mendiola MARK
MENDIOLA

 
Reports

To paraphrase the start of Charles Dickens’ classic novel “A Tale of Two Cities,” Pocatello’s economy has witnessed the best of times and worst of times in recent decades, experiencing bipolar mood swings that have wildly swung like a pendulum.

Shutdowns of the Bucyrus-Erie complex, Garrett Freightlines’ trucking empire, FMC’s elemental phosphorus plant, various Gateway West Industrial Center manufacturing concerns, Ballard Medical, etc., have been major Gate City setbacks over the years. Closure of the Heinz frozen food plant earlier this year in Pocatello was another major economic and psychological blow.

At its peak, the Heinz plant in Pocatello employed more than 800 who worked its food processing lines, eclipsing the J.R. Simplot Co., ON Semiconductor and Union Pacific Railroad as the Gate City’s largest private employer.

Heinz’ announcement several months ago that it would close its 500,000-square-foot factory near the Quinn Road overpass and terminate its remaining 410 employees stunned the community, sending shock waves throughout Bannock County. The unexpected shutdown was devastating for many and a gut punch to Pocatello’s economy.

That bad news came on heels of the ignominious shutdown of the $700 million Hoku polysilicon plant in Pocatello. Once operating, Hoku was to initially employ 200 and eventually boost its payroll to 400. Those ambitious plans quickly evaporated into the stratosphere, leaving many contractors in a financial lurch, when Hoku filed for bankruptcy.

At the end of October, however, Idaho Gov. Butch Otter and Pocatello Mayor Brian Blad announced that Amy’s Kitchen had acquired the Heinz plant and expects to begin operations as soon as December, initially hiring 200 but anticipating its payroll could swell to 1,000 in 15 years — an announcement that frankly exceeded my expectations.

Amy’s Kitchen Co-Founder Rachel Berliner and CFO Mark Rudolph joined Otter and Blad, plus city, state and county officials, at the revamped Pocatello Regional Airport to make the announcement to a large, enthusiastic, receptive crowd.

Berliner praised Idaho’s swift response in making the mutually beneficial arrangement possible. Rudolph said Amy’s Kitchen could expend $75 million in capital investments here over the plant’s duration. He said the company’s growth would have exceeded 30 percent this year had the Gate City operation been up and running.

To their credit, Otter, Blad, Idaho Commerce Director Jeff Sayer, Bannock Development Corp. Executive Director John Regetz and a host of other Idahoans rapidly mobilized to finalize the Amy’s Kitchen deal, giving laid off Heinz workers a boost of direly needed hope and encouragement, revitalizing an important production site.

Amy’s Kitchen is the nation’s leading maker of organic, vegetarian and non-GMO convenience foods, riding a burgeoning wave of popularity among Millennials and other health conscious Americans that promises to ensure the private, family-owned company’s longevity. The California-based company has enjoyed double digit growth since its inception 26 years ago.

Amy’s Kitchen employees in Pocatello are expected to average $33,000 a year in wages that are anticipated to total $342 million over 15 years, in addition to health benefits and scholarship opportunities. New state tax revenue from the operation is projected to hit $35.7 million. Commerce’s Sayer said Idaho’s reimbursement will be worth $6.7 million.

Some critics have questioned the wisdom and effectiveness of granting Amy’s Kitchen a 26 percent credit on its corporate income, sales and payroll taxes through 2029 under Idaho’s new Tax Reimbursement Incentive, which took effect on July 1, and Bannock County commissioners giving it a matching 75 percent tax abatement on the existing plant and future investments.

Proponents counter that the hundreds of food processing jobs created, the multiplier effect of wages paid, the positive impact on eastern Idaho’s agriculture sector, spinoff business generated and vote of confidence from Amy’s Kitchen more than offset any negatives from the tax incentives, which competing states effectively have used to attract industry at Idaho’s expense.

Amy's Kitchen announcement

Amy’s Kitchen Co-Founder Rachel Berliner addresses a large crowd at the Pocatello Regional Airport to announce her company’s acquisition of the Heinz plant. (photo/Mark Mendiola)

Sayer points out that the Gem State’s Tax Reimbursement Incentive helped persuade Amy’s Kitchen executives to select Idaho over New Mexico. That incentive also was a pivotal reason SkyWest decided to establish a new maintenance operation at Boise’s airport and create 50 to 100 jobs averaging more than $50,000 in annual pay.

On the flip side of the uplifting Amy’s Kitchen announcement comes an ominous development — the looming closure of Pocatello’s regional mail distribution center, which would have a deep, widespread impact not only on greater Pocatello, but all of eastern Idaho.

Pocatello Mayor Blad and Chubbuck Mayor Kevin England recently joined dozens of postal employees in a protest outside the distribution center, where nearly 534,000 or close to half a million pieces of mail are processed and sorted each day.

If the Pocatello postal distribution center closes on April 18, 2015, as scheduled, along with 81 other centers throughout the nation, mail that normally takes two or three days at a max to deliver conceivably could take up to a week, having an untold negative impact on commerce and convenience.

Forty-five of the 80 Pocatello employees who work there stand to lose their jobs, which average $50,000 in annual pay, as postal distribution centers in Provo, Rock Springs and Elko also are merged into a single Salt Lake City conglomeration.

Blad, who has been aggressively trying to reverse the sorting center’s closure, tells me the annual U.S. Postal Service payroll in Pocatello stands at $2.5 million, creating a major economic impact. Small businesses and rural communities benefit from the convenience of next day deliveries provided by the distribution center, as well, he notes.

Pocatellan John Paige, president of the Idaho State Association of Letter Carriers, also informs me that Idaho Rep. Mike Simpson supports a moratorium on closing the postal distribution centers, but Sens. Mike Crapo and Jim Risch have not signed onto preventing the adverse shutdowns.

As Pocatello approaches 2015, its Jekyll and Hyde economy seems to be following a recurring plot true to form as another chapter is turned. The good news of Amy’s Kitchen breathing life into the Heinz plant is tempered by potential closure of the U.S. postal distribution center only a stone’s throw away on Flandro Drive in the plant’s shadow.

Pocatello’s economic track record has been one of fits and starts since the 1980s. Like a split personality, the economy invariably seems to take steps backward for every advancement made. Amy’s Kitchen’s arrival coinciding with the potential closure of Pocatello’s regional postal distribution center is another example of that bizarre dichotomy.

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mendiola MARK
MENDIOLA

 
Reports

U.S. Department of Energy Secretary Ernest Moniz and other high-powered industry and government speakers generated a buzz of voltage at the recent Intermountain Energy Summit in Idaho Falls attended by some 300 participants from 19 states and two Canadian provinces.

Idaho Falls Mayor Rebecca Casper warned those in attendance midway through the summit that the Shilo Inn where they were meeting might be blacked out after a truck slammed into a power pole in the city. As it turned out, the lights stayed on, but many of those at the energy conference could not help but be bemused by the incident and see the irony.

Casper and Post Register Publisher Roger Plothow were driving forces behind the successful summit, which took 10 months to organize and drew Idaho Sens. Mike Crapo and Jim Risch, Rep. Mike Simpson, Gov. Butch Otter, Idaho National Engineering Director John Grossenbacher, U.S. Nuclear Regulatory Commissioner Kristine Svinicki and other notables.

Featured speaker Robert Bryce, an energy issues author and journalist, pointed out that while the United States leads the world in reducing carbon dioxide emissions, even if it could cut those greenhouse gases to zero, global CO2 emissions would increase by 7 percent as Third World countries burn more coal to ramp up their economies.

Bryce noted that coal consumption in Thailand, Vietnam and Indonesia — with populations totaling 400 million — has increased from 2,500 percent to 5,900 percent since 1985.

“They are building their economies on the back of hydrocarbons,” following the examples of the United States, Canada and Europe, Bryce said, adding that China and India also are burning large volumes of fossil fuels to stoke their economic growth.

Calling himself a “resolute agnostic” in regards to the climate change debate, Bryce said he is adamantly in favor of nuclear energy and natural gas, adding “you can’t just wish coal away.”

energy conference

 
Idaho U.S. Sen. Jim Risch greets Energy Secretary Ernest Moniz at Intermountain Energy Summit.

 
Calling the United States “the OPEC of coal,” Bryce said America’s coal reserves are the equivalent of 900 billion barrels of oil. By 2018, it is projected that global coal consumption will outstrip global oil consumption. From 1990 to 2010, 800 million people worldwide gained access to electricity via coal. “Coal is here to stay,” he said.

The United States leads the world in oil and gas drilling technology with digital controls, better bits and more sophisticated drilling rigs. More than half of the world’s rigs are in the U.S. “The technological edge in the oil and gas industry is continually pushed out.”

A common concern expressed by several summit participants was the lack of a strong, coherent U.S. national energy policy for many years. Dr. Moniz said the Obama administration is pursuing an “all of the above” approach, highlighting the benefits of nuclear, natural gas, solar and wind options.

The U.S. has invested $6 billion in capturing carbon dioxide, using it to pump 300,000 barrels of oil per day, and an $8 billion loan guarantee program is targeted for fossil fuels that do not generate high carbon dioxide emissions, Moniz said, adding the nation’s increased use of natural gas is responsible for roughly half the U.S. reductions in CO2.

While the United States produces 8.4 million barrels of oil a day and imports have gone down dramatically, the nation still imports seven million barrels per day, the DOE secretary said.

Moniz pointed out that a polar vortex created a propane supply crisis last winter in the Upper Midwest and natural gas prices spiked. Transporting oil by train and infrastructure challenges are other issues that must be addressed, he said.

Crapo said America needs a strong energy policy, and an opportunity exists to craft one. “We sit in the middle of the richest part of North America’s resources,” he said. Risch noted that he and Crapo vote together more often than any two senators from other states or 99 percent of the time.

Risch and Sen. Dick Durbin, D-Ill., will be hosting a National Lab Day soon on Capitol Hill to highlight the importance and successes of the nation’s laboratories, such as INL. Fortifying and protecting the nation’s electrical grid system from terrorist attacks needs to be a top priority, Risch warned.

Simpson chairs the House Energy and Water Development Appropriations Committee on which he has sat for 12 years. Noting he has served under three presidents and five DOE secretaries his 16 years in Congress, Simpson said the U.S. lacks a coherent, sustainable energy policy. Each new president shifts direction upon assuming office, he noted.

“There has got to be an energy plan not based on the cost of energy today,” Simpson said. “It has got to be based on sustainability and reliability.”

Because of onerous rules and regulations, the United States could not construct an extensive interstate highway system like it did during Dwight Eisenhower’s presidency of the 1950s, Simpson said, praising Moniz’s long term vision as energy secretary.

About 72 percent of the federal budget is mandatory spending while only 28 percent is discretionary spending. “We’ve been trying to balance the federal budget by cutting discretionary spending,” Simpson said, noting Sequestration mandated 50 percent automatic cuts in defense spending, which he called devastating.

DOE competes with the Army Corps of Engineers for funding. About $73 million recently was cut from funding for nuclear energy and shifted to Army Corps projects, which virtually every congressional representative enjoys, Simpson said.

The U.S. Senate has not enacted any appropriations bill, and the federal government’s funding runs on continuing resolutions. “This is not a good way to budget. … My one goal in life is to try to actually complete the appropriations process on time,” he said, noting the last time Congress did that was in 1994.

“The reality is Congress has to have the courage to stand up and address mandatory spending and tax reform,” Simpson said, lamenting that the United States has the highest corporate tax rate in the world and cannot compete in the 21st century.

“We’ve got to have the courage to make the changes to the tax code and entitlement programs if we ever want to get this country back on track.”

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mendiola MARK
MENDIOLA

 
Reports

When he addressed a large crowd of eastern Idaho business and government leaders May 30 at Idaho Central Credit Union’s state headquarters in Chubbuck, Idaho Commerce Director Jeff Sayer acknowledged there has been some resistance to merging the economic development agencies of Bannock, Bingham and Bonneville counties into one entity.

Accompanied by Idaho Labor Department Director Ken Edmunds, Sayer spoke at a Regional Economic Development Initiative gathering sponsored by ICCU, Pocatello Medical Center and Idaho National Laboratory. Those attending included INL Director John Grossenbacher, five mayors from the region and congressional representatives.

Similar meetings were held at Idaho Falls in February and Blackfoot in March to address possibly creating a single economic development organization for the region.

Some Pocatellans have expressed concerns that the drive to merge Bannock Development Corporation with Grow Idaho Falls Inc. and Bingham Economic Development Corporation will be to the advantage of Idaho Falls and Blackfoot at Pocatello’s expense.

Sayer said he has heard some refer to creating an eastern Idaho economic development organization “a hostile takeover” and express misgivings that the matter is being forced on them. Others have wanted it created as soon as June.

“There’s a lot of mistrust under the surface,” the commerce director said, mentioning he has heard frustrations that are 10 years old. “If this fails, it will not be resurrected in our professional lifetimes.”

He urged those in attendance to proceed slowly, clarify their message and listen to each other. Combined, eastern Idaho’s work force is the second largest in the state. The Interstate 15 corridor has “a powerful collection of assets,” he said, noting it took Magic Valley 10 years to hit its stride and perfect its business model.

“If eastern Idaho comes together, the ‘great state of Ada’ would wonder what in the heck happened,” Sayer remarked.

Sayer said Idaho is “a long ways behind” competing with other states, some of which are merging as regional forces in the Southeast and the Midwest. He agreed with Mike Mullis of J.M. Mullis, Inc., a project location specialist, who said Idaho has an identity problem. Mullis assisted in bringing a new Clif Bars bakery to Twin Falls.

Sayer emphasized that Idaho boasts robust aerospace, manufacturing and energy industries in addition to its agricultural strengths.

Edmunds said a central focal point or voice is needed to represent regional economic development, but local organizations also need to be retained in some format. He also suggested an independent group be brought in to evaluate the eastern Idaho economic development issue.

The state labor director said some way also needs to be found to hire an executive director to lead the regional organization for at least three years with a focus primarily on marketing. “Don’t consider this a compromise,” Edmunds said.

John Regetz, Bannock Development’s executive director, noted that most initial contacts by outside companies are with the Idaho Department of Commerce, which directs them to existing economic development organizations within the state.

At a Bannock Development investors reception earlier in the week, Regetz discussed the shutdown of the Heinz food plant and Hoku polysilicon plant, which has impacted about 650 jobs in Pocatello. He said his agency is working closely with prospective buyers of the Heinz food plant and cooperating with JH Kelly in brokering the Hoku property.

Participants at the Regional Economic Development Initiative event included Chubbuck Mayor Kevin England, ICCU CEO Kent Oram, Idaho Labor Department Regional Economist Dan Cravens, Citizens Community Bank CEO Ralph Cottle, Portneuf Medical CEO Dan Ordyna, ON Semiconductor General Manager John Spicer, North Wind and Grow Idaho Falls representative Ann Riedesel and Idaho State University Business Dean Thomas Ottaway.

INL Program Manager Stephanie Cook and ICCU Marketing Specialist Todd Blackinton served as moderators.

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mendiola MARK
MENDIOLA

 
Reports

Facing a May 20 Republican primary election challenge from Idaho Sen. Russ Fulcher of Meridian, Gov. C.L. “Butch” Otter touted the state’s economic advancements under his leadership when he spoke at an April 29 Greater Pocatello Chamber of Commerce breakfast.

Fulcher, Senate majority caucus chairman, hopes to derail Otter’s drive to secure a third term as the Gem State’s chief executive. During his morning speech to a crowd of about 400 at the Red Lion, Otter said after his 99-year-old mother urged him to run for re-election, he helped her fill out her absentee ballot.

Otter paraphrased Anglo-Irish statesman Edmund Burke who said all that needs to happen for a good organization to go bad is for good people to do nothing. “Idaho is in pretty good shape,” he said. “The economy in the state continues to grow.”

Publications such as the Wall Street Journal and Forbes have ranked Idaho as the fifth best state in which to do business. The top five states are all governed by Republicans in the West, with Utah topping the list, Otter said.

While much has been said of North Dakota’s oil and natural gas boom, it is not well known that Idaho is now a natural gas producing state with 4.2 million cubic feet a day of “sweet gas” pumped in southwestern Idaho’s Payette County, where Idaho Power runs the Langley Gulch Power Plant capable of generating 300 megawatts of power, the governor said.

In 2008, Otter launched “Project 60” to boost Idaho’s Gross Domestic Product from $51.5 billion in 2007 when he took office to $60 billion last year. The state’s GDP is projected to hit $62.4 billion this year, creating jobs and broadening the tax base, he said. “We’re running ahead of economic projections a little bit.”

Idaho’s unemployment rate went from 2.7 percent about seven years ago to a peak of nearly 9 percent about four years ago before declining to its existing rate of 5.2 percent, which is 1.5 percent better than the nation’s jobless rate, Otter noted.

otter
 
Governor Butch Otter converses with Heidi Clark, a Bank of Commerce assistant vice president, following his breakfast address in Pocatello. (photo/Mark Mendiola)

He pointed out about $300 million in taxes have been cut during his term as governor, including personal property, corporate and individual taxes. The Legislature this year appropriated $83.5 million in new education funding, which he conceded partially was “backfill” for sharp cuts in state spending for schools, colleges and universities over recent years.

When he first took office as governor, business leaders told Otter that they could not hire Idaho high school graduates because of their poor remedial skills. “We were not getting the best bounce for the buck,” he said, later commenting that a well-educated citizenry is the best line of defense against any form of tyranny.

Otter said that when he was lieutenant governor, Gov. Cecil Andrus charged him with boosting Idaho’s international trade because of Otter’s extensive global travels as an executive for the J.R. Simplot Co., which provided french fries for McDonald’s fast food outlets in 82 countries. Idaho’s exports have burgeoned from $700 million to $6.5 billion a year, he said, estimating he has been on 18 or 19 trade missions.

Otter said there are more realistic opportunities in the business pipeline than ever for Idaho with companies now deciding on locations before they officially announce. In the last 14 months, the Magic Valley has enjoyed $800 million in new capitalization.

Chobani boosted its original plan to invest $225 million in the world’s largest yogurt plant near Twin Falls to $428 million, Otter said. Clif Bar & Co. decided to build its first ever plant at Twin Falls at a cost of $160 million. Together, both companies will employ more than 1,000.

Glanbia Foods is opening a $15 million new cheese innovation center and corporate office in Twin Falls. Frulact Group of Portugal is expected to start constructing in May its first U.S. fruit processing plant at Rupert, investing $40 million.

“We need to grow around a well-educated and motivated work force,” Otter said.

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mendiola MARK
MENDIOLA

 
Reports

Idaho’s natural beauty and the inherent decency of its people can mask serious problems confronting the state, Idaho Business for Education’s president and chief executive officer says, comparing the Gem State to an old, stately, beautiful mansion whose foundation is rotting, cracking and direly in need of repair.

Addressing a recent City Club of Idaho Falls luncheon, Rod Gramer said unless its owners get to work and invest money, the foundation will crumble and the damage will worsen.

Answering an audience question, Gramer — a veteran Idaho Statesman and KTVB news professional who recently returned to Boise after working in Oregon and Florida — said it has been estimated that it will take $82 million to $120 million to replace the education funding lost in Idaho the past six years.

He commended legislators for this year pumping $32 million in new dollars for education, stressing that that money should be viewed as an investment, not an expense, emphasizing the dots need to be connected between education and Idaho’s economy. He called it “the best public school budget in seven years.”

Gramer said simple formulas mean a weak education system, plus a weak economy, equal a poor quality of life as opposed to a strong education system and a strong economy combining to boost Idaho’s standard of living.

“Fate won’t determine this. The people of Idaho must decide. The choice is ours,” he said, warning that like the Roman Emperor Nero, Idahoans can fiddle while metaphorical Idaho burns.

Gramer noted that in 2012, Idaho ranked 50th among the states in per capita wages. Idaho was No. 1 in the nation for the percentage of hourly workers — 7.7 percent — who made the state’s minimum wage of $7.25 or less in 2012. Nationally, 4.7 percent made minimum wage or less in 2012.

The Idaho Department of Labor reported that more young people are leaving the state than moving to the state.

“These are statistics we ignore at our own peril,” Gramer said. Rebuilding starts with education, which is “a passport to the American dream.” Government for and by the people cannot and will not succeed without an educated populace who can make wise decisions, he added.

Only 39 percent of Idahoans have earned college degrees or have post-secondary trade certification, but 61 percent have some college, high school or less. That level of education was fine in the past for most of Idaho’s history when mining, logging, farming and other such jobs sufficed, but that is not now the case, Gramer said, noting manual work such as driving trucks or working in a body shop now requires computer training.

When the J.R. Simplot Co.’s new 380,000-square-foot Caldwell potato processing plant opens in April, its robotics will make it the most state-of-the-art processing plant of its kind in the world, but only 250 will be needed to operate it. Its existing plants in Nampa, Caldwell and Aberdeen will be shut down with a net loss of 800 jobs.

“The shift in the job market is all over the United States, causing a dramatic effect on the economy and the lives of people,” Gramer said.

The nation’s income gap, education gap and jobs gap are all related. Those with only high school diplomas have lost their earning power. During and since the Great Recession, those with college degrees gained 187,000 jobs, he pointed out.

It has been estimated that 60 percent of jobs by 2018 will need employees with post-secondary education or advanced training. Meanwhile, Idaho has the worst “go on” to college record in the nation for graduating high school seniors — only about 46 percent — who enroll in two- or four-year colleges or universities.

Gramer advocated that a professional study be conducted to gauge the actual “go-on” percentage, including church missionaries who later attend college after returning to Idaho.

More than 80 percent of Idaho freshmen in college need remedial math and English, and 25 percent of four-year college students need remediation. A third of Idaho fourth graders cannot read at their grade levels.

The Idaho Governor’s Task Force for Improving Education recommends raising the bar for math and English in the state’s public school system via core standards. Gramer estimated it will cost several hundred million dollars to implement the task force’s recommendations, but it’s the best opportunity for moving the state forward.

Gramer praised the attitude of Native American chiefs who believe the present generation has a responsibility for the welfare and well-being for their descendents seven generations out. The founding fathers of Idaho 125 years ago or nearly seven generations ago also required a thorough and uniform education system for all of the state’s children, he observed.

“They were willing to sacrifice, invest and work,” he said, stressing that strengthening the education system builds the economy. “It’s now up to us to emulate their dedication.”

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A large truck hauls phosphate ore from an Agrium open pit mine on the Caribou/Targhee National Forest. (photo/Mark Mendiola

 

mendiola MARK
MENDIOLA

 
Reports

An earlier version of this column appeared in Green Markets

The U.S. Bureau of Land Management has approved the transfer of operating rights for the Dry Ridge Phosphate Project in southeastern Idaho from Solvoy USA Inc. to Fertoz USA LLC, a wholly-owned subsidiary of Fertoz Ltd., an Australian company with phosphate operations in Australia and Canada.

Fertoz joins Canadian companies Agrium, based at Calgary, Alberta, and Stonegate Agricom, based at Toronto, Ontario, as foreign companies hoping to realize hefty profits by developing phosphate mines in southeastern Idaho, but at great up-front capital investments.

Agrium has operated Conda processing plant for decades as Nu-West Industries near Soda Springs and runs the North Rasmussen Ridge Mine. Stonegate Agricom is developing the Paris Hills underground phosphate mine near Bloomington and Paris.

In December, Fertoz acquired an option to explore and acquire up to 100 percent of the Dry Ridge lease on the phosphate-rich Caribou/Targhee National Forest, expanding into the United States as it embarks on an ambitious expansion.

It has engaged World Industrial Minerals as a consultant to provide additional geological services to develop an exploration program in alignment with BLM requirements. Cascade Earth Sciences also has been contracted to start environmental permitting as required by the BLM. CES has teamed with Sound Ecological Endeavours and Sundance Consulting to expedite the biological and archaeological processes, respectively.

The approval process is expected to take 12 to 15 months. Fertoz Managing Director Les Szonyi said the BLM’s approval of transferring Dry Ridge operating rights will allow Fertoz to accelerate the permit and exploration approval process and begin drilling at the end of 2015 in Idaho.

Exploration in the United States requires significant third party input and reports before drilling can be approved, he noted, adding he expects Fertoz will submit in the next few months an exploration application, which outlines the proposed exploration plan. An environmental assessment of the project’s impact also must be submitted.

“This will require approval from both the BLM and the U.S. Forest Service. Our process is on track,” Szonyi told me.

Jeff Cundick, BLM’s minerals branch chief at its Pocatello field office, said the BLM’s state office in Boise approved assigning the Dry Ridge operating rights from Rhodia to Fertoz on Jan. 30, but Rhodia will maintain or keep the existing phosphate lease. The Solvay group acquired Rhodia, the chemicals division of Rhone-Poulenc, and its assets, including the 57-year-old Dry Ridge lease, in September 2011.

Fertoz officials indicated to the BLM that they most likely will apply for a Dry Ridge exploration and drilling permit in the spring, Cundick said, noting the BLM office in Boise is in charge of leasing and issuing permits while the Pocatello BLM office makes sure all federal regulations and requirements are met, including the Clean Water Act and the National Forest Management Act.

“I imagine the process will take several months,” Cundick told me. The BLM will do an environmental assessment under the National Environmental Policy Act (NEPA) and work closely with the U.S. Forest Service, especially its biologists and cultural resource specialists. Safeguards will be formulated and Fertoz’ reclamation plan assessed, Cundick said.

Meanwhile, Fertoz will continue to focus on bulk samples from Wapiti East and exploring operations at its other phosphate operations in British Columbia — Marten, Barnes Lake and Crows Nest, known as the Fernie Group.

The British Columbia Ministry of Energy and Mines has approved a permit to allow Fertoz to extract a surface bulk sample from Wapiti East of up to 7,500 metric tons of phosphate rock during the Canadian winter. Fertoz recently announced it has secured the Marten Project, an underground exploration phosphate mine.

Southeastern Idaho is within an area designated by the U.S. Geological Survey as a “Known Phosphate Leasing Area” or KPLA, which contains four operating phosphate mines and a number of smaller advanced exploration/development projects, some of which are directly along the same sedimentary horizon as Dry Ridge.

Fertoz’ Dry Ridge property covers 518 acres west of the J.R. Simplot Co.’s Smoky Canyon phosphate mine near the Idaho/Wyoming border. It lies south of Agrium Inc.’s Husky Unit 1 and North Dry Ridge leases under exploration and directly north of Agrium’s Husky Unit 2.

Agrium, Simplot and Monsanto all have processing plants in the region and are responsible for processing up to 14 percent of U.S. phosphate ore. They have operating mines within 20 to 90 miles from their processing plants where rock is transported by truck and slurry pipeline. The Soda Springs processing plants of Agrium and Monsanto are within 22 miles of the Dry Ridge property.

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Idaho Gov. Butch Otter converses with Dakota Bates, who chairs the ISU College Republicans, as Mike Webster, Otter’s eastern Idaho field representative, listens. (photo/Mark Mendiola)

 

mendiola MARK
MENDIOLA

 
Reports

Top elected Idaho Republicans did not fritter away their time on the Friday afternoon before the evening Bannock County Republican Lincoln-Reagan Banquet Feb. 21 at Pocatello’s Clarion Inn, which drew about 250 of the party’s faithful, including the state’s GOP elite from Boise and Washington.

Idaho Gov. C.L. “Butch” Otter and Lt. Gov. Brad Little discussed education issues at Idaho State University shortly after U.S. Sen. Mike Crapo warned business people at a Mystique Performing Arts and Event Center lunch in Chubbuck of the nation’s worsening fiscal crisis.

Questions about the controversial “guns-on-campus” bill wending its way through the Legislature in Boise were among several questions fielded by Otter and Little in the ISU Student Union Building ballroom. On the previous Thursday, they spent time with Dr. Arthur C. Vailas, Idaho State University’s president.

Vailas told them he had been notified by the Nuclear Regulatory Commission that it does not allow nuclear research and development on campuses where guns are allowed because of security concerns. “I had never heard that,” Otter said, noting about 60 percent of ISU’s R&D is nuclear-related.

Another complication if guns are allowed despite the opposition of the state’s university presidents and law enforcement officials is ISU’s Meridian campus is shared with a high school, and state law forbids guns to be carried at high schools, the governor said.

Asked if he would sign a “guns-on-campus” measure if it is passed by legislators, Otter says he never signals his intentions as lawmakers finalize a bill’s provisions, mentioning he has been a lifetime member of the National Rifle Association.

Little defended the controversial Common Core curriculum being implemented by school districts nationwide that is supported by governors and superintendents. While the U.S. Department of Education puts money into it, it’s really driven by the states, the lieutenant governor said.

In November 2010, the Idaho State Board of Education adopted Common Core standards. In January 2011, the Idaho House and Senate Education Committees gave final approval to adopting Idaho Core Standards in mathematics and English. Some Idaho school districts have implemented those standards, Little noted.

Many Idahoans are concerned that Common Core is part of a national curriculum and the federal government is developing a massive data base on each student in the United States, Little said, noting his father and grandfather had to meet standards to graduate from high school.

Otter noted that of Idaho’s $2.85 billion budget, 68 percent of it goes toward K-12 programs. The State Board of Education has set a goal that 60 percent of Idahoans 24 to 35 will get a degree or certification by 2020.

Right now, Idaho boasts a high school graduation rate that is relatively high at 88-89 percent, but only 38 percent of high school graduates go onto college and even fewer graduate, making Idaho’s college graduation one of the nation’s lowest.

“Work force development is the key to economic growth,” Otter said, commenting that when he became governor in 2007, business organizations would complain they could not hire Idaho students out of high school because of their poor English and math skills.

A surge in Idaho’s community college system has helped reverse that trend at significantly reduced costs per credit hour, and high school students now can buttress their higher education by taking college courses, Otter said.

Since its inception in 2009, the College of Western Idaho in Nampa has become the fastest growing community college in the history of the nation, Otter said. As of the fall of 2013, CWI had 9,200 full-time students and, as of Fiscal 2013, 10,660 non-credit students. Its Fiscal 2014 budget totals nearly $54 million. In 2007, the Albertson Foundation committed $10 million to help start the college.

Otter defended the troubled Idaho Education Network, which recently was given $6.6 million by the Joint Finance-Appropriations Committee to cover the federal government’s share of funding the broadband network. A lawsuit alleges the state awarded the IEN contract illegally.

The governor noted that 196 Idaho high schools and 89,000 high school students are hooked up to the network, giving them access to courses they otherwise may not be able to take. Otter said he hopes the network also can be extended to middle and grade schools.

“We compete in the real world,” he said.

Before Otter and Little met with constituents at ISU, Crapo explained the monumental fiscal challenges confronting Congress in Washington when he addressed a packed house at the Mystique. It’s generally agreed the debt crisis is seriously putting the American dream on the line, he said.

At the start of the Obama administration, the national debt stood at $10-12 trillion, but it has now swollen to $17 trillion and continues to grow unabated. Crapo warned that Medicaid, Medicare and Social Security all are “screaming toward insolvency” and direly need reforms.

“Congress has a 100 percent perfect record of breaking every budget,” he said.

An economist who testified to a congressional committee said America now faces its worst financial/economic crisis ever with the nation staring at annual budget deficits of $500 billion to $1 trillion for the next decade. Crapo sits on powerful Senate banking and finance committees.

“We’re getting closer and closer to collapse,” Crapo said, warning if the government does not deal with the crisis, the bond market will. “We’re precisely close to when the bond markets will step in and cause it to collapse.”

Frustrated with Congress, Americans are fed up with gridlock, partisanship and personal attacks, but are discouraged and feel they cannot make a difference, Crapo said, urging his audience to get informed and engaged.

Those in attendance robustly applauded when Crapo said he has co-sponsored legislation that requires every bill in Congress to include a description of where the U.S. Constitution authorizes it to be introduced.

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Several Idahoans who phoned into Idaho U.S. Sen. Mike Crapo’s tele-town hall meeting Wednesday night, Feb. 12, expressed concerns that President Barack Obama is abusing executive orders, creating a constitutional crisis that might require impeachment proceedings to be brought against the nation’s chief executive.

They said they fear Obama is directly violating the U.S. Constitution’s separation of powers between the government’s executive, legislative and judicial branches by arbitrarily circumventing Congress and ignoring or even contradicting enacted laws with his executive orders.

During the hour-long town hall session, Crapo’s constituents also asked about missing Idaho POW Bowe Bergdahl, the Patient Protection and Affordable Care Act or “Obamacare,” the Keystone XL Pipeline, the U.S. Farm Bill, the minimum wage, environmental protection, broadening the tax base and reforming the tax code.

Crapo said at this point a majority of members in the U.S. House and Senate have not concluded that impeachment of the president would be a proper step.

The U.S. Constitution allows for presidents, vice presidents, federal judges and civil officers to be removed from office via impeachment if they have committed “high crimes and misdemeanors,” including criminal actions or serious misuse or abuse of office.

In American history, the U.S. House of Representatives initiated impeachment proceedings against only two U.S. presidents — Andrew Johnson and Bill Clinton. The Senate acquitted Johnson by one vote and dismissed charges against Clinton.

Crapo said he is increasingly hearing the impeachment issue raised “as the president steps outside the law and whether that amounts to high crimes and misdemeanors.” While Congress now is unlikely to impeach Obama, the Idaho Republican said he will not say that will not happen.

Crapo was among 45 Senate Republicans to file an amicus brief with the U.S. Supreme Court saying it was illegal for Obama to make “recess appointments” of three members to the National Labor Relations Board and Richard Cordray to head the Consumer Financial Protection Bureau (CFPB) when the Senate was still in pro forma session and without its advice and consent.

Crapo said Obama was literally in violation of the Constitution by taking that action. “I don’t think he accidentally did this.”

Three federal appeals courts have ruled those appointments were improper. The Supreme Court heard the landmark case in mid-January. Its decision is expected in late June.

Last November, Senate Majority Leader Harry Reid, D-Nev., pulled the trigger on the so-called “nuclear option,” making a controversial, historic Senate rule change that eliminates filibusters blocking presidential nominees and allows a simple majority vote, rather than 60 votes, to confirm nominees, limiting the power of minority Republicans.

“I think America should be furious at this,” Crapo said, noting one of the disputed nominees was confirmed in the Senate after the rule change was made, referring to Cordray whom he said was illegally appointed. “I think Americans should be outraged at that.”

Crapo emphasized that Americans need to be much more aware of privacy as a major issue, criticizing indiscriminate spying by the government against law-abiding citizens and collecting data on every phone call made by every American.

While much has been reported about the National Security Agency’s spying activities and the Internal Revenue Service targeting conservative political and religious groups, Crapo said the new CFPB created under the Dodd-Frank Wall Street Reform and Consumer Protection Act is collecting credit card, banking transaction, mortgage lending, student loan and Social Security information, including some 90 different factors about each American.

Crapo, ranking Republican on the Senate Banking, Housing and Urban Affairs Committee, noted he has called for the General Accounting Office to audit the CFPB and has repeatedly spoken against its broad authority over financial institutions.

The bureau is funded by the Federal Reserve, not congressional appropriations. Crapo and other Republicans said it should be led by a bipartisan board, not a single director.

The collapse of the housing system, perhaps the most significant sector of the U.S. economy, has been a major contributor to the nation’s economic decline the past five or six years, Crapo said, calling for major reforms.

Advocating that they be restructured and ultimately eliminated, he noted that Fannie Mae and Freddie Mac, companies which received a $187 billion federal bailout and went into receivership, now manage virtually all mortgages.

Crapo, a member of the Senate Finance Committee, criticized Obama for delaying the Obamacare employer mandate again until 2015 — after November’s mid-term congressional elections. He said the latest delay creates more chaos for Americans, business owners and the U.S. economy.

If the White House continues unilateral delays, it should delay the entire law, especially the individual mandate, Crapo said, agreeing with a caller that it should be repealed in its entirety.

The disastrous rollout of Obamacare, spiraling federal deficits and exploding oppressive regulations underscore that elections have consequences, Crapo said, adding he senses a momentum is building nationwide to reverse the burgeoning growth of government, taxes and spending. November’s congressional elections will be crucial in countering that, he said.

Endorsing the need for a Balanced Budget Amendment, Crapo criticized the House and Senate for extending and increasing the nation’s debt ceiling without any needed fiscal reforms or conditions, calling it very discouraging and frustrating. He and fellow Republican Sen. Jim Risch voted against doing so.

“We recognize if we continue to simply go down the path of adding to debt without solving our fiscal problems, we lose our position globally,” Crapo said, criticizing Democrats for not recognizing the threat the nation’s crushing mountain of debt poses and believing they can spend themselves into prosperity.

“The Congressional Budget Office reaffirms, not withstanding claims by some economists, our country still faces a serious debt crisis. That should be a sober reminder to all Americans of the enormous task ahead of us to get this under control.”

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Bank of Idaho President and CEO Park Price strongly encourages eastern Idaho’s three economic development organizations – Bannock Development Corp., Bingham Economic Development Corp. and Grow Idaho Falls Inc. – to effectively flex their collective clout by merging into a single regional force.

Speaking at a recent Rotary Club of Pocatello luncheon, Price noted the three organizations have been discussing the possibility of consolidating into a single entity, which he said would pay dividends for years to come throughout the region.

The Idaho Falls bank executive – who holds an economics degree from Dartmouth, ran a successful Pocatello car dealership for many years and has been engaged in economic development for more than 30 years – noted the Pocatello/Idaho Falls region boasts a population of 250,000 and a work force of nearly 130,000, the second largest in Idaho behind Boise.

Price praised successful economic development efforts in the Magic Valley where communities and counties in the Twin Falls area cooperate as a cohesive unit. The Southern Idaho Economic Development Organization (SIEDO) has wracked up several impressive achievements, including $800 million in industrial projects built or announced since November 2012, creating more than 1,200 jobs.

Those projects include Chobani’s massive $100 million yogurt plant near Twin Falls, Glanbia’s $15 million cheese innovation center, Frulact Group’s $40 million fruit processing plant in Rupert adding 100 jobs, a new $160 million Clif Bar plant employing 250, McCain Foods’ expansion adding 150 jobs in Burley, Monsanto’s Wheat Technology Innovation Center in Filer with 30 jobs, Gossner Cheese’s $20 million investment in a Mini-Cassia plant, etc., etc.

“Major private investors in Bannock Development and Grow Idaho Falls with whom I’ve spoken are in favor of a regional approach,” Price said, noting the Salt Lake Valley and areas around Bozeman, Billings and Missoula, Mont., pose the greatest competition to eastern Idaho for jobs that pay living wages. “The competition is no longer other communities in Idaho.”

Price warned the trend of companies incorporating technology in all their processes and emphasizing automation to remain competitive does not bode well for low- or semi-skilled workers, whom he said are part of the long term unemployed.

He mentioned that in September he toured the J.R. Simplot Co.’s new 380,000 square foot plant in Caldwell, which has brought about the closure of Simplot plants in Aberdeen, Caldwell and Nampa.

“The three older plants employed about 1200. The new plant will employ just 265. The plant is a fine example of technological efficiency,” Price said, adding there are not fork lift operators, sorters or other laborers employed there, only employees who operate computers or maintain equipment.

Park Price
Bank of Idaho President and CEO Park Price gestures as he makes a point with Pocatello Rotarians Dick Sagness and Bill Stratton. (photo/Mark Mendiola)

 

“The downside to all this automation … is that robots and computers don’t buy anything. When 70 percent of our GDP is driven by the consumer, if we continue on this road too long, our economy will not be able to grow much beyond population growth, which is running between 1 percent and 2 percent.”

Since the depths of the recession in 2008, 97 percent of the jobs lost in Idaho and Idaho Falls have been recovered; 91 percent in Pocatello. U.S. unemployment stands at 7.3 percent, but Idaho’s rate is 6.1 percent and Pocatello’s rate is 5.6 percent, Price said, defining the unemployment problem as more structural than cyclical, which he blamed on declining skills of the American work force.

“The baby boomers are starting to retire in greater numbers. They take with them years of experience and skills that are difficult to replace,” he said.

While the Gen X and Millennial generations have many talented, productive workers, they generally don’t have the educational attainment that their counterparts in other countries have, especially those in Asia, said Price, who sits on the Idaho Business for Education’s board of directors.

The IBE and leaders of all post secondary educational institutions in the state support the Idaho State Board of Education’s goal for 60 percent of all of the state’s young people between 24 and 34 to have some level of post-secondary education by 2020. Now, only 30 percent in that age bracket do.

“It will be very hard to get a job without at least a technical or professional certification or an associate’s degree,” Price said, noting the top three job sectors in Idaho and Pocatello are government, health care and retail trade.

“Retail is the only sector where you can get a job without some sort of post-secondary education. Unfortunately that sector pays the least. In Bannock County the average earnings per job is $41,518. For retail, the average job pays
$27,254,” he said.

The combined labor force in Bannock, Bingham and Bonneville counties is down about 600 workers to 129,891, underscoring the need for a regional economic development effort, he said, praising the technical training at Idaho State University and the Eastern Idaho Technical College.

“I believe Idaho’s workers are willing to enroll in programs that will provide them with the skills if we can attract the employers,” Price said.

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A few years ago, the Heinz frozen food plant in Pocatello employed more than 800 who worked its packaging lines, eclipsing Union Pacific Railroad, the J.R. Simplot Co. and ON Semiconductor as the Gate City’s largest private employer.

Heinz’ recent announcement that it would close its imposing factory on Pocatello’s north end near the Quinn Road overpass and terminate its remaining 410 employees within five to eight months stunned the community, sending shock waves throughout Bannock County.

That bad news came on heels of the shutdown of the $700 million Hoku polysilicon plant in Pocatello. A bankruptcy judge recently blocked that plant’s sale to JH Kelly Inc., the plant’s Longview, Wash.-based general contractor, which bid $5.27 million for the abandoned complex and says it is still owed $25 million for its work on the project.

The entire Hoku plant will be re-auctioned onsite on Dec. 17. Its fair market value has been set at between $6.25 million and $35 million. The plant’s owner has filed for Chapter 7 bankruptcy and owes an estimated $1 billion to creditors. Once operating, the plant was to initially employ 200 and eventually boost its payroll to 400 — or equivalent to the number now employed at the Heinz plant on the opposite side of town.

That Pocatello plant is one of three Heinz plants to be closed by the summer of 2014. The others are at Ontario, Canada, where 740 work, and Florence, S.C., where 200 are employed. Heinz plans to add 470 employees at existing plants in California, Iowa, Ohio and Canada, bringing its total work force in the U.S. and Canada to 6,800 hourly and salaried workers.

While displaced Pocatello Heinz employees will get severance benefits, outplacement services and other support, that’s little comfort to some who have worked at the plant for decades, stemming back to when it was owned by Kraft and Ore-Ida Foods. The unexpected shutdown is devastating for many of them and a major blow to Pocatello’s economy.

Kraft Foods built its first Pocatello cheese factory and warehouse along the Portneuf River in 1924, well east of Simplot’s existing phosphate fertilizer plant. By 1955, production at Kraft’s three-story structure on Kraft Road began to wind down, not far from Great Western Malting’s existing plant, which is east of the Hoku plant.

In 1967, Kraft Inc. started constructing its 450,000-square-foot plant where Heinz now operates and abandoned its old site along Kraft Road. In April 1989, 500 were working at the processed cheese plant when Kraft announced it would move operations to Tulare, Calif., after operating in the Gate City for some 65 years. Kraft had hoped 80 percent of its Pocatello workers would move to California, but only about 10 percent opted to do so, preferring Southeast Idaho’s much lower cost of living and other amenities.

By May 1989, only a month after Kraft’s bombshell announcement, it was disclosed that Boise-based Ore-Ida Foods Inc. had taken an option to buy the Kraft property to process low-calorie entrees and frozen potato products.

To their credit, Idaho Gov. Cecil Andrus and Commerce Director Jim Hawkins hustled to dispatch a rapid response team to Pocatello to help soften Kraft’s gut punch to the greater Pocatello area and quickly fill the food factory.

By the end of March 1990, 150 Kraft workers were terminated after 50 laborers had been idled the previous February, leaving fewer than 50 distribution personnel before Ore-Ida took over the plant. Weight Watchers low calorie meals were among the main products churned out after Ore-Ida took over the plant.

Famous for its Tater Tots, the Ore-Ida brand was acquired by the H.J. Heinz Co. in 1965. Its division headquarters was in Boise until 1998-99 when a new frozen foods division was created in Pittsburgh, Pa. At that time, 235 of the 320 employees of Ore-Ida’s Boise HQ lost their jobs and 150 Weight Watchers plant workers in Pocatello were cut.

There have been telltale signs in recent years that production at the Pocatello Heinz plant has not been kept at full capacity as a steady drumbeat of layoffs sliced and diced employment by 50 percent.

In September 2009, 65 Heinz employees were let go. Last February, 80 workers were terminated as Heinz ended its TGI Fridays frozen meals line. The number of employees has plummeted from an 800 peak to its 400 level now. It’s been estimated that the Heinz plant shutdown will adversely impact another 200 people indirectly, worsening Pocatello’s unemployment rate.

In August, the city’s jobless rate stood at 7.8 percent, the highest of Idaho’s 11 largest cities. The Idaho Department of Labor on Friday, Nov. 22, disclosed that the Gate City’s unemployment rate declined from 7.7 percent in September to 6.9 percent in October.

Heinz
Heinz Factory Manager Kevin Trussel stands outside the Pocatello frozen food plant in happier days.

 

Needless to say, finding a new occupant for the Pocatello Heinz plant needs to be addressed with urgency as a top priority by Idaho Gov. C.L. “Butch” Otter and Commerce Director Jeff Sayer as one of the state’s largest metropolitan areas faces a major economic setback.

That could prove daunting for the Idaho Department of Commerce, which has lost very capable personnel via recent terminations. Well-respected former Bannock Development Corp. Executive Director Gynii Gilliam recently resigned as Commerce’s chief economic development officer after the department’s tourism and international business administrators were removed.

Pocatello Mayor Brian Blad and Bannock Development Corp. officials must also go all out in filling the abandoned Heinz plant, copying pages from the playbook of the Southern Idaho Economic Development Organization in Magic Valley.

SIEDO has wracked up back-to-back successes by landing Chobani’s world’s largest $100 million yogurt processing plant, Glanbia Foods’ $15 million cheese innovation center and corporate headquarters, an Old Hickory Buildings manufacturing plant, LMS Defense Inc. corporate headquarters, etc., etc.

It could be an exercise in futility to try to persuade Heinz corporate executives to reconsider their decision to close their plant in Pocatello, which essentially is a fait accompli. If attempted, the success of such an effort would hinge on how well area leaders have developed trust and a close working relationship with Heinz officials over the years.

Last February, the Heinz corporation was acquired by an investment consortium consisting of 3G Capital and Warren Buffet’s Berkshire Hathaway for $23.3 billion. You can bet numbers were carefully crunched before it was concluded the three Heinz plants needed to be shuttered.

At the end of October, Heinz suffered a significant potential loss of revenue when McDonald’s severed ties with the corporation after a 40-year partnership.

There are distinct selling points in marketing the Heinz plant and property to food processors — state-of-the-art refrigeration technology, strategic rail access and close proximity to where Interstates 86 and 15 intersect. It was recognized in 2011 as the most productive plant in the entire Heinz organization. In 2009, the Pocatello plant was named Heinz factory of the year.

Indeed, shutdown of the Heinz plant will be a major blow to Pocatello’s economy, which has been on the ropes, but it’s not a fatal knockout. The Gate City has taken a pounding in past decades with the closure of the Bucyrus-Erie manufacturing complex, Garrett Freightlines, FMC’s elemental phosphorus plant, Ballard Medical, etc.

Getting Pocatello’s economy off the canvas demands urgency and resourcefulness to ensure it rebounds in the future and maintains the resilience it has enjoyed in the past.

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The rule of law is the basis of freedom and security in the United States, binds Americans together as a society and distinguishes the U.S. from many nations, Idaho Attorney General Lawrence Wasden says.

It also is the guideline he says he uses as Idaho’s top law enforcer when he must render difficult decisions on controversial legal issues such as Idaho nullifying the Patient Protection and Affordable Care Act (“Obamacare”), managing federal lands, funding public education or regulating the influx of nuclear spent fuel.

Elected Idaho’s 32nd attorney general in 2002, Wasden is the longest serving attorney general in the state’s history and was president of the National Association of Attorneys General from 2006-2007. He earned a political science degree from Brigham Young University and a law degree from the University of Idaho.

wasden
Idaho Attorney General Lawrence Wasden, center, converses with attorney Timothy Hopkins, right, and Areva Vice President Robert Poyser in Idaho Falls. (photo/Mark Mendiola)

 

“Sometimes public service can be a challenging experience,” Wasden told City Club of Idaho Falls members before answering questions during a Q&A session following a recent luncheon, noting his office processes 5,000 to 6,000 legal matters at any given moment.

Wasden was asked about the Idaho Tax Commission’s ruling that same-sex couples recognized as legally married in other states must recalculate their Internal Revenue Service filings before filing their state returns. Idaho is among 35 states that forbid same-sex unions following a constitutional amendment approved in 2006 by voters.

The IRS has ruled that same-sex couples will be recognized as married for federal tax purposes. Wasden said he would defend Idaho’s constitutional amendment, adding he was disappointed and critical of his counterpart in California who refused to represent citizens in that state who had voted against recognizing same-sex marriages.

Wasden was one of the nation’s first attorneys general to file a lawsuit challenging the federal health care law’s constitutionality, but when the Idaho Legislature tried to nullify the federal law by enacting a state statute, he told the legislators what they were trying to do was unconstitutional.

“Whether I agree or disagree is not relevant,” Wasden said, mentioning he was accused of being “secretly pro-Obamacare” by contradicting the state’s lawmakers. “Congress took its vote.”

Article 1, Section 8 of the U.S. Constitution grants Congress the power to regulate commerce, but Wasden said it was his view that Congress was attempting to regulate non-commerce with the health care legislation.

Five Supreme Court justices agreed that Congress could not compel someone to engage in commerce, but decided that the federal health care law was legal under Congress’ right to exercise its taxing power.

“I disagree with the chief justice of the Supreme Court, but his title trumps mine,” Wasden said. “Whether I agree or disagree, I cannot ignore it. The rule of law really is a matter I hold dear to my heart.”

When asked how much Idaho spent challenging the Affordable Care Act, Wasden estimated the cost was between $5,000 and $6,000, with Idaho sharing legal expenses with 25 other states.

A certain event that started at Fort Sumter, S.C., in 1861 and concluded at Appomattox, Va., in 1865 — i.e. the U.S. Civil War — settled the matter, Wasden said, stressing the U.S. Supreme Court has ruled that governors and legislatures cannot nullify federal law.

“Six hundred and 80 thousand Americans lost their lives to answer the question whether states have the authority to nullify federal law,” he said.

In 1954, the U.S. Supreme Court unanimously ruled in the landmark Brown v. Board of Education case that state laws establishing separate public schools for black and white students was unconstitutional. As a result, racial segregation was ruled a violation of the equal protection clause of the U.S. Constitution’s 14th Amendment.

When an Arkansas governor called out his state’s National Guard to block nine black students from entering a high school in 1957, U.S. President Dwight Eisenhower — “a Republican with certain military experience” — deployed the 101st Airborne Division from Fort Campbell, Ky., to Arkansas and federalized the state’s National Guard in response.

When asked if the Idaho Legislature could be violating the state constitution by under funding public education, Wasden said the court and Legislature ultimately must decide whether the funding mechanism is sufficient.

While states do not own or have the ability to take back federal lands, Wasden said he thinks the federal government violated its trusts by failing to provide Payment in Lieu of Taxes (PILT) funding to the states.

Asked about the possibility of Idaho renegotiating Gov. Phil Batt’s 1995 agreement with the U.S. Department of Energy, which settled a lawsuit filed by the state to prevent spent nuclear fuel shipments to the Idaho National Laboratory for storage, Wasden noted that DOE had made broken promises many times to Idaho.

The agreement gave Idaho the ability to hold the DOE secretary in contempt and impose fines. Complimenting DOE for its accomplishments, Wasden noted a deadline was missed last December and an influx of waste had to be stopped. The Batt agreement is important for maintaining trust, he said.

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Idaho Department of Commerce Director Jeff Sayer sees the state potentially taking the lead in converting military drone technology into commercial unmanned aircraft applications, but he worries the Idaho National Laboratory’s lucrative nuclear research and development projects are at risk.

During a recent presentation to the Rotary Club of Pocatello, Sayer noted Idaho has the 46th largest economy in the nation and essentially zero R&D funding, putting it at a significant disadvantage with competitive, wealthier states.

The state’s three universities and industry are cooperating to concentrate on work force development, which is difficult to accomplish but crucial for Idaho’s economy, said Sayer, who has headed the state’s commerce department since October 2011.

“We’ve got to find a way to train people industries need. It’s the single most important thing to do to move the state forward. We’re coming together at an unprecedented level,” Sayer said. “There’s going to be a shortage in the nation and the world of a qualified work force. That’s not lost on Idaho.”

Idaho can capitalize on its existing assets to develop unmanned aircraft that can be used in agriculture, wildlife management, transportation and many other fields, Sayer said. The INL has the second largest authorized flying area for drones. The U.S. Department of Energy (DOE) considers INL its leading test site for unmanned aircraft.

Idaho can move faster than any state in developing an unmanned aircraft industry and still protect citizen privacy rights, Sayer said, mentioning there are more than 100 companies engaged in the state’s robust firearms industry.

Since last year, Sayer has chaired the Idaho Leadership in Nuclear Energy (LINE) Commission forged by Gov. C.L. “Butch” Otter to support and protect the INL and the state’s nuclear energy industry. In 1995, Idaho, the U.S. Navy and DOE reached an agreement settling a lawsuit filed by the state to prevent shipment of spent nuclear fuel to the INL for storage.

Otter “knows the political risks stepping into this arena,” Sayer said, praising his foresight in initiating the LINE Commission. “It was an environmental issue, but now it is an economic issue. We’re actually getting involved in the nuclear industry to make sure what happens comes to Idaho. … Things have changed in 30 years.”

As of 2010, the INL accounted for 24,000 jobs and a $3.5 billion economic impact. “None of us in eastern Idaho wants to see that go away,” he said.

Sayer said the Idaho Cleanup Project, administered by CH2M-WG Idaho, is one of the most successful cleanup projects in the nation. From the 1950s to the 1970s, waste management at the INL site consisted of dumping, isolating, diluting and minimizing exposure, he said. Now, spent fuel onsite is carefully managed by using top technology, he said.

sayer
Greg Gunter, right, owner of Rave Communications, converses with Idaho Commerce Director Jeff Sayer following a Rotary luncheon.

 

Based on the Center for Advanced Energy Studies model, Idaho has invited regional governors to partner in addressing spent nuclear fuel issues, Sayer said. CAES is an ongoing research and education partnership involving the INL, Boise State University, Idaho State University and the University of Idaho. Its $17 million, 55,000 square foot building is in Idaho Falls.

“We cannot proceed from an energy standpoint without embracing nuclear,” Sayer said, stressing nuclear energy does not create carbon emissions, and other states are aggressively pursuing it. “This is going to be and has to be part of our future.”

Utilities are paying the federal government $1.2 billion annually to manage spent nuclear fuel stored at various sites. “The bottom line is other states will help (with storage), but they want the research to go with it,” Sayer said, emphasizing Idaho has nuclear energy expertise lacking in other states.

Addressing the state’s economic development efforts, Sayer said, “There are a lot of positive things happening. The glass is not half full. It’s overflowing. We’re seeing growth across a number of sectors.” Many projects under the radar are “coming to the top and starting to pop.”

Chobani’s construction of the world’s largest yogurt plant near Twin Falls has spawned a ripple effect and renewed sense of momentum in the Magic Valley, Sayer said. Three other food processing projects creating 900 to 1,000 jobs also have targeted the region.

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