It's gotten a good deal of attention in Idaho, some in Washington and a little in Oregon. But from any of those angles, Idaho Governor C.L. "Butch" Otter's "Love Letter to Our Neighbors" merits a little thought.
The core of it is business solicitation, specifically going after businesses in Oregon and Washington which are seeing their states raise taxes, while Idaho is not: "We now are reaching out to hundreds of Oregon businesses, and will do the same with those in Washington if the legislature there follows Oregon’s lead. We aren’t offering many bells and whistles, but what we can offer is a business-friendly State government, a highly qualified and motivated work force, and communities where people understand that while government cannot be the solution to their problems it can and must be a champion for their own solutions."
On Monday, Otter wrote that "Last month, for example, Oregon voters approved their legislature’s decision to raise taxes on the wealthy and on many businesses by $727 million. The immediate result was that my phone started ringing – and so did phones over at our Department of Commerce. It seems that word has spread about our Project 60 initiative, and that we are open for business, including theirs! The businesses that have called are emotional about this subject, and they have every right to be. Rising costs – especially during a recession – could put some employers out of business, or at least prompt layoffs. More than 2,000 Oregonians joined a Facebook group to protest the tax increase and commiserate about the repercussions. No less an Oregon business icon than Nike’s Phil Knight calls it 'Oregon’s Assisted Suicide Law II'.”
On Tuesday, Washington Governor Chris Gregoire fired back. She said that "I'm not an expert on Idaho," but pointed out "It looks like they have a corporate tax of 7.6 percent, a sales tax of 6 percent, an income tax ranging from 1.6 to 7.8 percent," she said. Washington doesn't have an income tax (though it has a comparable business and occupation tax), and its sales tax isn't a lot higher. She mentioned (as she often does) the Forbes business rankings of states: "We're now the second best state in the country and they went from seventh to 11th. They're going down in the rankings. Regulatory environment we're ranked 5th, they're ranked 35th. You get my point?"
(Otter's letter refers to studies ranking Idaho lower in tax rates than the others. Note to all: If you want to go state tax-survey shopping, you'll find you can get whatever ratings you want if you look hard enough.)
Oregon's officials by and large haven't expressed terrific concern over this, though House Republican leader Bruce Hanna of Roseburg (who opposed the tax measures) did say in an Oregonian opinion piece today that "As a business owner, I recently received a letter from Idaho Gov. Butch Otter inviting me to bring my company and my jobs to his state. Although I have no intention of leaving Oregon, I'm deeply concerned when other states and cities are actively courting our businesses."
A whole lot of posturing going on. But is any of this likely to make much difference in terms of business opens, closes or moves?
Not likely. (more…)