BOISE — Idaho Democrats on Tuesday promoted their groundwork in the development of a new state business tax incentive law that ultimately helped to bring the Amy’s Kitchen food processing plant to Pocatello late last year.
At Tuesday morning’s 2015 Idaho Democratic Address to Idaho — the day after Idaho Republican Gov. C.L. “Butch” Otter’s State of the State and Budget Address — Senate Minority Leader Michelle Stennett, D-Ketchum, lauded the work done in 2012 and 2013 by Sen. Roy Lacey, D-Pocatello, and House Minority Caucus Chair Donna Pence, D-Gooding, on tax incentive legislation for expanding agricultural production facilities.
Although none of the versions of the legislation authored by Lacey and Pence gained traction at the Idaho Legislature — where Republicans are in the supermajority at 80 percent membership — the principle of Lacey and Pence’s measures were incorporated into 2014’s successful income tax credit available to businesses inside and outside the agricultural sector, Democrats said.
“Idaho wins when families and businesses and communities succeed together,” Stennett said. “One example of this is Amy’s Kitchen adding new jobs to Pocatello. The governor has noted that incentives helped bring the opportunity to Idaho workers. That incentive was brought to the Legislature several years ago by our Idaho Democratic lawmakers – Sen. Lacey and Rep. Pence.”
In 2014, the Idaho Legislature passed — and Otter signed into law — a business tax rebate law that had been estimated to give $3 million annually in tax breaks to diverse business sectors, including agriculture.
The tax incentive law that went into effect July 1, 2014, was designed to potentially give the tax breaks to expanding businesses within Idaho and relocating businesses in the Gem State.
“The idea’s good,” Pence said. “It got done. And, the only thing is, we’d just like a little bit of credit that says we initiated the idea.”
Lacey and Pence in 2012 and 2013 had developed legislation that would have given agricultural property tax credits up to 30 percent on processing plant construction projects bringing “value-added” new jobs.
Lacey also noted that in addition to allowing business sectors other than agriculture, the final business rebate bill that became Idaho law last year contained a number of changes from the legislation that he and Pence had originally crafted. Those changes were in collaboration with Idaho Department of Commerce Director Jeff Sayer “and a member of the governor’s office,” after the 2013 legislative session, Lacey said.
“We changed the payout, and changed the name, and took the ag off of it,” Lacey said. “We changed the payout from a rebate on your capital expenditure, which is limited, to a rebate on your taxes paid, which is unlimited, which is great.”
Lacey and Pence also agreed with Sayer to let the idea embodied in the original legislation be expanded beyond the agriculture industry — to benefit other businesses in Idaho, Pence and Lacey said.
“After two years of getting it slapped down (in the Legislature), we had to do something different,” Lacey said.
Said Pence: “He (Sayer) went ahead and expanded it with our permission. So, it’s not like he stole it, or anything.”
Lacey said it was a decision of pragmatism to agree to move the agriculture tax break idea through the process via the vehicle of the ultimately successful bipartisan legislation.
“Absolutely,” Lacey said. “It’s good for Idaho. Do you want to do what’s good for Idaho, or walk around with a crown on your head?”
Dozens of legislative co-sponsors, both Republicans and Democrats, were listed on the successful 2014 business tax rebate legislation that became law.
Lacey said that he and Pence had originally viewed the agriculture tax incentive bill as pilot legislation to eventually expand to other industries.
“They opened it up to everything, and it’s working, so maybe we were being too conservative as Democrats,” Lacey said.