Writings and observations

Almost there, and gone

I was discussing earlier today with a Boise journalist the nature of the upcoming Idaho legislative session. Along the topics hashed was that the idea that, in some contrast to last session, this session might be a little less business-oriented – business dominated.

AlbertsonsThe prompt for that thought was the pressure for change in the property tax, a push coming mainly from residential property owners who have argued (accurately) that they have been paying an ever-larger chunk of the property tax bill – an ever-larger chunk of the tax bill, period. (Last week, this subject came up over coffee with a business advocate, who said he hoped this wouldn’t lead to a shift of property taxes on to businesses. To my inquiry about the steady shift, over the last generation, of property taxes away from business and on to residential taxpayers, and whether that might be redressed or corrected, he had no answer.)

Another piece of news, however, might underscore some of this session too: The impending news of the sale of Albertsons.

Go back to the beginning of this year, to Governor Dirk Kempthorne’s state of the state address, when he proposed the Corporate Headqwuaters Incentive Act. He proclaimed:

Tonight, I’m proposing another innovative strategy to attract new corporations and bring high-paying jobs to the state of Idaho. And, more importantly, this strategy will help us retain our base.

Idaho is home to a number of Fortune 500 companies, but in a time of corporate mergers and consolidations, we can never take that for granted. How do you nurture your existing base and attract new corporations? Here’s how:

I have spent the past several months developing a progressive tax incentive package designed to retain and attract corporate headquarters in Idaho. I’m asking for your support of an incentive package that will grab the attention of Fortune 500 companies around the country.

Kempthorne said the proposal was intended broadly, but within hours word swept the Statehouse that it was aimed squarely at Albertsons, with the intent of keeping the supermarket giant’s headquarters planted in its home town of Boise. Within a few days, Dan Popkey of the Idaho Statesman would write – and no serious contradiction to hispoint ever emerged:

“What company is at the head of the queue to bring 500 high-paying jobs to Idaho in exchange for sweeping concessions on sales, income and property taxes? The answer: Albertsons. Kempthorne and other leaders are determined to kill rumors the grocery-and-drug chain might leave Boise for Chicago or some other metropolis closer to major markets. Kempthorne dangled a skeletal proposal before lawmakers Monday. When details emerge, look for meat on those bones allowing retroactive credit to Albertsons for recent job shifts.”

Certainly the Kempthorne-Albertsons-HB306 circle is close enough: Albertsons, which contributed to Kempthorne’s political funds long after he opted out of a 2006 run for governor ($3,750 on April 14 this year), lobbied hard for HB306, and Kempthorne issued a rare scalding press release saying a committee decision “defnied logic” when legislators initially rejected the idea – which they eventually accepted.

So, on one side of the ledger, Albertsons was able to benefit from a tax break. And on the other side?

As matters stand at this writing, Albertsons is on the verge of existing no more, at least not as Idaho has long known it. The Wall Street Journal and a clutch of other organizations are reporting that an investment group headed by Cerberus Capital, Kimco Realty and Supervalu are likely to buy out and dismantle one of Idaho’s venerable companies. More final details may be forthcomingin a few days. As the leaders of Albertsons have become enthusiastic sellers, so they appear to be enthusiastic buyers.

Rendered perhaps a shade more cheerful by a bottom line enhanced by Idaho’s governor and legislature earlier this year.

If the sale and dismemberment of Albertsons is the otherbig story in Idaho as the legislature convenes, it might be in a different kind of mood this session.

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