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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 Mendiola

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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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Idaho Mendiola

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Pocatello companies were hard hit by the nationwide recession, and the Gate City is taking longer than Idaho in reaching pre-recession employment levels, an Idaho State University economics professor told a large crowd attending Bannock Development Corporation’s 22nd annual economic symposium.

Dr. C. Scott Benson and Idaho Lt. Gov. Brad Little gave the economic and state keynote addresses, respectively, on Monday, Sept. 9, at the impressive ISU Stephens Performing Arts Center.

An ISU professor for more than 20 years, Benson has been preparing legislative economic forecasts about the state’s general fund revenue for nearly 30 years. He also has been preparing Idaho personal income forecasts for the Idaho Tax Commission for more than 10 years.

“I would like to come here and tell you that happy days are here again, but you know better than that,” Benson said, calling the economic recovery anemic. He concluded, however, that Idaho, Bannock County and Pocatello should continue to add jobs and see accelerating growth after several harsh years.

In July, Idaho’s seasonally adjusted unemployment rate rose two-tenths to 6.6 percent for the third consecutive monthly increase in the rate, which has risen half a percentage point since April. Total employment dropped for the second month in a row, falling 800 to just above 723,000 – the lowest total employment since October 2012.

The Pocatello Metropolitan Statistical Area’s unemployment rate stood at 6.8 percent in July, down from 7.0 in June and 7.3 percent in July 2012. The city’s personal income grew 2-3 percent in 2012 and is projected to grow 4.5-5.5 percent this year and in 2015, slightly faster than the state’s personal income growth rate.

Benson said Gov. C.L. “Butch” Otter’s goal of generating $60 billion in state personal income could be achieved “hopefully sooner rather than later” in Fiscal 2015.

“Idaho and the Pocatello MSA were harder hit than most states,” Benson said, noting Idaho’s unemployment rate tripled while rates in other states doubled. While the recession was severe, the recovery has been slow. “Manufacturing employment is not a pretty picture.”

Benson estimated 9,000 to 10,000 people are employed in Pocatello’s government sector or up to 25 percent of people working in the city, including those employed at ISU and the state women’s prison.

Education and health services picked up jobs during the recession, he said. Construction, natural resources and mining once represented up to 7 percent of total jobs, but that has declined to 4 percent, Benson said. Leisure and hospitality provide jobs, “but they don’t pay all that well.”

The area retail industry has encountered tough times, he said, estimating Bannock County generates up to $28 million a year in annual sales tax revenue for the state.

Meanwhile, Pocatello area housing prices doubled from 1994 to 2007, followed by a negative trend with declines of 20 percent in purchase costs. “There’s an upturn now as traction is being sustained,” Benson said.

Transportation and manufacturing were huge in Bannock County during the 1970s and 1980s with Bucyrus-Erie, Union Pacific Railroad and Garrett Freightlines going strong and wages were above the national average, he noted.

“Jobs in those sectors have disappeared,” Benson said, pointing out that major employers tied to solar and wind — referring to Hoku and Nordic Windpower — also have left the community. He noted there have been years when Pocatello added 3,000 jobs or lost up to 750 jobs.

“What is the identity of Pocatello? As soon as we know, the much easier it will be to brand and grow,” Benson said. “Pocatello has gone from a town with a university to a university town. That’s a very positive direction.”

Addressing national economic issues, Benson ventured it will be 2015 before interest rates start to rise as the Federal Reserve potentially reduces its monthly purchases of bonds from $45 billion to $30 billion. Its massive bond purchases or “quantitative easing” have stimulated the national economy. Interest rates could rise, however, if inflation exceeds 2 percent, he cautioned.

Despite predictions of doom, federal sequestration budget cuts did not cause the national economy to “go to hell on a sled,” Benson said, adding that states cannot expect federal spending to continue going up. “We’re not heading off some cliff.”

The Patient Protection and Affordable Care Act, or “Obamacare,” could cause health care costs to increase to 20 percent of Gross Domestic Product within 10 years, he said.

Little told those attending the symposium that the burgeoning health care costs and the federal government’s $17 trillion budget deficit are double challenges confronting Idaho. When U.S. House Speaker John Boehner recently visited Boise, he told Idaho Republicans that lawmakers can no longer stand idly by as the nation’s fiscal solvency deteriorates.

The lieutenant governor also stressed the importance of education for economic development. Only 35 percent of Idaho students get college degrees or certificates. The State Board of Education hopes to boost that percentage to 60 percent by 2020, Little said, commending ISU College of Technology’s high graduation and placement rates.

Another challenge for Idaho is the fact it is surrounded by states without sales and income taxes, plus Utah, Wyoming and Montana get significant tax revenue from oil, natural gas and coal developments, making it more difficult for Idaho to compete.

Idaho, however, has one of the best operated tax systems in the nation, which helps attract business and jobs to the state, Little said. It also ranks as one of the five top most solvent states in the union.

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It’s been a tall order. The new Idaho Health Insurance Exchange’s 19 board members were given only 4½ months to launch an enrollment period in compliance with the Patient Protection and Affordable Care Act, commonly known as “Obamacare,” which officially takes effect on Jan. 1, 2014.

Idaho is getting late into the game. Most other states have been working out details for more than two years to comply with the mandate by either joining the federal exchange or creating their own exchanges. Insurance companies argued strongly in favor of an Idaho-based exchange.

All Idahoans 18 and older will have six months to enroll (from Oct. 1, 2013, through March 31, 2014) and choose among 79 plans from five insurance carriers to get mandatory health care insurance. If they don’t enroll, they face penalties. The exchange covers all 44 Idaho counties.

How Idaho would comply with Obamacare turned into one of the most bitterly debated issues in the final weeks of this year’s legislative session, pitting Republicans versus Republicans, causing a delay in the enactment of an Idaho-based exchange. The Legislature adjourned on April 4 after agreeing in March to establish the state-based exchange.

Weeg
Stephen Weeg

When he named the Idaho Health Insurance Exchange board members on April 10, Gov. C.L. “Butch” Otter announced that Stephen Weeg — a veteran health care professional from Pocatello who retired in July 2012 after eight years of directing Health West Inc. — would chair the Gem State’s exchange. The members met for the first time on April 21.

In addition to rigid time constraints, also complicating matters for the exchange board is the fact about 190,000 Idahoans find themselves below the poverty level and 222,000 have no health insurance; the state’s median family income is among the lowest in the United States; the average hourly wage in Idaho in 2012 was 46th in the nation, and the state’s minimum wage is $7.25 an hour — making it difficult for people to afford health care insurance. Idaho has the highest number of per capita minimum wage earners.

Although their travel expenses are reimbursed, the exchange board members do not get paid and do not have a staff.

“Other than that, it’s been a piece of cake,” Weeg remarked to Rotary Club of Pocatello members when he explained the Idaho Health Insurance Exchange on Thursday, Aug. 29, noting only 35 days remained before the enrollment period would start. Weeg spent 40 years in health and human services administrative positions.

“I did try to retire a year ago,” Weeg said, noting he got a call at the end of March from the governor’s office urging him to take on the major challenge of chairing Idaho’s health insurance exchange board. “I asked, ‘Can’t anybody in Boise do this?’”

Weeg emphasized that the exchange board consists of Idahoans engaged in small business, health care and health insurance. Three legislators and the directors of the Idaho Departments of Insurance and Health & Welfare also serve.

Gallatin Public Affairs has been contracted to handle public information, and a web site has been set up at www.yourhealthidaho.org to address questions and concerns of Idahoans. Consumers also may call 855.944.3246.

“Consumer connectors,” including agents, brokers and assisters, will be trained to help residents navigate their health insurance options both online and offline throughout the state. “It really is a market place,” Weeg said. In accordance with Idaho law, only insurance agents and brokers can legally advise in regards to insurance matters.

Weeg noted that a 1.5 percent premium will be applied to insurance sold on the Idaho Health Insurance Exchange as opposed to a 3.5 percent assessment imposed on the federal exchange.

Some Idahoans may be eligible for premium assistance depending on their income, employment status or family size. For example, a family of four making $32,500 or $90,000 a year could qualify for an estimated $950 or $350 a month, respectively, in subsidized assistance. Some may qualify for Medicaid or Children’s Health Insurance Program coverage.

Weeg said he expects the Idaho Department of Insurance will soon announce the cost-per-person rates that will be charged by the five participating insurance carriers — Blue Cross of Idaho, Regence Blue Shield’s BridgeSpan, SelectHealth of Utah, PacificSource and Altius. He said he expects the rates will average $250 per month per individual. Dental and vision coverage will not be included.

Those who do not choose to buy a health insurance plan with basic minimum standards could face penalties in 2014 of either $95 a year or 1 percent of taxable income, whichever is greater.

In 2015, it would be the greater of $325 per adult or 2 percent of taxable income. In 2016, it would be the greater of $695 per adult or 2.5 percent of taxable income. After 2016, the tax penalty would increase annually based on a cost-of-living adjustment.

“The truth is for the whole system to work … everybody’s got to play,” Weeg said.

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Idaho Mendiola

mendiola MARK
MENDIOLA

 
Reports

During two stops in Idaho Falls on Friday, Aug. 23, Idaho U.S. Sen. Jim Risch criticized what he perceives as the U.S. federal government’s mismanagement of nuclear waste, spiking health care costs, intrusive surveillance of Americans and increasingly onerous business regulations.

On a return visit to Idaho during the August congressional break, Risch addressed a large auditorium crowd at a City Club of Idaho Falls function and discussed financial concerns with small business owners and operators during a more intimate roundtable session.

Asked if he would support Oregon Sen. Ron Wyden’s Nuclear Waste Administration Act of 2013 that would create a new federal agency for overseeing the nation’s nuclear waste in place of the U.S. Department of Energy and initiate a pilot spent fuel storage site, Risch said it is more likely the large bill’s details would be voted on in committee rather than on the U.S. Senate floor.

The Idaho Republican who serves on the Senate Energy and Natural Resources Committee stressed that Yucca Mountain’s use as a repository for high level nuclear waste has been authorized by Congress. “It is not an idea. … It is the law of the land,” Risch said, stressing that $96 billion has been invested to develop it in Nevada.

Senate Majority Leader Harry Reid, D-Nev., however, “convinced the president of the United States they should ignore the law of the land. It has not been repealed,” Risch said, noting the executive and legislative branches of government are blocking that law. Congress officially selected Yucca Mountain as a repository in 2002, but the Obama administration halted its development in 2009.

The U.S. Circuit Court of Appeals for the District of Columbia, however, this month ordered the Nuclear Regulatory Commission to resume legally mandated licensing for Yucca Mountain. In its 2-1 ruling, the court – which Risch said is one of the nation’s most liberal – said the NRC acted improperly when it shelved licensing hearings for the repository.

Risch said it remains to be seen whether President Obama will obey the appellate court‘s ruling. The Supreme Court does not need to take the case, he mentioned.

Risch noted the Patient Protection and Affordable Care Act or “Obamacare” also is the law of the land, but President Obama has decided to delay provisions with the stroke of a pen. In fact, Obamacare’s Medicare cuts and the law’s employer mandate have been delayed until after the 2014 congressional elections.

It was mentioned in the Federal Register that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies. Another costly provision of the health law — its caps on out-of-pocket insurance costs — also will be delayed for one more year.

According to the Congressional Research Service, the Obama administration had missed as many as one-third of the deadlines specified by law under the Affordable Care Act as of November 2011.

Risch and Idaho U.S. Sen. Mike Crapo have asked for a full delay of all Obamacare components to avoid the economic harm they say it would inflict on American families. They criticized Obama’s decision to waive provisions without the consent of Congress. Risch said he is a co-sponsor of legislation to repeal Obamacare.

He called Obamacare “an absolute abhorrence to the free market system” and said he would not vote for a continuing resolution to fund it.

While supporting repeal of the Affordable Care Act, which he said nationalizes one-sixth of the entire U.S. economy, Risch denied that he supports shutting down government to do so as some Republicans have advocated.

“It’s a dumb idea to talk about shutting down the federal government,” Risch said. “You don’t govern by shutting down the entity you’re running.”

Risch predicted that Reid would not allow any budget bill to be introduced to the Senate floor without inclusion of funding for the Affordable Care Act, a 3,000-page bill enacted without a single Republican vote. He also said he expected a continuing resolution would be enacted before the government would shut down even though he and 30 others would vote against such a resolution.

Republicans are focused on controlling skyrocketing health care costs, said Risch, who defended the use of filibusters, which he said give both sides the opportunity to debate and vote on a bill’s amendments.

“If it wasn’t for the filibuster, we would get zero amendments,” he said, referring to his Republican colleagues, adding the nation’s founders designed the federal government with checks and balances to prevent passage of poor legislation.

The former Idaho governor and legislator said he views his greatest challenges as dealing with the federal government’s regulatory structure and reversing the nation’s worsening financial condition.

The federal bureaucracy churns out 70,000 pages of rules and regulations for every 2,000 pages of legislation enacted by Congress, Risch said, noting when he took office in 2009, the national debt was $10 trillion. It now stands at $17 trillion. The federal government also is twice the size of what it was in 2000, he said.

Asked about National Security Agency surveillance of Americans’ telephone calls, e-mail messages and Internet activity, Risch said it’s crystal clear that the nation’s intelligence agencies can conduct surveillance on non-Americans without securing warrants from judges, but that’s not the case for U.S. citizens. Risch sits on the Select Committee on Intelligence and the Committee on Foreign Relations.

Questioned about his stance on the Senate’s role in opposing or condoning a declaration of war against Syria after it was disclosed that hundreds of Syrians were victims of a chemical attack, Risch said he is absolutely opposed to American boots on the ground there.

“Syria is an absolute mess,” he said, pointing out that 14 of the 19 anti-Assad government forces are linked to al-Qaeda or terrorism. “When Assad goes, there will be civil war to decide who will run the government,” he said, predicting a horrible bloodbath.

No-fly zones would be difficult to enforce because Syria has one of the most sophisticated anti-aircraft systems in the world, and Iran is closely watching the U.S. response in regards to Syria, Risch warned.

Following his City Club question and answer session, small business representatives complained to Risch about the negative impact Obamacare, taxation and other government regulations are having on their operations, including trucking, ranching and aircraft. Risch is the ranking minority member of the Committee on Small Business and Entrepreneurship.

Idaho Falls City Councilwoman Sharon Parry, a mayoral candidate, and Linda Martin, Grow Idaho Falls Inc. chief executive officer, both lamented red tape hindering airline service in the region.

Agreeing with one roundtable participant about government agencies “changing goal posts,” Risch said the Environmental Protection Agency is notorious for altering its requirements after businesses spend large sums of money to comply.

“One of the big differences between the private sector and government is a sense of urgency,” Risch told the business proprietors. “I think this administration is regulators on steroids.”

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Idaho Mendiola

mendiola MARK
MENDIOLA

 
Reports

Pocatello lost about 3,200 jobs between 2007 and 2009 when companies moved out of the Gate City, shuttered their businesses and closed their doors. From 2002 to 2010, Pocatello grew only about 1 percent in population, losing its status as Idaho’s second largest city, Pocatello Mayor Brian Blad reflects.

By comparison, Chubbuck grew about 46 percent and Idaho Falls grew by double digits during the same period. Pocatello now ranks behind Boise, Nampa, Meridian and Idaho Falls in size, according to 2010 Census data.

Speaking on a recent “Business Dynamics” interview program that airs on Pocatello’s Vision 12 cable access station, Blad said from 2003 to 2006 the city’s economy was doing pretty well in tandem with the nation moving forward. However, things started turning downward from 2007 to 2008, he noted.

“Things got pretty tough after the market meltdown,” said Blad, a political unknown who defeated Pocatello Mayor Roger Chase in a 2009 municipal election upset.

Chase is running again for the city’s top post, hoping to reverse an embarrassing defeat. It is widely presumed Blad will seek re-election although he has not formally announced.

When Blad took office in 2010, “we were in pretty bad shape. I might add we’re not in great shape now. We’re still 1,000 jobs down. We’re still in trouble in my mind,” he said, estimating 2,200 jobs have been added the past 3½ years.

Blad credits hiring by Allstate Insurance, Petersen Inc., Pocatello Regional Medical Center, WinCo, Dick’s Sporting Goods, ON Semiconductor and other employers for contributing to the city’s turnaround in recent years.

“We’ve been able to chip away at the deficit of 3,200 jobs,” he said, adding he hopes a recent successful recruiting trip to California will generate hundreds of new jobs for Pocatello and eliminate that deficit.

Blad and Bannock Development Corp. Executive Director John Regetz visited 10 California companies in three days. Seven of those companies have committed to visit Pocatello this summer, which historically does not happen. Usually, it’s a two-year process before a company will visit a prospective site after being contacted, he said.

The prospective California firms range from high technology to retail to construction, Blad said. The owner of one company that potentially could employ 1,000 and be located at the Pocatello Regional Airport is very interested in relocating, but prefers to pay his workers $9.50 an hour.

The city counters that $15 an hour is a living wage and argues he could afford to pay that by the amount of money he would save in taxes, energy costs and other expenses by moving to Idaho, which is much more business-friendly than California, Blad said.

A very high tech company could employ up to 30 employees, but pay them $150,000 to $200,000 a year. An existing company could eventually hire 440 workers, but some creative financing needs to be arranged, the mayor said. Some of the contacted companies would pay $40,000 to $75,000 in annual wages.

Allstate nearly backed out of locating a customer service center in the Pocatello area after it had indicated it would “sign on the dotted line,” Blad said, noting that last minute conflicts arose, which nearly scuttled the deal. “To have the carpet ripped out from under you is just devastating.”

Blad said he and other city officials scrambled to help make arrangements for Allstate to locate in Chubbuck by providing Pocatello building inspection, engineering and legal assets, which Chubbuck lacks. He also traveled to Allstate’s corporate headquarters in Chicago, whose number of employees there virtually equal Chubbuck’s population.

Allstate executives were concerned about Bannock County’s relatively small population base and were hesitant about locating a customer service center in the Pocatello/Chubbuck area, which would be the company’s smallest market in the nation, Blad said, adding Allstate was considering Chicago, Charlotte, N.C., and San Antonio for a call center. Pocatello also was competing against Salt Lake City and Ogden for it.

Blad
Mayor Brian Blad

After they were persuaded to commit to Pocatello/Chubbuck, Allstate officials now “absolutely love” their new Bannock County location, recently closing a Chicago call center, which was outperformed by the one here, Blad said.

Originally, Allstate was planning to employ 600 at its Chubbuck center, but recently announced the addition of about 270 more jobs, soon bringing its total local employment to nearly 900.

Blad and Chubbuck Mayor Steven England also worked closely to retain Petersen Inc. in the area after that Ogden-based manufacturing company planned to completely pull out of the Gateway West Industrial Center. Petersen will boost its employment to about 100 at its new Pocatello Regional Airport location, Blad said.

He emphasized that employment at Allstate and Petersen will total 1,000 between those two companies alone. Potentially, Southern California could add 4,000 to 5,000 jobs to Bannock County’s economy the next four to five years, Blad said.

Blad praised WinCo’s location of a large new grocery store at the location of the vacated Fred Meyer and Albertsons stores on the corner of Yellowstone and Alameda, which has sat vacant for 20 years, making it a blighted area and eyesore for decades.

WinCo has hired an additional 100 employees at its new site, where a new credit union and Carl’s Jr. fast food outlet also will open. Ridley’s will move into the old WinCo store, but keep its other store across town open.

Hoku’s recent bankruptcy and shutdown of its $700 million polysilicon plant has been a major setback for Pocatello’s economy. It had planned to initially hire 200 and eventually add 400 to its payroll. Blad noted the previous city administration spent $1 million on land for Hoku’s plant.

“It was a good idea, I assume,” he said. “The city council and mayor at the time felt it would make a good project.”

The price for polysilicon needed for solar panels has plunged, but had it stayed high as when the project was first planned, the Hoku plant could have been making $1 million a day, Hoku officials told the city.

Blad said the South Valley Connector that will link South Bannock Highway to South Fifth Avenue with a tie-in roadway to South Second Avenue will open the sound end of Pocatello to economic development. Construction on it has started after more than 20 years of planning.

“We started pushing harder than we’ve ever pushed on it,” Blad said. “This shows Pocatello is moving. We’re not standing still or going backward.”

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Mendiola

mendiola MARK
MENDIOLA

 
Reports

An Idaho State University vice president recently submitted proposals to Idaho Commerce Director Jeff Sayer to remove constitutional barriers impeding research and economic development at the state’s universities, which he says put them and the Gem State at a competitive disadvantage.

When he addressed the Bannock Development Corp.’s June 18 annual investor reception at Allstate’s new customer service center in Chubbuck, Dr. Howard Grimes, ISU vice president of research and economic development, mentioned he had given Sayer the proposals.

Grimes has overseen ISU’s new 250,000-square-foot Research and Innovation in Science and Engineering (RISE) Complex on Alvin Ricken Drive since November. He leads initiatives in biomedical and renewable energy research, and nano-material development for innovative sensor design, as well as environmental and geoscience networks.

He predicted the RISE Complex will dramatically change Southeast Idaho the next 15 to 20 years. “My vision is it will remain somewhat empty during its entire life span,” Grimes said, explaining new businesses will need space to operate. He expects it will be up to 80 percent full.

Grimes said he is talking with two startup companies now, and an established company is at the point it will need to do advanced manufacturing on a commercial scale. He mentioned he also is negotiating with a “very, very well-known multinational global company” whose annual net revenue exceeds $2 million.

“Six months into it, we’ve got multiple things on the burner,” he said, adding he recently was notified the National Science Foundation was awarding ISU a $5 million grant. “That is not easy to accomplish.” He expects another large grant to be announced in a matter of weeks.

The NSF also has awarded a five-year $20 million grant to Idaho universities, including ISU, to study how society and landscapes are interconnected.

Virtually every state within the past 10 years has radically altered constitutional statutes and changed policies to “incentivize” universities so they can do innovative research and economic development. “We have not done that in Idaho,” Grimes said. “Significant things need to change.”

States like Texas, North Carolina, Massachusetts, Colorado and Utah are making major advancements in developing research universities, he noted, citing Utah State University’s 30 business startups as an example. States up and down the East and West Coasts also are well ahead of Idaho in this regard.

“Paradigm shifts need to happen in the state of Idaho for all of it to be successful,” Grimes said, emphasizing there has been a fundamental shift in the federal government’s approach to funding research. “The private sector is going to have to lead the brigade forward.”

A former Washington State University graduate school dean and research vice president, Grimes championed WSU’s largest grant funding growth in the university’s history — 85 percent since Fiscal 2008. He also directed WSU’s Center for Environmental Research, Education and Outreach.

Grimes said universities started morphing into research and economic development five to six years ago. They have been forming teams of scientists to advance their work with private sector partners and secure grants, adopting an entirely different strategy of accelerating “lab bench to market” innovations, which previously took 20 years to complete.

bannock
Dr. Howard Grimes, left, ISU vice president of research and economic development, converses with Tim Forhan, a Sanctuary Wealth Management partner, at a Bannock Development Corp. meeting. (photo/Mark Mendiola)

 

Influences disrupting higher education include decreases in state funding, widespread availability of Internet courses and the emergence of new education models lavishly funded by governments around the world, Grimes said.

He stressed that the contribution education makes to work force development and its incredible impact on economic development cannot be overestimated. He said it is a myth to believe most students leave the state where they have been educated.

Universities, which are “engines of innovation,” can be good at commercializing their research and collaborating with the private sector to attract new industries or they can be horrible at it, Grimes said, noting he is the “single point of contact” at ISU for such initiatives.

“That makes it happen lots faster. The reason is I know how to do it and a lot don’t,” he said, cautioning that some faculty members can make commitments that simply are not legal or practical.

Before Grimes spoke, Bannock Development Chairman Andy Akers, who owns D&S Electrical Supply Co., noted that he, Pocatello Mayor Brian Blad and BDC Executive Director John Regetz contacted 10 companies in California on a recent visit. Officials with two of those companies since have visited Pocatello.

“Those people are aching to get out of there,” Akers said of California business owners, noting that Regetz also attended trade shows that created a few leads. Those California businesses contacted represent high tech, medical products, transportation and distribution sectors.

Akers praised Mark Lupo of Idaho Power for securing two grants under the utility’s Partnering for Economic Development program — $3,500 to help fund the recent California visit and $5,000 for regional business expansion development. The California trip cost about $10,000. Bannock Development operates on a $270,000 budget.

Akers also noted that the Holiday Inn Express & Suites is constructing a new motel near Interstate 15 and ATCO is hiring 50 more workers at its Gateway West Industrial Center module housing plant.

It also was pointed out that Allstate is adding more than 500 jobs to its customer service center; ON Semiconductor has invested $37 million into its Pocatello plant the past three years; Petersen Inc., which employs 60 at its airport manufacturing plant, earned a Boeing supplier of the year award; Herberger’s employs 100 at its new Pine Ridge Mall retail store; WinCo has expanded its employment to 210 at its new grocery store, and Idaho Central Credit Union was voted one of the best places to work in the state.

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