Corporate Welfare Costly To Idahoans

Corporate monsters gobbling up local businesses like the Pac Man monsters was easy to understand when the K-Mart, Wal Mart, and Home Depots ran the neighborhood hardware and local clothing stores out of business. When the cities and states created “economic development” departments and urban renewal agencies the equation became cloudier, but no less devastating.

Such is the case with a local payroll processing firm which has won a unanimous Idaho Supreme Court decision allowing it to sue the State of Idaho over so-called “tax incentives” which are nothing more than corporate welfare. Employers Resource Management Co. of Boise sued in 2016 after Idaho Dept. of Commerce officials gave a tax incentive to Paylocity, an Illinois company and competitor establishing a new office in Meridian.

The GUARDIAN is particularly concerned that two of the Republican candidates for Governor are involved in the detrimental deals. Tommy Ahlquist and his Gardner development firm will own the five-story Paylocity building in Meridian, but NO TAX REVENUES on the building will go to Meridian, Ada County, ACHD, or West Ada Schools. The taxes will go toward even more urban renewal for the next 20 years.

The City of Meridian put frosting on the welfare cake by making an urban renewal district out of a farm field at Ten Mile and I-84. Meanwhile 500 more workers with cars, and children which will demand schools, sewers, roads, police, and fire services will be subsidized by existing property owners.

Ahlquist’s opponent for the Guv job is Lt. Guv. Brad Little who is proud to take credit for working to recruit Paylocity and has noted that urban renewal laws are a benefit to recruiting new businesses.

The local news and city election in Boise has been dominated by a massive effort of Mayor Dave Bieter and his Team Dave to subsidize a commercial real estate developer with construction of a baseball-soccer sports stadium.

Amid cries of “growth is inevitable,” and “if you aren’t growing, you’re dying,” local property owners are victims of having their taxes diverted to urban renewal and business owners are faced with unfair competition by out of state firms receiving those “incentives,” at the expense of Idaho taxpayers.

Contrary to claims of politicos, growth does NOT pay for itself. Greedy local governments bend over backwards to stimulate growth at the expense of school districts and other local governments forced to build sewers, schools, highways, and expand police and fire departments.

The GUARDIAN growthophobe position remains the same: If a business wishes to come to our fair state, pay a fair wage and the same taxes paid by the rest of us, welcome aboard! If the business is looking for a handout and other “incentives,” look elsewhere.

For a really entertaining explanation see JOHN OLIVER.

Comments & Discussion

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  1. Urban renewal is nothing more than sleight of hand theft from ALL property taxpayers. Who gets stuck paying for all the freebies handed out by urban renewal agencies? And who gets to pay for all the property tax money diverted to urban renewal. Well the short answer is all the property owners.

    I heard this from our city finance director in Caldwell before the economy went into the Great Recession… “I don’t care about people losing their homes and businesses, someone will pay the property tax bill sooner or later” Urban renewal is nothing but theft of property tax money by a hand picked board. They then serve the whim and fancy of Mayor and City Councils where they exist.

  2. Brian Vermilion
    Nov 5, 2017, 2:48 am

    And after we get hosed by the developers, we now are going to take it up the south end by the 200 million dollar Canyon county jail by serial taxaholics Tom Dale and Pam White. Nampa school district is floating it’s latest “must have” levy; the city of Nampa is preparing to hit us with a new sewer treatment plant which will be tens of millions and must be paid for; oh and just wait until we are obligated to join the latest feel good urban composting program which will require us to add yet another color of cart to our fleet we have now. I just need to pay my “fair share” right?

  3. Thanks for shedding some light on these mysterious entities — interesting that the Republican candidates are deeply-involved in this corporate welfare scheme. Maybe it is naive of me to think that government ‘picking winners and losers’ was anathema to the GOP.

  4. chicago sam
    Nov 5, 2017, 1:32 pm

    And in the fair town of Nampa Mother Earth Brewing Company is requesting a 10 year interest free loan of Approx. $100,000 to purchase the right to sewer capacity backed by Mayor Henry. No bank would make this kind of loan. Will be voted on at Monday night City Council meeting.

  5. Eagle Writer
    Nov 5, 2017, 1:54 pm

    Mister Editor, you wrote: “Meanwhile 500 more workers with cars, and children which will demand schools, sewers, roads, police, and fire services will be subsidized by existing property owners.”

    A conservative view of that situation would be: “Meanwhile 500 more workers will be paying auto taxes, gas taxes, property taxes, sales taxes and state income tax, to fund the needed schools, sewers, roads, police, and fire services.”

    Only leftist “economists” believe the government loses money when workers move out of the community (business is dying), and loses money when workers move into the community (business is growing).

    Providing incentives for business recruitment and growth is not the same as providing an unfair advantage to one business over another. Let’s keep those two issues separate.

    EDITOR NOTE–Regarding “incentives,” let’s put the issue at grassroots level (pun intended). If the BLM and Idaho Water Resources grant grazing and water rights to an out of state cattle company, while the existing Idaho rancher has to provide forage on his own deeded land and pay for a permitted water well, we think that sort of business recruitment and growth is EXACTLY the same as providing an unfair advantage‚Ķregardless of how many cowboys are hired or how many F-150s they gas up.

  6. Not an Even Playing FIeld
    Nov 5, 2017, 8:05 pm

    As someone with over 25 years of background in economic and business development in the Boise Valley there are few winners and several losers in this game.

    Winners: There is no question that the developers win in this game. The developers win big. How? The developers get subsidized land deals, loans and in some case free assets to off set the cost of their projects. Things like parking garages, and in the case of Tommy Alquist an entire foundation for a building that is also a bus station.

    In the case of Tommy Alquist his father perfected the art of getting the locals governments to to expand Urban Renewal Zones and then take advantage of the freebees.

    The use of urban renewal zone today creates a windfall of cash for local mayors to use as they please. It is basically a way to grab all the taxes of the improved value and have access to it outside the voters reach.

    In Meridian a cornfield was designated as an urban renewal district. The only thing “Urban” in the area was the multi level gopher holes in the field. There was really nothing “urban” about it.

    Regarding the incentives to business owners from out of town there is a very clear disadvantage to local business owners.

    We call it the “WalMart” effect. The city gives a business like Walmart or in this case Payology discounts on payroll and property taxes that the local business that has been in the area for years don’t get. This gives the out of town folks a huge advantage.

    Having worked to set values on businesses over many years I have yet to see a business whose competitor got a deal improve it’s own balance sheet. In fact the local long time business always looses value.

    Urban renewal and business incentives are unnatural motions to the natural market – the winner is the local government and their cronies not the business community. When you unbalance the market in one area someone suffers while another wins at their cost.

  7. Heinrich Wiebe
    Nov 5, 2017, 8:29 pm

    I worked at CCDC for a brief period. IT was a revolving door of private meetings with wealthy-flashy stakeholders who wanted to leverage their investment off the taxpayer via the skimming tool called tax increment financing and bonds written to pay for things that the developer didn’t want to pay for. I watched land deals go down just ahead of district formation. It was as if they were lining up the bowling pins for the strike. It grossed me out and so I quit. It’s an art of red tape dancing. Fake transparency is the game. Nice website though!

  8. We have always believed in keeping it local and organic growth. Which is why we love the Treasure Valley.

    This kind of stimulated growth will always have its winners and losers. With outside corps being subsidized, they tend to be the winners. Its too bad really.

    I wonder if they subsidized T-Sheets new build in Eagle, the same way?

    Great article!

  9. It reminds me of the cell phone companies, Cable One, and the satellite TV outfits. Great deals for new customers… zippo for long-term customers.

  10. Foothills Rider
    Nov 6, 2017, 5:51 pm

    Wiebe so correct. We saw all the same with Dynamis: serial meetings behind closed doors in smaller groups, seemingly innocent resolutions and land use changes all taking place before anyone knew that Dynamis was a 22 megawatt private power plant that could likely truck in tires to supplement fuel for the process. The deal all made before the public could weigh in on anything. As for similar, with Stadium, see: CONCERNEDBOISETAXPAYERS.COM and today’s start of not-so-surprising news that – horror – meetings were going on without public notice! tsk tsk, Mr. Rice. Shameful e-mails they have on you. Now, if they can just back up a couple of more years and see how/why Bieter may have been involved in swaying Schoen, a developer, to buy a part season minor league ball team under premise that he would get a development bonanza out of it. The “team” and sentiments surrounding it simply a tool for TIF funding for the larger development that needs the connection. Oh, and TIF? Why or how does anyone think this is free money? Without syphoning increased taxes to the developers to fund their projects, where do you suppose the tax money would be spent? If it “would have been” wherever you are thinking, where is it going to come from now? Have you analyzed the general budget for Boise?

  11. That is why urban renewal projects sunset, so they don’t become whores for the greedy. But the wftg don’t let them sunset. They call everything to be in need of renewal – neglected, disenfranchised, dis-invested. Urban renewal needs to stop. If this area is so hot then we don’t need government subsidies for the development and reinvestment of our neighborhoods.

    To the previous writer – those 500 who relocate here and pay all individual taxes do not offset the amount that is put in to the developers pockets, consolidating property, and leaving the potential for the individual to invest at a big zero.

  12. This is excellent reporting and a position I support. I am on the communications team for ISAIAH in the Twin Cities which supports racial equality and opposes the corporate agenda.

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