Idaho must continue to diversify the economy by recruiting and expanding in many sectors, Don Dietrich, administrator of the Department of Commerce Division of Economic and Community Development, told the Joint Finance and Appropriations Committee this morning.
“Idaho is not insulated from general market hiccups,” he said.
Dietrich, who was filling in after Commerce Director Jim Ellick took a leave of absence, emphasized the department’s role in bringing companies to Idaho.
The Department of Commerce played a role in attracting 20 new companies to the state last year, Dietrich told legislators.
The new companies, which set up in all regions of the state, represented a diverse range of industries – from Hoku Material in Pocatello to High Desert Milk in Burley. The department’s efforts brought $588 million in new investment into the state, Dietrich said.
“For two decades Idaho has benefited from a growth economy, but Idaho must look carefully at what states are doing and compete aggressively,” Dietrich said.
He cited an annual report in Forbes magazine, which consistently ranks Idaho as the 6th best place in the country to do business.
While Idaho has held steady, Washington has moved from 12th to 5th.
Transportation was a component of the ranking, though Forbes measures the success of each state on a broad range of incentives and activities, Dietrich said.
Transportation is not a major issue for companies looking at Idaho, unless they happen to be in a rural part of the state with a specific need – like a distribution company. The labor market and telecommunications infrastructure tend to rank much higher, he said.
The availability of electric power has also limited the department’s ability to recruit new businesses, but it has not been a major obstacle.
“Ninety percent of businesses we’re dealing with don’t have power issues,” Dietrich said.
“We are seeing some larger companies that do have extremely large power needs. We did have a particular company that was looking for something that exceeded 200 megawatts. I believe it’s public record that Micron uses about 80 megawatts. This was something the power company could not plan for.”
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4 Comments
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And 10% of the businesses do have power issues. Comment By Joe Blow
Tuesday, February 5, 2008 @ 1:12 PM
You got that right, Joe. And as it happens, one of the 10% would have brought Idaho in excess of 1,000 jobs at an average salary north of $60K per year. I wonder what the average salary is of the plethora of employees at High Desert Milk. Who runs this state, Idaho Power or the people who buy electricity from them? Hmmmm. Comment By Tac Spayer
Tuesday, February 5, 2008 @ 8:17 PM
One of the real problems here is that Commerce and the GOP legislators rely on reports from organizations like ALEC, and Forbes, that produce slanted reports based upon criteria that site selectors aren't really interested in. To say that businesses seeking to relocate aren't interested in transportation networks should earn Don Dietrich a stern rebuke in the least. Of course no business coming to Idaho is looking for a decent transportation network: ours stinks, and everyone knows it. Companies that need transportation networks aren't looking at Idaho. And that is a problem. For example, when Boeing went looking for a place to build a new 737 manufacturing plant, here were there top site selection requirements: *Suitable runway provisions *Port proximity *Heavy traffic ways *Proximity to rail lines *Support services (fire, police, emergency and medical services) *Training infrastructure *Quality of public schools *Availability of utilities (water, sewer, power, waste, telecommunications) *Transportation enhancements (NOTE to legislators: taxes are not mentioned) So what do we have here in Idaho? A consistently undefunded ITD, and a Governor and Legislature that are hardly interested in enacting any of the Trasportation Board's recommendations. We have a public school system that had to go to the Supreme Court to make the legislature fund it. We have a single as yet open Junior College. And what are our legislators seeking to do? Creating more tax breaks to attract business. The last time they did this, they capped the value against which municipalities could levy property taxes. What that did was reduce the ability of municipalities to provide infrastructure, and support services that businesses are looking for. As long as the Governor, Legislature and Commerce rely upon politically motivated reports from groups like ALEC and FORBES, and ignore true site selection criteria, our business development efforts in this state are for naught. Comment By Chris Blanchard
Wednesday, February 6, 2008 @ 9:24 AM
I had another thought about using "low taxes" as a mechanism for luring businesses here. First, in the case of most business incentives, the local governments - NOT the state - are the ones making concessions. So the state doesn't have much of a role there. Second, out of state corporations already enjoy the benefit of our poorly written state corporate income tax code, so there isn't any reason for them to relocate here to take advantage of our tax situation. Our sloppy definition of business income, for instance, allows out of state corporations to escape plenty of taxes. And, the fact that we are one of the few states that offers the "operating loss carry back" means that out of state corporations that are losing money are free to carry some of those losses back to years where they earned a profit, and file amended tax returns in the state of Idaho so they can get a refund for "overpaid" taxes. Were I an enterprising reporter, I'd see how many checks such as these the state treasurer has cut to out of state corporations. Were I a legislator, I'd wonder why I hadn't closed that loophole yet, and figure out where those revenues could be better spent (or returned to the taxpayers in the form of lower tax rates). So - there is no reason for corporations to locate here to take advantage of the tax code - they already do, and the loopholes they use have no economic justification whatsoever, and should be closed. Comment By Chris Blanchard
Wednesday, February 6, 2008 @ 3:23 PM
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