Why Lawmakers Will See A Rosy Image Of Idaho’s Economic Outlook
Idaho’s annual legislative session starts next week, but some lawmakers are already at work. Each year, just before the session, a group of lawmakers meets to try and get an idea of what Idaho’s economy will be like in the coming year. They use what they hear to inform their budgeting decisions.
Of course, what the state’s economy will do in the future is something that’s important to most everyone in Idaho, not just lawmakers. So here’s a preview of what legislators will hear.
One of the people they’re likely to pay a lot of attention to is Alex LaBeau, president of the Idaho Association of Commerce and Industry. His group lobbies for more than 300 Idaho businesses from a variety of industries.
LaBeau says the state’s economic outlook is good, really good in fact. LaBeau says growth is strong but sustainable. Unemployment continues to fall, though he doesn't mention that that's largely because Idaho's labor force is shrinking.
“We’ve seen some health care prices stabilize,” LaBeau says. “We’ve seen some rebound in chip demand from Micron Technology. We’ve seen a lot of the commodity prices stay reasonably OK for a lot of the agriculture consumption. And we’re getting a lot of investment out there that I think is a very positive bright spot.”
LaBeau thinks Idaho’s economic outlook is so good, lawmakers this session can afford to boost education and road funding, while at the same time cutting taxes.
“It is a good place to be in,” he says.
Lawmakers will get differing perspectives from heads of state agencies and economists. They’ll also hear from business leaders in several Idaho industries. Each will focus on how things look in their own industries.
LeAnn Hume from the company Cushman and Wakefield will talk about commercial real estate.
“The commercial market is very healthy,” Hume says. “We all experienced a very busy 2014 and we don’t see it lifting in 2015. I’m very optimistic about our economy.”
Hume says investors from Asia are buying commercial real estate in California. Then the Californians, who are selling it, are buying commercial real estate in Idaho. She thinks if there’s not a big jump in interest rates, things should continue to be good.
Prospects are more mixed in the beef industry. Jayne Davis from Agribeef Co. will tell lawmakers about that.
“Cattle prices are at an all-time high,” Davis says. “It’s certainly good for the producers, I think it makes it a little more difficult for processors and feeders.”
Davis says 2014 was very profitable for people raising and selling cattle in Idaho. She doesn’t expect 2015 to be quite as good because supply is catching up to demand.
Overall, Don Holley says optimism about Idaho’s economy is justified. Holley teaches economics at Boise State University. He’ll talk to lawmakers with a group of economists from other Idaho colleges. Holley says the economic outlook is not all rosy.
“It looks good in terms of how fast it will grow,” Holley says. “It doesn’t look good in the sense that we’re still not back to where we were before the recession hit. Even though the unemployment rate is falling, it’s not down to where it could be. It’s not down to where it should be.”
Holley says Idaho’s economic prospects will mean a substantial increase in revenue for the state. But unlike LaBeau, Holley isn’t convinced that this is a good time to cut taxes.
“There are a lot of things we should be spending on that we haven’t been: education, prisons, health and welfare,” Holley says.
Holley suggests that pay increases for teachers and state employees might be a good use of this year’s expected increased revenues. He says those groups have disproportionately borne the brunt of the recession and are long overdue for meaningful raises.
The Idaho Legislature cut taxes in 2012 and 2013. This year, tax cuts versus increased spending is again likely to be one of the big debates in the legislative session.
Find Adam Cotterell on Twitter @cotterelladam
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