Business
Two Quarters Does Not A Success Make
April 1, 2010 
The Daily Paper devoted the Thursday cover and much of the inside local space to an optimistic piece about Micron making a profit two quarters in a row, quoting sources who thought it spelled a better economic outlook for the area.
In our mind, that shouldn’t be news–businesses are SUPPOSED to show a profit. The STATESMAN story doesn’t mention that Micron has lost so much over the years as the largest “non-profit” in the state they probably won’t pay ANY income tax in the foreseeable future, thanks to loss carry forward credits.
Meanwhile, that same edition of the Statesman had more the 70 trustee sales advertised on home loans gone bad…no doubt some of those debtors once worked at Micron. Our point is this: Do two profitable quarters at Micron offset 70 home foreclosures as an economic barometer?
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Comments & Discussion
Comments are closed for this post.
Apr 1, 2010, 3:03 pm
This state and the local Legacy media shamelessly cater to Micron and its workers without regard to other businesses and unemployed workers. Micron workers got severance packages AND unemployment benefits AND extended unemployment benefits AND unemployment benefit incentives ($25). I appreciate the tax advice regarding carry-over losses; I will be filing amended 2008 taxes and ensuring that I get “Micron breaks” for 2009 as well. I’m a small “non-profit” at the moment and have suffered major losses too.
One possible good outcome is for Micron to rehire its workers to open the field for non-Micron workers who need jobs just as much as they do.
I predicted you would cover this topic today and I am glad you did. I only wish the DAILY would put common, ordinary working folks instead of upper eschelon cheerleaders on its Vision for the Valley panel who could provide a accurate glimpse of the state’s economic picture.
KTA
Apr 1, 2010, 10:36 pm
I know this is long but… some interesting facts on our local economy…This is a small sampling of one geographic area in Idaho…the data is indicative of many rural area’s. The recovery is not here…I do believe it is on the way but not based upon Micron’s recent record. Their Stock went down today…
Many in Government and in Business don’t “get it”. It’s about people and jobs and surviving.
UNEMPLOYMENT: The recession’s bite out of the Idaho economy may have peaked at a year-over-year job loss of 7.5 percent in August 2009 – nearly 50,000 fewer jobs than in August 2008. It was the deepest year-over-year job loss since World War II, surpassing the 5.5 percent loss at the depth of the double-dip recessions of the early 1980s. Only two years earlier, Idaho had been among the national leaders in job growth. Since August the year-over-year gap has begun closing as job loss appears to have stopped and some prerecession seasonal patterns returned. Idaho’s unemployment rate hit 9.1 percent in October, up from 9 percent in September. It was the highest rate in 26½ years. Source: U.S. Bureau of Labor Statistics
Unemployment in Idaho is at 9.2% (Idaho Labor Dept)
Unemployment in Meridian: 10.2%
Unemployment in Nampa: 11.3%
Unemployment in Caldwell: 13.5%
Unemployment Benefit payments were double the revenues paid into the trust fund in 2008, triggering a 70 percent increase in all unemployment insurance tax rates. While significant, even with the increase the average effective rate for 2009 was below the 2006 level because rate decreases in both 2007 and 2008 brought the tax to its lowest point on record. But the higher rates in 2009 covered only a third of the regular benefit payments, prompting the state to begin borrowing from the federal government to continue paying benefits in June. Rates will hit their legal maximum in 2010, and benefit payments are still expected to exceed revenues by $100 million. Twenty-three other states have gone broke and borrowed from the federal government, and more are teetering on the edge. Source: Idaho Department of Labor
These added job losses will result in an increase in Unemployment tax from 1.8% in 2008 to 3.36% in 2009. State is planning on another tax increase, to maximum allowable by law in 2010!
FORECLOSURES*****
The foreclosure market sales share in Star are the highest of all Boise, Kuna, Meridian, Eagle, Garden City area’s at 72% (Dec 09)
In March 09 Star had a high of 86% foreclosure sales, opposed to 72% in Dec 09.
BUILDING *** (Star Building Department Public records)
In 2007 Star had 129 Residential building permits issued – in 2009 -24 a 80% decrease
In 2007 Star had 13 Commercial building permits issued – in 2009 – 3 a 75% decrease
In 2007 Star had 10 Commercial Remodel permits issued – in 2009 – 5 a 50% decrease
In 2007 Star had 9 Final Plats approved—in past 24 months- none
Business Growth – State of Idaho
In 2008, 24,296 new businesses filed with the Secretary of State, down over 15 percent from 2007 and the second straight annual decline. The previous decline was in 2001 during that national recession. Source: Idaho Secretary of State
Star Elementary****
Last school year (2008/2009) we had 28% of students enrolled that qualified for free or reduced – price lunches based upon 528 students enrolled. That equates to 148 children in need.
In 2005 and 2006 that figure was 20% the increase in 2009, up 8%, almost mirrors the unemployment rates for the state which is at 9.2%…
The rate for school year 2009/2010 currently sits at 34.59% of children enrolled. Current enrollment is at 507, down 21 students from last school year. Currently, based upon total enrollment figures and current free/reduced lunch percentages we now have 175 kids at Star Elementary participating in this program.
• SOURCES
* Idaho Department of Labor
** American Bankruptcy Institute/www.Creditcards.com
*** Star Building Department Public records
**** Meridian School District web site and Star Elementary School Administration
***** IMLS
Apr 2, 2010, 10:14 am
Thanks, former Commissioner Edgar, for the straight talk. You always ‘got it’ as a Commissioner, and you still do as a citizen. I found the Statesman Micron story ridiculous and pandering as always. This valley does not need false hope but real solutions for what I also believe will be a long recovery.
Apr 2, 2010, 10:42 am
I think we need to import some more people with no skills from other states and countries so that we will have enough votes to keep Dave and friends in office. And we will finally have a few people riding the buses too… and then we can get money for a train…
Apr 2, 2010, 11:20 am
Mr. Edgar has figured out Idaho is all about giving away anything and everything state and local officials can do in the name of a business friendly climate.
I welcome businesses to Idaho but only if they are willing to pay their way and not download tax burdens on people living here in the name of “incentives and entitlements”.
Pay your way or go somewhere else. No skin in the game is a prescription for an easy pullout by companies. They need to be vested in our community if they want to take advantage of what our workforce has to offer.
Does anyone really think “Right to Work” has been a positive for Idaho? No Rights for Workers is a more reasoned title for this law.
Apr 2, 2010, 1:55 pm
If that profit translates into bonus checks for existing Micron employees’s or hiring additional staff, then, yes, statistically it will probably more than offset the impact of those 70 foreclosures. You are absolutely correct that their corporate profit may not impact state tax revenue directly, but some of those $’s that make it into the hands of employee’s will not only end up in the economy, but also be paid as taxes.
Apr 2, 2010, 6:42 pm
I left Boise six months ago for St. Louis. There are myriads of firms in the St Louis Metropalitan area. None of them are hiring – manufacturing, financial, retail, etc. A Pulitzer Prize sponsoring local newspaper is documenting the decline “unless we get our act together”. Relative to Boise’s predicament, relying on one companie’s statement of profitability to proclaim the state of Idaho is now again whole via the local press seems to approache the consideration that most people in Idaho are delusional (exepting readers of this blog).
Apr 3, 2010, 2:11 pm
I don’t think those profits are from the Boise site, probably from the off shore operations. Don’t look for any hiring at the Boise site, it’s glory days are long gone.
Apr 3, 2010, 4:15 pm
Headline news today from the department of labor that unemployment dipped from 9.5 percent in February to 9.4 percent in March and that all is right with the whole darn world! Peachy outlook:
http://www.idahostatesman.com/2010/04/03/1139902/finally-jobless-rate-falls.html
Baloney, check the figures next month, the same as the Governor and the Legislature are on income tax receipts. I hope I’m wrong. I know of several companies locally that have frozen hiring, and have laid off and fired employees. I know others who have been searching for jobs for more than four years without unemployment benefits, severance packages or rainy day slush funds such as the idaho state tax commission which paid out refunds BEFORE tax day April 15, then zeroed out and then found money to replenish the fund. Don’t we all wish! I know someone selling his blood three times a week to buy food and other necessities because he is 60, an unemployed carpenter who moved out of state for menial work, but recently returned on the promise of a job that disappeared. Just today, I saw that an old favorite haunt of my son’s is closing: Hollywood Video on Fairview in Meridian. That along with Boise Blue and other local faves are as important as the BIG GUYS. Could be competition, road construx or whatever. Still I hate to see such closures. I do want Micron to succeed, I do wish the best for H-P, the return of MPC, etc. However, I also feel for the small businesses and unemployed who don’t get breaks. Whatever Micron does will not return foreclosed homes to their rightful and devastated owners. That’s the Idaho and American tragedy of this economy and the mindset of politicians who have not walked a mile in our shoes. It doesn’t matter which party caused it, it only matters that we find a common solution that is fair and equitable to all Americans.
Correx from earlier post: echelon
KTA
Apr 4, 2010, 7:54 am
If a company cuts enough costs, it may likely see profit. As has already been asked, is it sustainable?
As far as the local economy goes, I’m tired of the whining. Wherever I go, restaurants are packed, I see people shopping and things seems busier than ever. The issue is the migration of people here from other states who were looking for cheap houses but have no job prospects. Sorry, time to leave.
Apr 4, 2010, 4:36 pm
K-bear: Lived here 30 years and staying. Lucky those who can still afford to eat out and shop. You can cut costs, but if you have no business you cannot survive. Obviously the economy has not hit your pocketbook, family or veins. It’s that kind of elitist attitude that threatens Idaho and the nation. You are, however, entitled to your opinion. I will, however, continue to fight to help those who cannot help themselves.
Apr 4, 2010, 10:53 pm
Idaho will re-elect Gov. elect Otter. Otter and the Idaho Tea Party will save us with animal husbandry, and stuff.