The Idaho Association of Commerce & Industry is a statewide public policy organization that works on behalf of Idaho businesses. IACI is the result of a merger between the Idaho Chamber of Commerce and the Associated Industries of Idaho. It’s one of the most powerful pro-business groups in the state. It has about 300 members, including companies in agribusiness, technology, construction, health care and real estate. Alex LaBeau is IACI’s president. StateImpact spoke with LaBeau at the beginning in January to learn more about the groups’ legislative priorities.
Q: What are your priorities for the 2012 legislative session?
A: Our priorities are three-fold. One, we want to deal with the state healthcare exchange issues, that we’re still trying to work through the nuances of the federal law, and some of the changes that keep coming at us from the feds resulting from different interpretations. We’ll also be dealing with education reforms again. But those education reforms will be largely looking at the recommendations that came out of the interim committees that worked on the issue last year. So, we’ll be looking for fully funding those, as well as working through some adjustments that need to be made. Finally, we’ll be looking at some issues surrounding the personal property tax, and how you define it, what it is, and hopefully setting the state on a pathway to eliminate the personal property tax eventually but that will be dependent on the reaction we get from the Senate committee.
Q: IACI supports a state-run health insurance exchange, correct?
A: Yes we do.
Q: What has been your involvement in working with lawmakers and the state on creating a state-run health insurance exchange?
A: We’ve been working on it with the Department of Insurance. We will be engaged in that process from start to finish. Ultimately, we have to make the decision that is in the best interest of our small businesses and individuals in this state. That’s what exchange was constructed for. We also have to look at many of the practicalities with having a state exchange in the first place and what it means to the state of Idaho, what it means to the businesses to have that, and structurally how it will be formed. We believe the state is better off having a state-run exchange rather than a federally-run exchange. Then you get into the details, and creating an exchange, whether it’s federal or state, is still a monumental proposition.
Q: Do you feel like a state exchange will be a tough sell for many legislators?
A: Of course. Any issue of any magnitude like this is something that is going to be difficult for a number of legislators to deal with. I am hopeful these legislators put aside the ideological view of it and look at it from a practical standpoint, and a pragmatic standpoint of what is it we can do that makes good economic sense for the state of Idaho, what makes good sense for the citizens and what is important to the businesses impacted by this over the long-run.
Q: And as far as education reforms go, did you support those changes last session?
A: Absolutely. You can’t just do reforms without funding them. You have to go forward and continue to move forward with the plan and continue to look at adjustments that need to be made as we go along. Improving your education system is a continual effort, not just something you do one time and then walk away from it.
Q: You mentioned the personal property tax. Are there other ideas you’re working on as far as changing the corporate and income tax rates?
A: That’s not our priority, but we have seen a number of proposals associated with dealing with the income and corporate income tax rates. There are a number of offsets in the state of Idaho for businesses that are already here. When you look at the corporate income tax rate of 7.6, the true effective rate is sometimes as low as 4 percent or even less. It depends on the business, but it’s on a fairly rare basis that a C-corporation will be paying at the 7.6 rate.
Q: Could you support getting rid of any tax exemptions?
A: No, we don’t have a lot of exemptions in the state of Idaho. That issue was actually brought up by the gubernatorial candidate last year that ran against Butch Otter and was soundly defeated. The thing about it is, incentives matter and incentives work. All we have to do is look around the nation to see that incentives have been successful in not only recruiting new businesses to the state but also expanding specific operations a company may have. In terms of trying to get rid of exemptions, we’d take a look at it, but we don’t have a lot so you’d be hard pressed to find something that isn’t appropriate. So I would struggle with that.
Q: Last session lawmakers passed the Hire One Act, an incentive program aimed at creating jobs. It expires at the end of this year. Do you want to see the Hire One Act extended?
A: It absolutely needs to be expanded and extended. When it was adjusted in the Senate last year, it made it so that it wasn’t as workable as it was coming in. It hasn’t been as successful as we would like largely because it’s not on par with counter-incentives in other states. I would really rather see that expanded and improved upon, because we’re talking about new dollars coming into the system. We’re not drawing dollars from an existing revenue stream to pay for that. I was disappointed ultimately with the way that legislation ended up, but it was good to have something on the books that we can expand upon.
Q: Do you know if any of your members are using Hire One, it’s my understanding we won’t get that data until taxes are due?
A: We won’t know that until tax time.
Q: What would you want to see added to Hire One?
A: Maybe something comparable to what South Carolina has. They have one for about $3,500 per new employee and there are very few restrictions on how that is used. Ours is about $1,000.
Q: Are there other types of incentive packages you’re working on?
A: There are some other ones out there, we haven’t been directly involved in many of those. We can’t just always focus in on incentives. They are one piece of the over-all pie for expanding your economy. You need to look at your transportation system. Finding out whether your transportation system is adequate for moving products in and out of the state, as well as getting people to and from work. Businesses are made up of two things: equipment and people. You also need to look at the workforce you have. Do we have the best educated workforce in the nation? I think we have a lot of areas where we can improve upon that. We’ll be looking at additional policies for the long-term, whether that’s in higher education, community colleges and in K-12, and try to find a better synergy between those levels of education to ensure Idahoans have the best opportunity to succeed. You have to look at your energy rates. Our energy rates are some of the lowest in the country, if not the lowest in the country and we need to preserve that. There’s a whole host of things you have to do in order to attract businesses to the state, and attract expansion from the businesses that are already located here. Those are just a few of the many considerations that go in, so it’s not going to be just limited to exemptions or incentives.
Q: Do you think those things you just mentioned, along with incentives and exemptions, are the best ways the state can promote job growth?
Q: Anything else you’d add to that list?
A: We need to look at our natural resources. We need to continue to ensure we have enough water and how that water is being utilized and shared throughout the state. Without water we don’t grow. We also need to continue to look at value added to our existing businesses and ask the question, “What is it they need in order to succeed?” Is that access to more capital markets, and how can our department of commerce and government assist in giving them that kind of access?
This interview has been edited and shortened