[Vision2020] Fw: [Uv-Eye-Opener] Saying "Oui!" to corporate tax breaks

[Sue Hovey]

I suspect many of you already receive Jim's Eye-Opener, but just in case.  It always makes for interesting reading.

Sue H. 
----- Original Message ----- 
From: Jim Hansen 
To: UV Eye Opener 
Sent: Saturday, March 01, 2008 10:29 AM
Subject: [Uv-Eye-Opener] Saying "Oui!" to corporate tax breaks


 UV-Eye-Opener
Volume 11, Number 6 - February 18-29, 2008
United Vision for Idaho & United Action for Idaho
An update of Idaho's legislature from a progressive perspective. Pass it on...


Infatuation with tax giveaways strikes again. On Thursday, if you walked by the House Revenue & Taxation Committee you would have seen a pack of legislators fawning over their latest corporate friend: a French corporation called Areva, Inc. A majority of lawmakers on the committee said a giddy "Oui! Oui!" to two bills that give away a big chunk of Idaho's tax base to entice the company to build a facility in Idaho. The site consultants for the company - who no doubt receive generous compensation in return for all the tax breaks they get for their client - would not guarantee that Areva will actually set up shop in Idaho. After the vote, they probably flew to Paris to compare similar goodies offered by other states to see which one was the biggest sucker. Study after study show that quality education, and educated work force and transportation and communication infrastructure are what companies look for when they want to locate a new facility. Not more tax breaks. Check out an analysis by Good Jobs First on "How Site Location Consultants Manipulate Corporate Investment Decisions."
 
How do you say "shift" in French? Since Idaho must balance the budget, these tax break bills simply shift the tax burden to other taxpayers who don't have slick consultants lobbying for them. The fact that the legislature has already revised its revenue projections down for this year is evidence that past tax give-aways do have consequences. House Bill 561 would extend the sales tax production exemption to Areva's line of work. The production exemption is based on the theory that some companies should not have to pay sales tax on things they acquire to produce a product since that product will be subject to sales tax when it is sold. It did not seem to bother the majority on the committee that this French company's "product" (enriched uranium) is not likely to be sold, let alone taxed, in Idaho. House Bill 562 goes even further, giving Areva a cap on its property taxes if it reaches the investment level its consultants promise. In fact, the property tax give-away is twice as generous as the cap legislators gave to Micron a few years back.

The sales tax on food "part deux." Perhaps feeling guilty at giving away such generous gifts to a foreign company, the tax committee printed a bill on Friday that would help offset some of the impact of the sales tax on food. There was a big difference how the committee approached each issue, however. With Areva's bills, Chairman Dennis Lake scheduled several proposals so they could be evaluated together. With the tax on food, the chairman is scheduling them one at a time, refusing to let alternatives such as removing the food tax entirely from coming before the committee. The new bill, House Bill 588, acknowledges that low income families spend more of their household income on food than wealthier families, but it offers only a small increase in the credit (far less than the actual impact of the sales tax on food). It provides a refund for Idaho's poorest taxpayers to apply to receive $50 if they don't make enough to pay income taxes but, sadly, it also prohibits low income families that are forced to rely on food stamps from getting the credit. To keep too many people from hearing about the bill, the committee scheduled the public hearing for first thing Monday morning.

"Au revoir" to the promise of paying teachers for going the extra mile. After many long days of testimony on competing approaches on how to evaluate and compensate classroom teachers for improving their skills and taking on additional responsibilities, senators were presented with a so-called "compromise" bill this week. It squeaked out of committee and was killed by the full Senate on Friday. The bill's biggest weakness was that it did not involve teachers in coming up with a workable system and continued to rely on standardized test scores to determine a teacher's ability. Senate Bill 1436 stripped some of the most offensive provisions of Superintendent Tom Luna's original bill (namely the punishment of linking a temporary salary boost to abandoning their contract rights). Even though the sponsor of SB 1436 Sen. John Goedde presented it as a "compromise," his use of the term was disingenuous. Enough of Goedde's colleagues saw through it and sent him back to the drawing board. 

Turning their backs on humanity. Last week, the Senate State Affairs Committee put Idaho in a diminishing group of public entities that have turned their backs on murder and terrorism in the Darfur region of Sudan. John Sullivan deserves huge thanks and respect for his work to bring thousands of people in Idaho together to support this bill. Rep. Nicole LeFavour, one of the bill's co-sponsors, wrote a reflection on the cynicism of the Committee's vote in her blog of February 21. The staff of the Public Employee Retirement System of Idaho (PERSI) spent public money to lobby against the bill, even though the state was protected by a federal law that encouraged states to divest from companies funding genocide in Sudan. PERSI made sure the Republicans on the committee fell in line by having one of its board members who has also been the Idaho Republican Party Chairman sit in front to keep an eye on the Senators as they cast their votes. Senators Joe Stegner, Bart Davis, Clint Stennett and Kate Kelly voted yes. (2Rs & 2Ds). Senators Brad Little, Bob Geddes, Mike Jorgenson & Denton Darrington voted no (4Rs). It was up to Chairman Curt McKenzie of Nampa - one of the early supporters of the bill - to break the tie. Students from Northwest Nazarene University in his home town had testified about a resolution they passed in support of Senate Bill 1367. McKenzie, however, buckled under the political pressure and voted no.

Watch out who's in the passing lane? This time of year, bills get introduced and start weaving through the process like a NASCAR driver in rush hour traffic. It is not pretty. On Wednesday, the governor's office went to the Senate to present his bills to increase vehicle registration fees to pay for roads and to help cover some of the cost of the state police. But, the next day, the House Ways & Means Committee (a special leadership committee that only meets when the Speaker of the House wants it to) quickly gathered to introduce three new bills. It convened again on Friday to introduce two more. Among these are two variations on the governor's fee increase; a bill that will place limits on how money is spend on road projects with the GARVEE bonds (remember the debt-financed projects that former Governor Kempthorne pushed through in 2006); and a bill that scrutinizes how the Transportation Department does business with consultants and contractors. The way the bills suddenly popped up seems to have triggered a little road rage on the part of some legislators and the governor's office. Of course, being ignored in all this traffic is any plan to empower local communities to actually address congestion with a variety of transit options.

What does open government smell like? Some people think thousands of cows or pigs confined in a single operation will smell like (how do I say this delicately) like manure. I suppose some people may think they will smell like "fine Corinthian leather." If you live over a mile away from the operation, it does not matter what you think you'll smell. Idaho law prohibits you from testifying at public hearings on siting the operation. All the new wind turbines cropping up in Idaho attest to the fact that this is one windy state. The one-mile limitation is absurd and the Senate repealed it last year. But something stinky happened in the House. Rep. Lenore Barrett, chair of the Local Government Committee, was permitted to kill the bill by never scheduling a hearing. This week, the same bill - Senate Bill 1402 - passed by a 30-4 margin. (Senators Steve Bair, Monty Pearce, Mel Richardson and Jeff Siddoway were the four who must have lost their sense of smell). So, the question remains: will Barrett and the Speaker of the House keep the SB 1402 bottled up or will they expose it to the fresh air of open government? Stay tuned. Or, should I say, keep your nose to the wind.


UV-Eye-Opener is a joint publication of United Vision for Idaho & United Action for Idaho
More information on issues pending on the state and federal level
can be found at our websites www.uvidaho.org
and www.unitedactionforidaho.org
Call us at (208) 331-7028

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