The Division of Financial Management reports Idaho’s general fund balance was $1.6 million less than predicted for the month of October.
“This month’s shortage was caused by the sales tax that came in $4.1 million below its
target. This shortfall was partially offset by the remaining revenue categories that all
came in above their predicted amounts.” – Division of Financial Management
Individual income tax collections exceeded expectations by $1 million. Corporate income tax collections, product taxes and miscellaneous revenue were also higher than predicted.
In downtown Los Angeles this fall, a man waited for a soup kitchen meal.
The U.S. Census Bureau released a new and expanded measure of domestic poverty today. Unlike the official poverty line, which is calculated based on food costs, the Census Bureau’s Supplemental Poverty Measure takes into account things like geographic differences in the cost of living and the assistance received through public benefits like food stamps.
We were curious to see whether today’s report would reveal any information about regional poverty, and there is an interesting nugget. Under the new calculation, the number of people living in poverty in the West increased by four percent. That’s compared to a gain of less than two percent in the Northeast, and slight reductions in the estimated number of people living in poverty in the Midwest and South.
Census Bureau officials chalk up the gain to high housing costs in the western region. The agency has not released state-by-state calculations as part of this report, but says state-level tables will be included next year.
This week I’ve been looking at some of Idaho’s business tax credits. I spoke with a non-partisan expert, the state Department of Commerce, a state tax expert and a business owner. I wanted to better understand the kind of tradeoffs the state is willing to make in order to develop new industries and expand existing companies in Idaho. The one question I’ve found most difficult to answer is, do those tradeoff’s pay off? It will be an ongoing question here at StateImpact. For now, here is what we do know.
Idaho currently has nine different business tax credits on the books (not including tax exemptions). The most popular, by far, is a three percent investment tax credit. The Division of Financial Management estimates businesses will collect more than $33 million in investment tax credits this year. It’s popular because any company can receive a three percent credit on qualifying equipment purchases. Qualified purchases include machinery, elevators, greenhouses, milking barns, research facilities, and just about everything in between. What doesn’t qualify? Apartment buildings and horses. (You can see the full list here)Continue Reading →
These are the five stories that got the most clicks, comments and shares this week. In case you missed one, we put them together in this handy list. Just click the blue link to read more!
Women workers, recording and moving ingots in 1943
The Government Accountability Office has released a new report on the persistent wage gap between working men and women. Specifically, the report considers workers who have less education and earn lower wages. Among its findings: “Even when less-educated women and men were in the same broad industry or occupation category, these women’s average hourly wage was lower than men’s.”
As for the wage gap on the whole, The New York Timessums it up:
“Adjusted for factors that could affect pay, like age, race, education, number of children in the household and part-time status, women earn 86 cents for every $1 earned by men. That’s up from 81 cents in 2000.”
According to the most recent (non-adjusted) numbers available from the Idaho Department of Labor, Idaho’s wage gap is considerable. From the fourth quarter of 2009 through the third quarter of 2010, working Idaho women earned not quite 62% of the amount earned by working Idaho men.
The department’s most recent analysis of the wage gap is available here.
Chobani’s parent company, Agro Farma, has released some details of its plans to build a new yogurt manufacturing facility in Twin Falls. The company plans to break ground on the facility in December. It will be located on 200 acres south of U.S. Highway 30.
The city of Twin Falls has agreed to more than $25 million in infrastructure improvements using urban renewal dollars, tax increment financing and Idaho Community Development Block Grants, according to Agro Farma. The Times-News has this explanation of the funding sources:
“Urban renewal districts get their money primarily by tax-increment financing, which allows the agencies to collect any increase in assessed property tax value within their boundaries after their formation and use them as incentives for developers. In this case, the site is in the city’s urban renewal district, and is turned the site area into a revenue allocation area that will generate the urban renewal dollars. The city’s also putting $6.75 million of tax dollars into wastewater pretreatment and sewer line improvements that are needed for wet industry projects to come to Twin Falls. The deal with the company also puts fee waivers in place for construction and wastewater system capacity.”
Idaho offers nine different tax credit programs for businesses. We’re highlighting the five most popular. The investment tax credit is used far more than any other credit-type incentive. In 2009, businesses collected more than $26 millionunder that credit alone, according to the Division of Financial Management.
Here’s a look at the other most frequently used business tax credits:
Research Activity Credit: Enacted in 2001, it’s a five percent credit for expenses related to research completed by a small business, university or federal government entity. The research must be done in Idaho to qualify.
Broadband Investment Credit: This is a three percent credit for purchases of qualified broadband equipment in Idaho. The credit is limited to no more than $750,000 per tax year, and no more than the taxpayer’s liability after all other credits in a single tax year. It can be sold to other taxpayers. It was enacted in 2001. Continue Reading →
The Greek yogurt maker Chobani says it will hire at least 400 people and invest $100 million in its new manufacturing plant in Twin Falls, Idaho.
The Times-Newsreports city officials and local and state economic development leaders brokered a deal behind closed doors to lure the New York-based company to the region. The newspaper reports the efforts started in May when Chobani’s parent company, Agro Farma, contacted the Southern Idaho Economic Development Organization. Continue Reading →
We here at StateImpact have been trying to get a sense of the potential local impact of the expansion of a federal mortgage refinancing program, announced last week. The program is intended to allow underwater borrowers to refinance, but only if they are up-to-date on their payments, and only if Fannie Mae or Freddie Mac acquired the loan before June 2009.
Nicolas Asfouri / Getty Images
Twenty-three percent of all mortgaged properties in Idaho were underwater at the end of June, according to the most recent negative equity report from financial data firm CoreLogic. Finding out what percentage of those homeowners are current on their payments and might be able to take advantage of the new program is more difficult. Until the lender sends a notice of default or begins the foreclosure process, that information is between the borrower and the lender. “I want to know this answer more than you do,” said Mark Lebowitz, Executive Officer of the Ada County Association of Realtors. Continue Reading →
Michael Mazerov is a Senior Fellow with the State Fiscal Project at The Center on Budget and Policy Priorities. I contacted the center to discuss the potential shortfalls of Idaho tax incentive programs after coming across this article.
The Center on Budget and Policy Priorities is a non-partisan research and policy institute which works at the federal and state levels on fiscal policy and public programs that affect low and moderate income families and individuals.
Q: How do state tax incentives work?
A: There’s a wide variety of incentives that state governments and local governments use to try and attract new businesses or encourage businesses that are already in the state to expand their investment or job creation. Basically, a tax that a state imposes on a business could theoretically have an incentive added to it. At the state level the most common kinds of incentives are reductions in the state corporate income tax based on increasing investment or increasing the number of employees a company has or increase the amount of R & D in the state. Some states have credits or reductions in the state corporate income tax if the company moves its headquarters to a state. But, they all basically involve cutting a tax in exchange for doing something the state thinks will benefit its economy.
Q: Does the state end up losing money?
A: Certainly, when the state first grants the credit, they’re definitely reducing the revenue from the tax that they’re allowing the break on. What they’re doing is hoping that in the long run what they’re doing will generate enough economic activity as a result of the credit that the economic activity will recoup some of the revenue lost that they initially lost by granting the credit. Continue Reading →
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