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Economic incentives build on Idaho’s future

Guest opinion
By Roger B. Madsen, Director, Idaho Commerce & Labor

Idaho’s aggressive marketing effort, enviable quality of life, skilled and dedicated workforce and judicious use of financial incentives have all sustained an almost unprecedented period of growth through the 1990s. These qualities also allowed us to survive a recent recession with significantly less disruption than most states.

We did not let that downturn hold us back. Last year, Gov. Kempthorne and the Legislature took steps to further economic growth. They merged the Commerce and Labor departments, created an Idaho Office of Science and Technology, renewed tax credits for broadband investment and research and development, expanded the job creation tax credit and increased financial support for rural economic development.

In 2004, Idaho had the fourth highest rate of job growth and the seventh highest rate for personal income growth in the nation.

But opportunities for expansion are even greater in 2005 – if we seize them.

Gov. Kempthorne’s $1.6 billion initiative to improve key transportation routes throughout Idaho offers the immediate prospect of thousands of construction jobs in every corner of the state. Over the long term, it promises solid economic growth as increased transportation access encourages business retention and expansion into our rural areas.

The Connecting Idaho plan allows Idahoans, without any new taxes, to immediately enjoy the economic benefits of compressing 30 years of critical road projects into ten. This method will also cost us less money to do these projects now through bonding than it would with the current “pay-as-you-go” method.

About half of Idaho’s federal gas tax allotment will pay off bonds used to finance these projects. There is no risk to the state or its citizens, and the payoff is huge. Improving transportation will unify our state and save lives when U.S. 95 and other routes are safer to travel.

As Idaho’s economy continues to expand, economic prosperity must be felt in every region. Too many rural communities have high unemployment rates. Reinforcing the Rural Idaho Initiative with another $950,000 provides additional funds for job creation projects, and puts more economic development professionals on the front lines to retain, attract and expand area businesses.

Another $375,000 invested in science and technology will only increase what the industry already contributes to Idaho’s economy. Boosting the capacity of the TechConnect program will help high-tech entrepreneurs get their ideas to the marketplace, and ramping up state Small Business Innovation Research efforts will help thousands of Idaho businesses secure federal funds for commercializing technological research.

Gov. Kempthorne’s tax incentives for corporate relocation will cost the state and its taxpayers nothing. If the incentives succeed in attracting a major employer or convincing one to expand, the payoff is huge--at least 500 jobs paying an average of $60,000 or more plus benefits, along with new employment opportunities connected to construction of a $50 million complex. The positive economic impact would be substantial throughout the state.

Using the existing cigarette tax to restore the century-old state Capitol and develop a Capitol Annex in the old Ada County Courthouse offers another $100 million in construction employment on top of preserving a building at the center of Idaho’s history.

The planned $6 million development at Ponderosa State Park on west-central Idaho’s Payette Lake would enhance the lure of one of Idaho’s most popular destinations. More campsites, bike paths, improved facilities and increased public access to the lake will only increase Valley County’s tourism activity.

Idaho is poised for another expansion that should extend beyond the next decade. Our economic challenges of the past four years have admittedly left the state facing difficult financial decisions. But investing now in tools to intensify economic development offers a return that dramatically exceeds the modest cost.

It means more jobs, higher incomes and a rising standard of living in what is already the greatest state in the nation.
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Roger B. Madsen is the Director of Idaho Commerce & Labor
and a former state senator from southwestern Ada County