to be done. So Ataraxis is a company that will come in and partner with a business to do all the things that an employer needs to do and also help the employees navigate all those things as an employee whether it be what kind of benefits they get to what’s going on in their business. Most businesses don’t have a good HR presence, and so we’ve built our company around making sure that the companies we work with have a good HR presence, which encompasses everything.
For us, public policy is something that we deal with every day. Idaho in many ways is a very good state for an employer and in other ways is just cumbersome, and it’s just how the system works. There are states that make it much harder to do business, but Idaho is a very business-friendly state. We have clients in over half the states in the country, and we see the different regulations, and there’s a lot of things that can trip businesses up, and it’s hard for businesses to know what they’re supposed to do. There’s little nuances like sick leave in some states versus here. We don’t have sick leave in Idaho. I’m not saying we should, just saying we don’t.
Our goal is to make sure that we can simplify that for our clients so they can just focus on their business and they can grow.
A presence at the Capitol can make a big difference for a business.
Sen. Grant Burgoyne:
I have a lot of interaction with a few businesses, the businesses that make it a point to have a presence in this building on a daily basis through the legislative session and to make it a point to have contact with me and other legislators through what we call the interim — the period when we’re not actively meeting in session. There’s a lot of work that gets done through the interim; there are special committees, but beyond that there’s just work that needs to be done to get ready for the next session, whether it’s looking at legislation, whether it’s determining ‘Is this a public policy issue that needs to be addressed?’
Companies like Micron and Idaho power, the agricultural industry through the Farm Bureau, food producers, which are organizations that bring together lots of different agricultural interests in a basket and have a lobbyist here in the building — those are people you get to know. I would say that it is a people business and having people that you see all the time and you know that they represent a particular business or a particular group of businesses really can make a difference in terms of the impact that those businesses can have.
Then there are businesses that we know quite a bit about because they’re very important to Idaho’s economy, but we don’t necessarily see them one on one and then attach a name and a face to that business in this building, and certainly those folks have a presence in the community, have a presence in the state of Idaho that is well known and that has an impact. Then there are businesses — you know my business, when I was had a small law firm, there were probably a couple of decades where people didn’t know who we were in this building. And if we had come over to lobby on our own behalf, we would have a big mountain we needed to climb to meet people. What you find out really quickly, and I did find out in the eighties and early nineties when I wasn’t so connected, was that a legislator who gives you five minutes is giving you a lot of time. And it’s an awfully hard thing to do to make the introduction, state your problem, state your case and be persuasive in five minutes. In fact, before we remodeled this building, I remember being told by a lobbyist who was taking me around, ‘You’re gonna have 30 seconds with this person if we can catch them in the hallway.’ Be persistent and be consistent and if you think that your business could be affected by public policy, and it will be in some way, it might be worth making the investment to begin developing those relationships before the fire has started and you need help putting it out.
Lt. Gov. Janice McGeachin:
I just would like to add quickly that far too often in the harried life of a small business owner, reaching out to the politician is a very low priority, but I would encourage you to do that and to get more involved in politics. Talk to your legislator, your elected official. Let us know what obstacles you’re facing because sometimes we don’t know what we don’t know and we need your input.
Idaho lawmakers are more accessible than most.
Rep. Mike Moyle:
A lot of times businesses that aren’t involved (with lawmakers), it’s a reactionary thing. They got a problem they need to fix now, so they stop to fix something and they go away. That’s a problem. I think that they probably need to stay more involved in that conversation about but Idaho. You have the advantage. I was thinking here about all the different times that when the fall comes and I start combining corn, I can list about five different business owners that are gonna come climb in that combine with me and say here’s what’s going on, here is what I need help with. So the ability that is out there, the opportunities out there for businesses to interact with us, it needs to happen now, not later. Not everybody takes advantage of that. I mean, I think it’s awesome that I can walk down the street, see these guys and we talk about stuff we’ve done in the past. It can be all kinds of things that happen because of those relationships. Other states you don’t have that opportunity; you can’t just go climb in their combine. We’re blessed to have that. Idaho has a very accessible government, and it’s very easy to get involved and fix things. They take longer than you want sometimes, but it’s a lot easier.
The word ‘easy’ actually has a negative connotation to some. I would say it’s more what I like about Idaho is you have access. It is really that access and being able to access audience in most cases when you just have a simple message to get across. We operate in several states across the nation. I will say from an access level and from not having a specific agenda from the representative side, Idaho was one of the easier business environments to do business in. On the far extreme, you have California. There’s always some underlying agenda there, and you kind of have that same thing said about Michigan. Those are some of our more complicated states in which we operate.
Create a plan to stay on top of state regulations.
I guess in today’s business world, I wouldn’t really have a category of anything being easy, particularly public policy, so for us, we have to have a fairly structured approach to it. One, we have a lobbyist. We try to make sure we get a good lobbyist, and I think we have one. Two, we have a very active group of trade associations with our growers. I mean, we’re lucky in the sense that our growers want to be involved. They know they own the company; they know they’re responsible for its success, and they very much want to be involved. We host a legislative (event). Its informal; it’s social. We want to have some interaction with them, and we tell them a little bit about the company. We offer tours of our factories on a regular basis to legislators because I think we’ve found nothing is better than hands-on and eyes-on in a discussion about the actual threats and concerns that we have as a business. I make a presentation each legislative session that Roy (Eiguren) helps us arrange to a committee of the Legislature, and I think hopefully that’s helpful.
And then, finally, our growers associations and our company get together each year and we have a bit of a strategy session about how we’re going to approach the next. So we figure out what we did poorly in the last year, what we did well last year, where we can emphasize and do a little bit better, and then you said about trying to do a better job each year, so those are the formulas we use.
Yeah, we we take a similar approach. It’s really a three-pronged approach. We hire consultants in various states to stay abreast of issues. I can flag areas of attention or concern. On that, we also have a small in-house staff that helps monitor some of those issues and helps educate representatives and public officials throughout the states that we operate in. And then we sign up for a lot of other representatives especially here.
We are very active with our trade association, and the big thing that we do is that we’re looking at what different things are going on with government, the different laws are being passed, and so we have to stay up on those things. I know the Lieutenant Governor mentioned when she was starting a business, her daughter asked, ‘How do you know all this stuff?’ It’s almost impossible. It’s because there’s so many different things, and so we have to make sure that we’re staying up on issues, and we have to make sure we have great relationships with different government departments. I think that a lot of times, we see businesses seeing it as almost the enemy, and they’re not the enemy. They’re just trying to make sure that they’re doing their job as well. You can call them and almost always they’re more than willing to tell you what’s going on, what they see coming and can even tell you if they don’t even know yet.
Newspapers, IBR, they’re good at getting out the information, but it’s time-consuming when you look at it. Over half the people who are employed in Idaho are employed by small businesses, which means most of those businesses don’t have time to do any of this stuff, so it makes it very difficult for them to stay involved. When you talk about special interest groups, that’s what everybody’s doing is finding somebody they can connect with to either get the information to the legislators or get the information to their business. But you have to actively seek it out. There isn’t any single place to really get all the information you need.
Lawmakers need to make the effort to connect to small business owners who can’t afford lobbyists.
Lt. Gov. Janice McGeachin:
As the Greek Statesman Pericles said, ‘Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you.’ As a small business person, unlike some of the larger companies, we cannot afford to hire a lobbyist. But what I would say is take advantage of the things that are available to you as a small business owner — your local chambers of commerce and associations that can speak on your behalf. This in my role now as a lieutenant governor, this is why I strive to maintain good community communication with my constituency through social media platforms and weekly newsletters.
We recently in Idaho have have had this golden opportunity to reconsider all of the agency rules throughout the agencies. There’s a high interest in that, which is great, but the average citizen doesn’t really know how to wade through those volumes and pages of regulations to know if you want to submit a comment. There’s a number of counties that have petitioned for public hearings on our educational standards, some on the use of our public lands and some rules and the department of health and welfare, and so I feel like that’s a way that I can help as an elected official with the public being to be aware of what’s happening in government.
Sen. Chuck Winder:
I’ve been in business for 30 years and work for corporations in the area and then I do a lot of consulting work with a lot of different businesses. You have a chance to listen to them, get to figure out what their problems are, figure out how you can help them solve some of those problems, but I would say over the years, my go-to, it’s been the Chamber of Commerce. The way you learn about what’s going on is interact with those groups and it helps you have a better understanding of what they would like and maybe what the possibilities are you can get.
Sen. Grant Burgoyne:
When I first got elected, I thought chambers were businesses. I remember going to a chamber meeting and I ask how you guys make a payroll. I mean you guys hire people. Most of them were from the university; they were from the city; they were from the school district. They were all bureaucrats in some sense. When I think about businesses, no offense to my good friends in higher ed and everything else, but I think of the payroll, the guy that’s going through to figure out what he’s got to do and how to do it. So I realized at that time that the chamber wasn’t the answer. I had to be where the rubber meets the road, and so what I started doing, I started reaching out to these guys that had employees and asking, “What’s going on? What do I need to do to help you succeed?”
My attitude toward the businesses changed a lot when I became a legislator, because I don’t — no offense, my good friends are bureaucrats and, don’t let my wife know I said that, but I focus more on the guy that’s writing checks. I think that the Legislature in Idaho has done more that way if you look at what we’re doing regards personal property. We took care of the little guys; we still need to take care of the big guys. The whole thing revolves around communication, and sometimes we as legislators need to make the effort to go find those guys because they don’t know what they can do.
The guy that has five or 10 employees, these are guys that are out working their tail off; these are the guys that are making it happen. Most of the new jobs are created by existing businesses, not the guys coming into Idaho, and so these are the guys that are the ones we take care of.
Businesspeople bring many points of view to public policy, but generally, share an interest in the general business climate.
Sen. Chuck Winder:
My legal practice involved me for quite a long time, and my firm got employment law work for Hewlett Packard. Very large company. We also represented some very small businesses in matters, and so I had a professional exposure to a full range of businesses, and one of the things I did come to the Legislature knowing is there is no single business voice nor should there be. There are conflicting interests in the marketplace, and for every one side of the coin that somebody will present you on an issue, there’s another business that is interested in the other side of the coin. And some of these coins are thick enough that they’ve got four sides rather than just two. There’s one thing though that I don’t see is really paid enough attention to in the Idaho legislature.
There’s one thing that I think businesses do share an interest on, and that is the general business climate. And unfortunately the dynamic we’re in is that the individual businesses or groups of businesses or sectors are pretty good at gaining access and utilizing access and, I think very legitimately, to put forward their interests. but there could be more done by business to put forth the general interest. I think all businesses should have a good business environment. And there are people in public policy, people sitting right up here, who really care about that and want to do things about that, but sometimes when you work on that, you find there’s not as much traction.
I’ve always said I did some lobbying work before I came to the Legislature. I think lobbying is an honorable profession. I know it gets politicians pilloried by folks at times, but I also recognize that there are many people out there (who don’t have lobbyists) for a variety of reasons whether it’s cost, whether it’s political sophistication. And I feel a responsibility to reach out to those folks and figure out what it is that they’re thinking, especially if they’re my constituents. You know one of my symbolic constituents that I like to call on every once in awhile is a single mom with a couple of kids living in a one-bedroom apartment. She’s making 10 bucks an hour with a car that’s got over 200000 miles on it that she depends upon to get to and from work and get the kids to school. What’s the world like for her? I did the same thing when it comes to business. A lot of businesses make it relatively easy for me to understand what their issues are and what their positions are. There a lot of businesses out there that are not in a position to be able to do that and it falls to me; it’s my obligation to contact those folks and find out.
Broad experiences across the public and private sectors add perspective.
Lt. Gov. Janice McGeachin:
Well, through hard work and perseverance, I have attained this level of experience, which any of you can do. I count myself fortunate to have that kind of experience too because I think that we have to really put ourselves in these different positions so that we can really truly understand. I think it’s really important to provide this level of service to the people of Idaho, just simply based on personal experience. I thoroughly enjoyed the legislative experience and debating policy — that’s where a lot of excitement occurs. Now in the executive branch of government, it is more administrative, which is what I do and I’m good at it as a business administrator. It’s more day to day, and it’s just really getting involved in the level of state government and applying principles that were successful to not just myself but to all of us who are in business. It’s understanding that need to do the best that we can to provide an efficient and effective service to the people of Idaho.