When Siemens Energy Inc. announced in 2010 that it intended to add 800 jobs and a new product at its Charlotte, N.C., plant, the company put itself in line for up to $22 million in state incentives.
With other states offering funds designed to lure business and jobs, some Idaho business leaders want to do more to entice companies looking to move or expand.
But the Idaho economic developers are looking to take small steps down that road by proposing the state put $5 million to $10 million into a fund for rewarding companies that create high-paying jobs that grow Idaho’s economy.
Details of the proposal are still being worked out. But the mission of advocates like Clark Krause, executive director of the Boise Valley Economic Partnership, is clear: increase the state’s competitive edge for job recruitment by enhancing its incentive package.
The state doesn’t need to lead the nation in handing out extras for companies to expand or come here, Krause said.
But it should, he said, have “thoughtful, well-rounded incentives that at least let us be competitive.”
BVEP is the business-recruitment arm of the Boise Metro Chamber of Commerce, with a valleywide perspective. The BVEP is talking with economic developers around the state, as well as the Idaho Department of Commerce, about pushing for incentives in the 2012 legislative session.
Currently, Idaho’s biggest gun in the incentive game is the Workforce Development Training Fund, which has paid out $37 million to train 26,000 workers — many of them for new businesses — since 1996.
The average training cost is $2,388 per worker, according to the Idaho Department of Labor, which administers the program funded by the state unemployment insurance tax businesses pay.
Idaho isn’t bereft of incentives, said Brian Corde, a managing partner with Atlas Insight, a New Jersey company that helps corporations select sites for their operations. Corde helped with the location of Allstate’s customer information center in Pocatello, with a target of 500 jobs.
The state is seen as having a well-educated workforce, good electric power rates and a good lifestyle, economic developers say.
WHAT WORKS IN NORTH CAROLINA
But in a survey of several states’ incentive packages that Corde did for the Boise Valley Economic Partnership, it is clear that many are putting a great deal of resources into incentives that can be a deciding factor in where companies locate.
Two examples are North Carolina and Texas.
North Carolina does a couple of notable things. The One North Carolina Fund gives incentives for up to five years to companies that meet qualifications, including good wages and a matching financial commitment from the city or county where the business is sited.
A second fund can reward companies for up to 12 years if they meet job requirements and other criteria.
Their operations must provide benefits that are greater than the cost of the incentive. And incentives are not paid in advance but as the company meets its required targets.
Since 2001, the state has doled out more than $103 million in One North Carolina money, contributing to nearly 60,000 new jobs. The state paid out more than $50 million in its second fund between 2003 and 2009.
Such incentives are vital to bringing jobs to North Carolina, where the unemployment rate stands at 10 percent, said Dale Carroll, North Carolina Department of Commerce deputy secretary. “We are surrounded by states that use tools that have some of the same characteristics,” he said.
Without those incentives, he said, “we would not even be in consideration for these new and expanded projects.”
TOOLS IN TEXAS
Gov. Rick Perry began the Texas Enterprise Fund, which, since its inception, has paid out nearly $440 million in incentives that helped create nearly 60,000 jobs, state officials say.
The fund has “become one of the state’s most competitive tools to recruit and bolster business,” said Lucy Nashed, deputy press secretary for the governor.
Incentive funds alone rarely sell a prospect on locating a business in a certain community, economic developers say.
But as the field for where a company wants to move narrows, they can take on more importance. In those cases, Krause said, the Treasure Valley hasn’t fared well. “We are getting eliminated,” he said.
But a plan for building an Idaho incentive fund might not be an easy sell in the Legislature, given the state’s tight economic condition.
“I just don’t know that we are going to have the funds this year to actually do it,” said Rep. Darrell Bolz, R-Caldwell, vice chairman of the Legislature’s budget committee. “The issues I hear a lot of people talking about are primarily dealing with public schools, education and possibly replenishing some of the rainy-day accounts.”
Bill Roberts: 377-6408
JOIN THE DISCUSSION | Register here
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service. If you have any questions, including why your comment may not be showing immediately after you submit it, be sure to visit the commenting FAQ.