A job seeker clutches a training program catalog at a job fair in Illinois this month.
As this article and others have explained in recent days, many states are struggling to repay the federal government for loans it made to help cover unemployment benefits as joblessness surged during the recession.
“More than 30 states have had to borrow billions from a federal fund to cover unemployment benefits for their jobless residents in recent years.” – CNN Money
More than $1 billion in interest is due to the federal government by tomorrow. The Idaho Department of Labor says the state’s share of those interest payments — $5.5 million — has already been sent. “We paid it on Monday,” said spokesman Bob Fick.
The state also paid off the more than $202 million balance of the loan, money borrowed in 2009 and 2010 when Idaho’s Unemployment Insurance Trust Fund went broke. It financed both payments by issuing bonds this summer, a move that won approval from the Idaho Legislature earlier this year.
Idaho’s repayment means that employers will not face higher federal unemployment taxes come January. By contrast, some states are turning to employers and asking them to pony up.
Spokesman Fick says the Idaho Department of Labor has not had to borrow money from the U.S. Department of Labor since July of 2010. The state’s Unemployment Insurance Trust Fund currently holds $139 million. That amount should rise under the measure signed by Gov. Otter in March.
Valley County's Tamarack Resort, viewed from above.
According to this article in The Idaho Statesman today, a potential buyer of Tamarack Resort is backtracking on an announced $40 million offer. The would-be buyer, Matthew Hutcheson of GV Capital Holdings Inc., reportedly said in a letter to state officials that the local economy needs jobs and infrastructure first, and a resort second. Here’s the key excerpt.
“We cannot in good faith pursue the acquisition of the resort believing, knowing, that without an increase in 1,500 well-paying jobs first, the resort is doomed to continued failure and destruction of the local economy,” Hutcheson wrote to Gov. Butch Otter and Idaho Attorney General Lawrence Wasden in a Sept. 19 letter obtained by the Idaho Statesman. “We must bring in jobs that are sustainable and independent of Tamarack first.” – The Idaho Statesman
Job creation in rural Valley County, Idaho, where Tamarack is located, is no easy thing. In August, the county’s unemployment rate was 16.6 percent. Most of the jobs the county does have are in government or tourism and leisure.
Asked what he thinks about the prospects for creating 1,500 jobs in a county where the workforce now totals just over 4,400, Department of Labor Regional Economist Andrew Townsend didn’t mince words. “I’d love to see 1,500 jobs in Valley County,” he said. “I think everyone would. It’s just how to get from point A to point C on that one. What’s the step B? I don’t think I know.”
Entrepreneur Hutcheson has long been regarded as an unlikely buyer for Tamarack. And this is, of course, only the latest development in the resort’s troubled history.
Job seekers met with recruiters at a California job fair this summer.
This series of maps from the New York Times illustrates Idaho’s hard reality, with respect to the jobless rate. While most states have seen unemployment drop since the end of the recession, Idaho is among the handful that have watched unemployment rise. In June of 2009, Idaho’s rate stood at 7.6 percent. Last month, it was 9.2 percent.
As the Times reports, economists wonder whether the slow recovery in parts of the West and South constitutes a lasting shift in the nation’s economic landscape.
“Unemployment remains high across much of the country — the national rate is 9.1 percent — but the regions have recovered at different speeds.
Now, with the concentration of the highest unemployment rates in the South and the West, some economists wonder if it is an anomaly of the uneven recovery or a harbinger of things to come.” – The New York Times
Mike Ferguson, Idaho’s former chief economist, says it’s painful to acknowledge the reality of the state’s predicament. “Idaho is characterized by having turned down earlier and deeper,” he said, “and it’s turning around more slowly than other states.”
Ferguson doesn’t see signs of a rally ahead. He looks at the national numbers, which show job growth has stalled, and says Idaho’s situation is even more dire. “In Idaho,” he said, “it looks like it’s slipping.”
Each week, Tom Birch spends hours meeting with homeowners who know they’re falling behind. Many of them are beset with worry. At no charge, Birch talks to them about their finances. He gives them handouts with titles like, “What to Do When You Default on Your Mortgage.”
Birch worked in the mortgage business for 35 years, but he’s now the Director of Homeownership Counseling for Neighborhood Housing Services, Inc., a nonprofit community development organization in Boise. Foreclosure prevention counseling is one of his chief responsibilities. It sounds like an important service, but we here at StateImpact wondered: when a family is deep in the hole and in danger of losing a home, how much can someone like Birch do? As it turns out, quite a lot.
Molly Messick
Neighborhood Housing Services, Inc. offers free foreclosure prevention counseling to Idaho homeowners.
Q: First, what does foreclosure prevention counseling consist of?
A: It’s awareness of where the borrower really is. Borrowers that I see, about 99 percent of them, have lost a job. They had high credit scores when they got their loans, but they are in a new situation, because of job loss or a reduction in wages or hours, and they don’t know what to do. They’ve tried to make their payments. They wish they could make their payments. And when they come to see us, they basically are paralyzed.
Q: When someone sits down across from you and says, “This is the predicament I’m in, and I have never dealt with this before,” what’s the first thing you say?
A: You are not alone. You’re just like people that I talk to every day. There are some options, and the first step is to know where you’re at. Continue Reading →
The Idaho Nonprofit Center is holding its annual conference in Boise this week. University of Idaho economist Steve Peterson gave one of the headline presentations this morning, unveiling the preliminary results of his Idaho Nonprofit Sector Economic Impact report.
According to Peterson’s study (funded, in part, by the Idaho Nonprofit Center) nonprofits are a big deal to the state economy. Here are some key findings, so far: Continue Reading →
If you spent an evening walking around Boise, asking people about the economy, the housing market, and how they’re feeling about all of it, what would you hear? Well, we did that, and here’s your answer. It’s a bit unsettling.Â
A sign advertises a foreclosed home in Nampa, Idaho’s Blackhawk Subdivision.
The Idaho housing market’s boom and bust is sure to be a long-term focus here at StateImpact. RealtyTrac’s August numbers, out last week, show that Idaho has the fifth highest rate of foreclosure in the nation. The Boise area has seen the worst of it, with foreclosures concentrated in Ada and Canyon Counties. There, filings are a daily occurrence.
Idaho’s housing boom was concentrated around its two main metropolitan areas, Boise and Coeur d’Alene. John Starr of the global real estate company Colliers International had a front-row seat as capital poured into the local market in the years preceding the bust. When he thinks of the early 2000s, he remembers watching land prices rise with demand, and house lots shrink. What the area wound up with, he says, were more and more subdivisions, packed tight with houses. Now, many of those homes stand vacant.
In Starr’s analysis, the decision by big banks and out-of-state developers that Boise was a good place to put money has a lot to do with Micron Technology. When Micron took off in the early 1990s, other employers were drawn to the state. Idaho boomed. Census data show that the state’s population grew by more than 28 percent from 1990 to 2000, and by more than 20 percent from 2000 to 2010. To housing developers looking for places to invest, Idaho was a gem. But Starr says they should have looked closer. Continue Reading →
Idaho’s timber industry is another example of a sector that’s been a main-stay of the area economy since the state lines were drawn. Like mining, it’s seen big declines over the last couple of
Tom Brakefield / Getty Images
Stacked wood in a lumber yard at an Idaho sawmill
decades. Idaho’s wood products industry is driven by lumber demand, which is a function of the housing market. The state Division of Financial Management is predicting incremental increases in both sectors of the economy starting this year. The DFM’s 2011 forecast said housing starts will increase 30 percent this year, 55 percent in 2012, 16.4 percent in 2013 and 13 percent in 2014. As those starts pickup, so too will the demand for lumber.
“This anticipated strong demand will act as a countervailing force to supply factors that have exerted relentless downward pressures on logging and wood products employment.” – Derek Santos, Economist, Division of Financial Management
Jay O’Laughlin is the Director of the Idaho Forest Wildlife and Range Policy Analysis Group at the University of Idaho. He said the key question is how long will it take for the state to work through its housing “overbuild.” “It will be more than a year,” said O’Laughlin, “less than five years, I’m confident of that.” Continue Reading →
There are 759,000 people in Idaho's labor force, at least 70,000 are out of work
The Idaho Department of Labor today reported a drop in the state’s unemployment rate, but the number of people still out of work isn’t declining as quickly as labor officials would like. August’s seasonally adjusted unemployment rate is down two-tenths of a percent to 9.2. That’s the lowest Idaho’s rate has been in the last 15 months. Still, Department of Labor spokesman Bob Fick said 70,000 people were still out of work around the state.
“The number of workers with jobs declined for the third straight month, dropping below 689,000 for the first time since March. Nearly 2,400 workers dropped out of the labor force in August, the second largest one-month drop on record. The largest was 2,600 in July.” – Bob Fick, Idaho Department of Labor
Fick said employers expanded payrolls by just 1,800, matching the gain from July to August in 2010 but far below the pre-recession average of 3,300 new jobs.
Director of the Business Research and Economic Development Center at Boise State University, Brian Greber, believes too much weight is put on monthly unemployment figures. He said those statistics aren’t always a good indicator of what’s happening in the job market. Instead, he thinks the focus should be on the actual number of jobs being added to the economy. Continue Reading →
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