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HEW were the toughest parts

Horman
Representative Wendy Horman (center) at the Idaho Falls City Club. (photo/Mark Mendiola)

 

mendiola MARK
MENDIOLA

 
Reports

For Senate Pro Tem Brent Hill, the controversial health insurance exchange, education reform and Medicaid issues tackled by lawmakers this year made the 2013 Idaho legislative session one of the most challenging he has experienced. For Wendy Horman, it was her baptism by fire.

Republicans Hill, a Rexburg District 34 senator, and Horman, an Idaho Falls District 30B representative, gave their takes on the recently concluded session as a veteran and a rookie, respectively, at a recent City Club of Idaho Falls luncheon.

This past session was the 12th for Hill, a CPA who serves on the Local Government & Taxation and State Affairs committees, and the first for Horman, a small business owner who serves on the Education, Judiciary, Rules & Administration and Local Government committees.

Hill said the Legislature’s Joint Finance & Appropriations Committee is the envy of many states because of its efficiency. It was informally decided about 25 years ago as part of an unwritten power sharing rule that if someone sat on JFAC, he or she could not chair a committee or be a member of leadership, he said.

“That spread the opportunities around,“ Hill said. “Being in the Legislature is exciting, and it’s frustrating. It’s rewarding, and it’s stressful. There’s always drama.”

Horman said intensive three-day legal training in ethics and procedures enabled freshmen legislators to “hit the ground running. That was not an accident. There’s a very good correlation. … I’m telling you right now, the freshman class were not ninth graders.”

The magnitude of responsibility as a legislator is almost overwhelming, she said, but 11 years on a Bonneville school board helped prepare her for the task at hand.

Horman said process, policy and people had to align as guiding principles when she was a school board member. As a new legislator, she said she had to add a fourth “P” as a principle -- politics.

“The partisan world is not something you can overlook or you do so at your own peril,” Horman said, adding a “crud filter” must be applied when processing information as a legislator. She said she was an “abject failure” in answering hundreds of messages flooding her e-mail box.

Many of those e-mails addressed gun control. Hill said legislators resisted pressure to impose gun restrictions and called Idaho one of the most Second Amendment-supportive states in the union. (more…)

A lobbyist’s take on the session

Watts
 
Greater Pocatello Chamber of Commerce President & CEO Matt Hunter (left) chats with lobbyist John Watts at an Idaho Falls luncheon. (photo/Mark Mendiola)

 

mendiola MARK
MENDIOLA

 
Reports

John Watts, a partner at Veritas Advisors, has been lobbying Idaho legislators since 1983 on behalf of a wide range of clients.

When he addressed an Idaho Falls Mayor’s Business Day luncheon on April 2, two days before the Legislature adjourned, he said its 2013 session has been “truly uniquely different,” setting new precedents and breaking traditions.

The Boisean said 24-hour cable news, cell phones and social media like Facebook and Twitter were not in existence 30 years ago when he started his career as a lobbyist, but they have dramatically changed the way business is now conducted at the State Capitol.

Everyone at the Statehouse also is worrying about issues at the federal level that directly impact Idaho, Watts said. “Then, along comes redistricting,” which brought about a whole new set of legislative districts and a crop of 32 brand new legislators.

And, for the first time in his memory, a sitting speaker of the House was defeated for re-election, Watts said, referring to Scott Bedke’s defeat of fellow Republican Lawrence Denney for the top post, which Denney has held since 2006.

A Joint Finance and Appropriations Committee education bill was defeated on the floor of the Senate. Watts said he does not remember in 30 years a JFAC bill dying such a death. Usually, JFAC legislation is considered a given because representatives of both houses work together to draft it.

Six of 10 Senate chairmanships and seven of 14 House chairmanships are
held by new legislators, Watts noted. There also is a new minority leader in the Senate. “Sophomores are sitting as chairs,” he said.

Watts likened the Idaho Legislature to a business where one third of the work force is replaced and told to start work the next day with up to 60 percent of the managers brand new. This session also marked the first time it was mandatory for all legislators to undergo ethics training.

One of the longest debates in the Legislature’s history also happened this session, pertaining to establishing a state health insurance exchange in response to the federal Patient Protection and Affordable Care Act or “Obamacare” taking effect.

The controversial issue was debated for nine hours on the House floor and for seven hours in the Senate, ranking for length of time with when abortion was debated in the Legislature during the early 1990s, Watts said. Full hearings regarding the health care issue took nearly two full months, too. (more…)

Economic hits in eastern Idaho

Chase
 
Former Pocatello Mayor Roger Chase, left, answers a question after participating in an economic impact forum. (photo/Mark Mendiola)

 

mendiola MARK
MENDIOLA

 
Reports

With Battelle Energy Alliance and CH2M-WG Idaho eliminating hundreds of high-paying jobs in the past year with more layoffs to come at the Idaho National Laboratory, eastern Idaho’s economy has taken a major hit unlike anything it has absorbed in recent years.

The second largest employer in Idaho behind state government, INL has accounted for about 8,000 direct jobs and roughly 24,000 indirect jobs in the state, boasting a $3.5 billion total economic impact and generating about 6 percent of Idaho’s entire tax revenue.

At its peak, total INL employment once stood at 13,000. About 3.5 percent of Idaho’s total work force has been attributed to INL with one in five jobs from Pocatello to Rexburg tied to the federal nuclear research and development site, including an estimated 760 employees in Pocatello and about 1,200 in Blackfoot, not to mention the majority of INL workers in Idaho Falls.

While Bonneville County has benefited the most from the billions of federal dollars pumped into the INL over the years, Bannock and Bingham counties also have reaped lucrative cream off the top.

Pocatello, however, has suffered significant setbacks in the past year. Hoku Materials’ polysilicon plant, once considered a great boon to Bannock County’s economy, sits hauntingly vacant after hundreds of millions of dollars were invested in it and some 200 employees were terminated.

Since acquiring AMI Semiconductor in March 2008, Phoenix-based ON Semiconductor has reduced employment at its Pocatello plant – once AMI’s world headquarters – by a few hundred, but it has invested millions into sophisticated equipment at the integrated circuit fabrication site.

Heinz’ frozen food plant in Pocatello at one time surpassed the ON plant and Union Pacific Railroad as Pocatello’s largest private employer with 800 workers, but it cut 80 full-time employees this month due to eliminating a frozen food line, dropping its total employment now to about 400.

The Dodge National Circuit Finals Rodeo once pumped hundreds of thousands of dollars into Pocatello’s economy in one week, attracting thousands of enthusiasts, but it trotted off to Oklahoma City in 2011 after 23 years at Idaho State University’s Holt Arena.

The Western Frontier Pro Rodeo ran in its place for two years, but as of 2013, there will be no major rodeo in Pocatello for the first time in 70 years, hurting motels, restaurants and retail stores accustomed to the annual boost in spending.

Needless to say, these daunting developments pose stiff challenges for the region’s business and government leaders. Some of those key players appeared at a well-attended March 27 economic impact panel discussion at Idaho State University and emphasized positive trends in the region, expressing optimism.

It was disclosed that evening at the forum that Pocatello Mayor Brian Blad and Bannock Development Corp. Executive Director John Regetz were in California seeking to recruit companies disgruntled by the Golden State’s rising taxes and burdensome regulations.

Allstate’s location of a customer service center in Chubbuck that employs hundreds was cited as a major coup for Bannock County. A WinCo super store recently opened and Herberger’s opened its first department store in Idaho at the Pine Ridge Mall. Canadian-based ATCO also recently located a manufacturing operation at the Gateway West Industrial Center.

Responding to questions about Hoku, former Pocatello Mayor Roger Chase and Idaho Department of Commerce Chief Economic Development Officer Gynii Gilliam explained that because Hoku was a new company engaged in new technology, the city decided it was too risky to finance the project by selling bonds. Gilliam was Bannock Development’s executive director at the time, and Chase was mayor.

Using creative financing, the city required Hoku to front the money. “If we had bonded it, we would be in big trouble right now,” Gilliam said, noting the plant was under construction for five years, greatly improving the property. “Pocatello is not out anything.”

Chase said the city owns the Hoku property and put $1 million into the project. The site’s infrastructure and equipment, including an electrical substation, are worth an estimated $30 million. All of its onsite steel will not go to waste, Chase predicted.

Chase, who chairs the Idaho Water Resource Board and serves as a consultant for the Bingham Economic Development Corporation, said one of the greatest challenges for economic developers is securing good paying jobs with benefits. Retail sales also are struggling in the region, he noted.

High commodity prices have helped the agriculture sector, and the stock market’s rise has boosted 401(k) values, creating more spendable income, Chase said. However, he noted Idaho has the highest percentage of people making minimum wage in the nation and one of the lowest average incomes per family.

After Pocatello in 2001 lost FMC’s elemental phosphorus plant that employed hundreds of workers and Union Pacific downsized its Pocatello operations, a $12-an-hour job with benefits is now considered good, he said. (more…)

The Risch tele-town

mendiola MARK
MENDIOLA

 
Reports

President Obama must wield his authority to minimize the harm inflicted by the looming $85 billion in federal “sequestration” budget cuts set to take effect on Friday, March 1, Idaho U.S. Sen. Jim Risch said Monday night, Feb. 25, during a “Tele-Town Hall” meeting.

“I hope the president of the United States who is in charge of implementing the cuts and whose idea it was will do so reasonably,” Risch said. “The president has the ability to move those cuts around and make them as painless as possible. I hope he does that.”

Recently ranked by the National Journal as the most conservative U.S. senator in Congress, Risch said the nation’s financial condition is the most prominent issue confronting Washington and all states.

“If you think it’s pretty bad, the bad news is you wouldn’t be exactly correct. It’s much worse than what every American knows,” the former Idaho governor said. “The facts of where we are right now are not debatable.”

The federal government has been spending $3.8 trillion annually for the past four or five years – or about $11 billion a day. “Unfortunately, on average, the federal government only takes in $6.5 billion a day. … The federal government borrows a little over $4 billion every single day just to meet its bills that night.”

Contrary to what is commonly believed, the government is borrowing the money to pay the difference, primarily from China, not printing it. The U.S. Treasury used to borrow once a month to pay its bills, then once a week. After the American Recovery and Reinvestment Act of 2009 was enacted as a $787 billion economic stimulus, borrowing had to be done on a daily basis. Now, it’s done multiple times a day, he said.

Treasury tells the Bureau of Public Debt how much to borrow. “We also borrow between $50 billion to $70 billion a day to refinance the debt.” If the $6.5 billion in daily revenue were spent on priorities, it would only pay for Social Security, Medicare and the interest on the national debt, but nothing on defense, education, agriculture, parks or anything else, Risch said.

“This also helps underscore how difficult the situation is and how badly the government is pinched,” he said. “The bad news is there’s nothing in play right now to turn this around or change this.”

Congress and the White House have kicked the can down the road by passing legislation every 90 days to keep the government running. The debt ceiling is hit every six months. When Risch took his Senate office in 2009, the national debt was $10 trillion. It now stands at more than $16 trillion.

When the debt ceiling was hit last August, a “Super Committee” was created to find up to $1.6 trillion in spending cuts. When committee members were not able to reach agreement, automatic spending or “sequester” cuts were set to take effect on March 1, after November’s presidential election.

Entitlement programs such as Social Security and Medicare are exempted from the sequester cuts, which will come entirely from discretionary spending programs, which comprise 40 percent of the total federal budget.

“There has been a lot of talk and misinformation and fear mongering” about the impact sequestration will have on the nation, Risch said, noting that when he served in the Idaho Legislature, the governor had the authority to make holdbacks in times of financial setbacks. He would work with legislators to ensure crucial programs were spared.

“We all worked together to make it as painless as possible for Idahoans,” Risch said. “We worked together to make it work in the best interest of the people.” (more…)

Little and the economy

brad little
Dave Smith, a certified public accountant, right, converses with Idaho Lt. Gov. Brad Little following a City Club of Idaho Falls luncheon. (photo/Mark Mendiola)

 

mendiola MARK
MENDIOLA

 
Reports

Idaho Lieutenant Governor Brad Little says the crushing federal debt that has burgeoned from $4 trillion in 2000 to $16 trillion in 2013 and existing future obligations most concern him when considering challenges for Idaho’s economy and how the Legislature will tackle them.

“Today we’ve got new challenges. As always, you’ve got the international economy and what kind of curves that’s going to throw America and Idaho,” Little said, commending the downward trend in Idaho’s unemployment rate. “But we’ve still got … way too high an unemployment rate, but even more critical an underemployment rate.”

Unfunded future liabilities such as Social Security and Medicare have gone from $20 trillion to $80 trillion as the U.S. population ages, Little said. Average retirees have paid $110,000 into Medicare, but will take out $350,000 at a rate of 10,000 retirees a day, he noted.

“So, you don’t have to be a rocket scientist to know that that’s unsustainable,” he recently told the City Club of Idaho Falls. “Unfortunately, the president and Congress … have kicked the proverbial can down the road. ... The problem with that can is it’s getting a lot bigger and a lot harder to kick in the fact that they haven’t addressed it.”

Little said Idaho’s congressional delegation has been in the forefront of addressing the deficit crisis, but the task is not easy. If Congress tomorrow were to eliminate every federal employee, it would not cut the annual operating deficit by half. “That’s the magnitude of just the cash deficit that’s out there. So, there are going to be hard decisions that are going to need to be made on the federal level.”

That’s important to Idaho because 30 percent to 40 percent of the money appropriated by the Legislature comes from the federal government. A large percentage of the money used by Idaho cities, counties and highway districts also comes from the same source.

“So, when Congress inevitably does the right thing, we know there’s going to be consequences.”

With the exception of oil-rich states like North Dakota, Montana and Oklahoma, Idaho has led the nation in recovering from the last recession, the lieutenant governor said.

It did so by prudently setting aside rainy day funds, not raising taxes, cutting spending by 20 percent and adhering to a structurally balanced budget, which essentially means one-time money is not spent on ongoing programs, Little said.

“I can tell you even though 40-some states require balanced budgets, there’s very few of them with the exception of those energy states that are in the same position we are.”

What’s even more critical is budget issues cannot be resolved in Idaho or the nation if the economy does not grow. “So that’s a delicate balance that has to take place on both the national level and the state level.”

Retaining existing businesses, recruiting new ones and diversifying the economy are crucial for resilience, he said. “The status quo as far as business is not going to be adequate for us to grow to where we’ve got that shock absorber when those waves of whatever it’s going to be come to us from the federal government. We don’t know and frankly they don’t know, but I think all learned souls back there will tell you it’s inevitable.” (more…)

An expansion

XXXXX
 
Idaho Gov. Butch Otter converses with Ross Eggett, Allstate human resources manager, at the company’s Chubbuck customer call center where a major expansion was announced.

 

mendiola MARK
MENDIOLA

 
Reports

Allstate Insurance Company’s announcement Thursday, Jan. 17, that it would expand its Pocatello/Chubbuck operations by opening a roadside services center and hiring 225 additional employees was welcomed by Idaho Gov. C.L. “Butch” Otter and a host of elected and business officials.

Opened 14 months ago directly west of the Pine Ridge Mall and south of Home Depot, the 75,000-square-foot Allstate customer contact center now employs 250 and is in the process of training 120 additional employees during 2013’s first quarter. Those 370 employees, coupled with the 225 in roadside service, would bring Allstate’s total local employment to nearly 600.

Like Otter, Pocatello Mayor Brian Blad and Chubbuck Mayor Steven England praised Allstate’s expansion. Blad said he expects Allstate’s employment in Bannock County to ultimately reach 800, making it one of the area’s largest employers.

Allstate’s new center will handle roadside emergency calls for customers across the United States, requiring center representatives, managers and instructors. The existing customer care center is undergoing construction to accommodate the roadside services center.

“Allstate could have gone anywhere else,” Otter told a large crowd inside the company’s dining area. He was flanked by local employees with 225 blue balloons. “This adds a lot of luster to a project started a short time ago. … This is a great day for us all.”

Otter said he commends Allstate when he meets with other governors. He mentioned that he recently met with the premiers of four western Canadian provinces to proceed with the Keystone pipeline project. (more…)

Growth ahead?

mendiola MARK
MENDIOLA

 
Reports

Calling the recent “fiscal cliff” negotiations in Washington a lost opportunity, Bank of Idaho President and Chief Executive Officer Park Price says if Congress and the White House can successfully resolve the looming debt ceiling and sequestration budget controversies, he expects robust economic growth in Idaho and the United States during 2013.

If agreement is not reached, America will teeter and lurch back into recession, he anticipates, noting the federal sector accounts for 20 percent of the economy.

Noting that six million jobs have been lost since the nation’s economic meltdown of 2008, Price says he hopes 2013 will see business start to hire more people, which is a must for the nation to pull out of its worst downturn since the Great Depression.

But uncertainty over whether the U.S. will default on its national debt or whether massive automatic federal budget cuts will be imposed by sequestration on March 1 has companies reluctant to resume hiring. When they are forced to lay off quickly, they tend to hire slowly, says Price, who earned an economics degree from Dartmouth College in New Hampshire.

“Businesses hate uncertainty,” Price says. “The longer this goes on, the harder it is on the economy.”

For 13 years, Price specialized in capital investments for General Motors. From 1979 to 2003, he owned and operated Park Price Motor Co. in Pocatello, which was founded by his father in 1947. In July 2003, Price became president of the Bank of Idaho, which has seven branches in eastern Idaho and real estate offices specializing in mortgage originations in Twin Falls, Pocatello and Idaho Falls. He became the bank’s CEO in 2010.

The recent disappointing fiscal cliff debate resulted in some tax increases with no spending cuts. A more comprehensive package was needed on a grander scale, Price says, adding that deficit spending cannot be sustained at its torrid pace.

“It’s clear that the path we’re on is unsustainable. We continue to mortgage the future of our children and grandchildren. It is morally unacceptable to tolerate this,” the former Pocatellan says.

On the other hand, if spending is cut too aggressively, it could be a shock to the economy, tax revenues could fall and the federal deficit worsen, he cautions, urging that cuts be done gradually, not drastically. Congress won’t agree to raise the federal debt ceiling as President Obama wants without significant spending cuts, he observes.

Because of the fiscal cliff outcome, taxes are now off the table, Price notes, stressing he hopes cooler heads prevail as the new Congress gets organized. “Unfortunately, we don’t have much time,” he says. (more…)

Prospects for natural gas in Idaho

mendiola
Mark Mendiola
Eastern Idaho

Hydraulic fracturing or “fracking,” coupled with technological advances in horizontal drilling, have revolutionized the natural gas industry’s ability to tap into North America’s vast shale reserves and dramatically boost available natural gas volumes.

Because of its relatively low cost and increased availability, natural gas has become the “energy of choice” for many companies using it to fire up their plants, heat their buildings, generate electricity and maintain business operations.

Natural gas executives lately are expressing an optimism they haven’t always enjoyed about their industry’s future. Before, limited natural gas reserves appeared for decades to be locked up and inaccessible due to an inability to reach them underground.

Fracking and horizontal drilling have made an almost infinite supply of natural gas and petroleum a reality, they say, greatly helping America’s energy independence.

But the controversial hydro fracturing technology is opposed by many environmental groups who fear it contaminates ground water, reduces air quality and causes gases and chemicals to migrate to land surfaces.

Injection of highly pressurized fluids into subterranean shale formations creates new veins or fractures, which improve extraction rates and recovery of hydrocarbons. The fluid injected into the rock typically is a slurry of water, sand, gels , foams, chemical additives and gases, including nitrogen, carbon dioxide and oxygen.

Industry officials say fracturing liquids consist 90 percent of water, 9.5 percent of sand and .5 percent of chemicals. A typical fracking treatment uses between three and 12 chemical additives, including acids, salt, friction reducers, ethylene glycol, methanol, isopropyl alcohol, carbonates and disinfectants.

Petroleum engineers, not public relations professionals, coined the term “fracking,” notes Dan Kirschner, executive director of the Portland-based Northwest Gas Association – a trade organization that includes six natural gas utilities serving Idaho, Oregon, Washington and British Columbia, and four transmission pipelines that transport natural gas throughout the region from supply basins.

There were large declines in industrial natural gas use in 1999 and 2000 in connection with California’s energy crisis, which left only two of 10 aluminum plants standing in the Pacific Northwest, Kirschner says. The “Great Recession” that started at the end of 2008 also caused permanent shutdowns of other plants across the region.

Meanwhile, “gas came into the market right into the teeth of the Great Recession. There was a decline in demand just as there was a great increase in production.” From 2007 to 2010, there was a dramatic spike in production, driving down costs. (more…)

Crapo looks at the cliff

mendiola
Mark Mendiola
Eastern Idaho

With about 6,100 jobless Idahoans facing a cutoff in their extended weekly unemployment payments by the end of December and plunging over their own fiscal cliffs, U.S. Sen. Mike Crapo, R-Idaho, says Congress and the Obama administration have only a few weeks left to resolve the nation’s ominous federal budget crisis before taxes spiral up and deep spending cuts are imposed.

Conducting a November 14 iTownHall conference call from his Washington office that reportedly was tuned into by thousands of Idahoans, Crapo said, “We truly are facing difficult and historic times in our country.”

Noting the nation recently went through extremely intense presidential and congressional elections that only succeeded in maintaining the status quo – President Barack Obama remaining in the White House, Republicans controlling the U.S. House and Democrats dominating the U.S. Senate – Idaho’s senior senator said the government has been split and unable to bridge partisan differences.

Meanwhile, Americans “face very, very serious and immediate problems,” including a $16 trillion national debt swelling by $1 trillion a year, and the Social Security, Medicare and Medicaid entitlement systems “rapidly facing insolvency.”

Crapo said: “The economy is beginning to reel because of our debt load. If we don’t take prompt action soon, the world markets will soon lose confidence in the ability of the United States of America to pay its debt. We literally face the threat of losing the American dream.”

He explained the so-called “fiscal cliff” technically is different from the debt crisis but related. The cliff over which the federal government is scheduled to go over on Jan. 1, 2013 involves $1.2 trillion in automatic spending cuts “done in a way that is very inartful with the potential of causing great damage to the military and the economy,” Crapo said. (more…)