Three of Idaho’s neighboring states placed in the top 10 states, with Utah as the top state. Washington ranked fifth, and Oregon ranked sixth.

Forbes scored the states in six major categories. Idaho was above the national average in all the rankings except its regulatory environment for businesses. Idaho scored best for its low business costs, which includes taxes and the price of labor and energy.

Idaho Gov. Butch Otter has openly tried to compete with Washington and Oregon for businesses. Both states raised some taxes on businesses this year, while Idaho did not. Otter wrote a “love letter” and backed a website urging businesses to relocate to the Gem State. Washington Gov. Chris Gregoire brought up the Forbes ranking in rejecting Otter’s love letter, according to the Seattle Times.

Idaho fared better that some of its surrounding states in the rankings. Montana finished 24th, Wyoming 27th, and Nevada 28th. The worst state for business, according to Forbes, was Maine, which had relatively high business costs and low growth prospects.

The report released Thursday by the National Governors Association (NGA) and National Association of State Budget Officers (NASBO) showed that, on average, states have reduced their spending in the current and previous budgets, and will only increase spending slightly in the next budget.  Idaho, which lowered its tax revenue projections earlier this year, follows the national pattern.

“States are still reeling from the downturn after the unprecedented declines in year over year spending in fiscal 2009 and 2010,” said NASBO Executive Director Scott D. Pattison.  ”States face significant fiscal challenges going forward with the federal Recovery Act funds ending, revenues not expected to be returning to pre-recession levels, and higher demands for many services like health and education.”

The report said many states are reaching similar spending decisions as the Idaho Legislature did this year, including making mid-year spending reductions, drawing down reserve funds, and reducing spending on public education, Medicaid, and other programs.

Idaho differed from other states by not raising taxes and fees on its citizens.  The study didn’t include user fees like those imposed at state parks or courts.  Nationwide, state legislatures approved raising taxes and fees by a net $3.1 billion, with 18 states, including Washington, recommending net increases, while nine proposed tax decreases.  States mostly lowered sales and income taxes while raising state cigarette taxes and other taxes and fees.  Washington and New York lawmakers added a tax on soft drinks, while other states raised taxes on physician services and motor vehicles.

More than 20 other states joined Idaho state agencies in using furloughs and layoffs to meet budget shortfalls.  Twelve states opted to reduce the salaries of state employees, while five opted to privatize some state functions.  Nine states tried to raise revenues by expanding gambling or the state lottery.

The report said that because state tax revenues tend to lag behind national revenues during an economic recovery, Idaho and its fellow states could remain sluggish through early 2013.  Idaho’s general fund tax revenues peaked during fiscal year 2008 at $2.9 billion, and are at $2.28 billion for the current budget, fiscal year 2010.

NGA Executive Director Raymond Scheppach said earlier this year that he thinks state governments could be in the middle of a “lost decade” and that by the time state revenues return to their peak, new federal Medicaid requirements that were part of new health care laws approved by Congress will kick in.  “The bottom line is that states will continue to struggle over the rest of this decade because of the combination of the length and depth of this economic downturn, the projected slow recovery, and the additional Medicaid responsibilities,” Scheppach said.  “The fact is that the biggest impact on states is the one to two years after the recession is over.  With states having entered the recession in 2008, revenue shortfalls persisting into 2014, and a need to backfill deferred investments into core state functions, it will take states nearly a decade to fully emerge from the current recession.”

Not everyone shares Sheppach’s view on states’ Medicaid burden under new health care laws.  A study by the Kaiser Family Foundation found that, through 2020, the federal government will cover 96 percent of the cost of expanding Medicaid, and that states will need to pay $20 million to expand health care to people living above the federal poverty line.

Read more about the new report at the NGA website.

“I’m proud that the Idaho Legislature didn’t fall into the trap that other states now are in – raising taxes and trying to spend their way out of deficits,” Otter said.  He previously offered a “love letter” to Oregon and Washington businesses to move east, which elicited criticism from Washington Gov. Chris Gregoire.

The Idaho Department of Commerce launched a new website touting Idaho’s lower cost of doing business, lower minimum wage, and lower property tax, compared to California, Oregon, and Washington.  “As we’re telling Oregon, Washington and California employers who are weary of their states’ tax-and-spend (and then tax some more) policies, making the shift is well worth a look,” Otter said.  The department launched a website earlier this year featuring interactive maps designed to help businesses relocate to Idaho.

Read Otter’s full editorial below.

IDAHO HAS A LOT TO OFFER BUSINESSES – JUST ASK THOSE WHO ALREADY FOUND A HOME HERE

By Governor C.L. “Butch” Otter

I’ve been told there are easier ways to jumpstart an economy: Raise taxes and throw “government” money (i.e. your money) from the rooftops.  If the problem is that we don’t have enough money, then the solution surely is that we must spend more, right?

Does that make any sense?  Of course it doesn’t.  It’s a recipe for disaster.

I’m proud that the Idaho Legislature didn’t fall into the trap that other states now are in – raising taxes and trying to spend their way out of deficits.  Even now, California is considering another round of tax hikes to reduce their staggering budget deficit.  Instead, your legislators and I worked together to make better, more efficient use of your money, and asking everyone to look at the bigger picture and a little further down the road.  As a result, Idahoans can rest assured that they won’t be taxed or regulated out of their businesses.

As America’s and Idaho’s economies turn around, opting for stability and predictability is proving to be the right path.  Meanwhile, businesses in Oregon, Washington, and California will not be as able to enjoy the rewards of a stronger economy as Idaho businesses.  Our companies will have a clearer path toward success as they pay less in overall taxes and keep enjoying our one-of-a-kind quality of life.

Take the example of Comtech AHA in Moscow, which made the shift across the Washington border five years ago.  The company moved just nine miles – from Pullman, Wash. to Moscow, Idaho – and saw immediate savings.  Bill Thomson, Comtech’s CEO, says the company saved in health insurance costs and workman’s compensation insurance.  In addition, the company pays less for Idaho’s corporate income tax versus Washington’s Business and Occupation tax.

Bill didn’t want to give up the quality of life that the Palouse region offers, and by making the shift across the border he didn’t have to.  He also knew that his semiconductor company – with customers such as FujiFilm and NASA – absolutely needed to be near a strong university with an engineering program, and the location near the University of Idaho sealed the deal.

I’m sure Bill’s 24 employees appreciate the fact that he did what was necessary to keep the company strong.  It’s a measure of employment security that many Oregon and Washington businesses can’t offer right now.

A Richland, Wash. company is doing well in its own market, but when it was looking for a place to expand, they chose Boise.  Paragon Corporate Housing/Paragon Home Furnishings opened an office in Boise a year ago because of Idaho’s friendly business climate and because it wasn’t too far away from its corporate office.  The Boise office has four full-time and two part-time staff and is likely to grow more in the coming year.

“Idaho is a very easy state to do business in,” said the company’s vice president of business development Doreen Compton, adding that Paragon’s CEO also was attracted to Idaho because of its reputation for being welcoming and supportive of its businesses.

I’m glad to hear that; it’s exactly the impression we’re trying to make.  We work hard to collect the taxes that are due according to the law, and we treat everyone fairly and equitably from a regulatory standpoint – focusing on educating and empowering rather than proscribing and punishing.

Once companies get here, they seem very happy to stay.

Take the example of Integrated Ideas and Technologies, which has found great success in Coeur d’Alene since moving here from Sacramento, Calif. 12 years ago.  The company, which sells aerospace components, started in Idaho with a 5,000-square-foot building and now has expanded to 23,000 square feet.  It remains in expansion mode and continues to hire, thanks in part to Idaho’s affordable cost of living and business-friendly environment.

There’s a reason we keep getting calls from our friends to the west, and why more than 100 Washington businesses representatives told me during a visit to Seattle recently that they are checking us out.  Doing business is a little bit easier over here, a fact that our Project 60 initiative is designed to highlight.

Now we’re making it even easier with a new Web site – www.justmaketheshift.com – that provides some cost comparisons with our neighbors and tips on making the move to Idaho.

As we’re telling Oregon, Washington and California employers who are weary of their states’ tax-and-spend (and then tax some more) policies, making the shift is well worth a look.

“We fell short,” said Chris Bass, who is sponsoring similar initiatives in Washington state, and has worked closely on Idaho’s ballot measures.  “It doesn’t look like we’re really going to be that close.”  Bass didn’t have a final tally on how many signatures were collected, because he was waiting for any late reports from people collecting signatures.  He said the initiatives received more support in northern Idaho, where the sponsor of all 17 initiatives, Alanna Grimm of Hayden, lives.  “We were a lot more effective in northern Idaho than in Boise and other parts of the state,” Bass said.  He said the next step for the group will likely be to present the signatures as a petition to state lawmakers to show support for changes to state law.

Initiatives favoring states’ rights, including measures that would prohibit federal mandates to buy specific health insurance plans and curb regulations on greenhouse gasses in Idaho, received the most support, according to Bass.  Those initiatives also received top billing by the group’s signature collectors.  “We tried to put the most important ones up front and the ones toward the end got less, except the presidential citizenship act didn’t get a lot (of signatures),” he said.  A plan to remove state penalties for midwives practicing without a state license, which Bass called a niche issue, also received less support, though he said many people signed all the initiatives.

Ballot initiatives are still being circulated in Washington and Oregon, which have July deadlines for signatures.  Bass is promoting nine initiatives in Washington, and said his group is having more success there.  “The grassroots network is a bit more tightly knit in Washington, where the word gets out a lot better than it does in Idaho,” he said.

An initiative that would allow public high schools to offer an elective Bible study class was also being circulated before the April 30 deadline to report signatures to county clerks.  The sponsor of that measure, Chuck Seldon of Boise, told IdahoReporter.com that the initiative was being used for educational purposes, and that he’s pursuing legislative action, rather than a statewide vote, to make changes to state law and policy.

Read IdahoReporter.com’s first story on the Idaho Freedom Initiatives here.

The Idaho Freedom Initiatives are a set of 17 initiatives that a volunteer group wants to get on the November ballot.  Two of the 17 proposals are similar to measures approved by lawmakers this year.  Supporters are no longer gathering signatures on a plan comparable to the Idaho Firearms Freedom Act, which would block federal regulations on guns made in Idaho.  Signatures are still being collected for a plan similar to the Idaho Health Freedom Act, which requires the attorney general to sue the federal government to prevent a mandate to buy health insurance.  The other initiatives currently circulating include plans that could thwart the federal government’s ability to regulate greenhouse gasses in Idaho and require presidential candidates to show their birth certificate to the Idaho secretary of state.

The 17 initiatives are sponsored by Alanna Grimm of Hayden, who also is a state coordinator for the conservative organization Campaign For Liberty.  Grimm declined to speak with IdahoReporter.com, instead letting Chris Bass, who leads a Washington state group advocating for similar initiatives and worked with Grimm on Idaho’s initiatives, comment on the plans.  Bass said there’s a reason why the group is calling for more than a dozen changes to state law.  “Maybe there’s one of those 17 that someone feels very passionate about,” he said.  “If you can create a large number of these, you have a greater opportunity of getting people to volunteer to get signatures for them because they feel like they’re accomplishing more.”  He also said voters interested in these issues are likely to support multiple initiatives.  “If they sign one, they’re generally disposed to signing all of them.”

Bass said he doesn’t know if any of the 17 initiatives will get the needed signatures by the end of the month.  The Freedom Initiatives groups in both Idaho and Washington are relying on people to visit their websites to print off the initiatives and collect signatures.  “It’s very grassroots driven,” Bass said.  “There are various places around the state where people are getting signatures, but no one’s reporting in how many they’ve gotten.”  Signatures need to be submitted to county clerks by the end of April to be counted.  Clerks have until the end of June to verify signatures and send them to the secretary of state’s office.

Hurst said he doesn’t expect any of the initiatives to end up on the ballot, unless there is a late push of signature collections.  “It doesn’t appear as though they’re going to make it,” he said.

Before every initiative is circulated for signatures, it receives a review from the Attorney General Lawrence Wasden.  His office raised several constitutional concerns about the Freedom Initiatives, writing that several of the proposals clearly violate the U.S. or Idaho Constitution.  The initiatives flagged by the attorney general include the birth certificate requirement for presidential candidates, as well as plans to require bringing home members of the Idaho National Guard who are deployed overseas and create a private currency exchange backed by gold or silver.  Many of those constitutional concerns stem from the Supremacy Clause, which states that the U.S. Constitution and federal laws trump state laws.

Bass said he disagrees with Wasden’s interpretation of the Supremacy Clause and the U.S. Constitution.  “In my opinion, the attorney general’s incompetent,” he said. Bass added that he thinks some Supreme Court decisions during the past 70 years misread the Constitution.  Prior court rulings are often a key factor in legal decisions and interpretations of the law.  “(Wasden)’s going along with B.S. reasoning because that’s what he was taught in law school,” Bass said.

Bass said the initiative requiring a birth certificate for presidential candidates is a response to the controversy surrounding President Barack Obama.  “It’s rather absurd that we require less of our president than we do of our Little League players,” he said.

Idaho voters have not approved a ballot initiative since 2004.  During that span, voters in Washington have approved six, Nevada voters five, Montana voters three, and Oregon voters two initiatives.  Utah and Wyoming have also not approved any voter initiatives since 2004.  Nevada and Washington voters both approved expanding bans on smoking tobacco, while Nevada and Montana approved increasing the minimum wage. State initiative laws and practices vary.  Washington and Oregon have historically had more initiatives on the ballot.  Both states let citizens to vote on initiatives and other ballot measures more often that Idaho, which allows them every two years during statewide elections.  Idaho’s two western neighbors also have a July deadline for collecting signatures.

Idahoans will also vote on four proposed constitutional amendments in November.  Three of them would allow public entities, including hospitals, airports, and electric cities, to issue bonds and incur debts.  The fourth would allow the University of Idaho’s Board of Regents to set tuition and fees.  Currently, the State  Board of Education has that power for U of I and other public universities and colleges.

Read more about the Idaho Freedom Initiatives at their website and the secretary of state’s website.

Gibbs, during his testimony before the committee, said that the fee hike would enable the state to create a pool of money for ongoing education and re-education for county coroners.  He added that because many coroners are involved with determining causes of death, their education must be kept current.  Gibbs also said that many counties are concerned that their coroners, due to lack of training, often contaminate crime scenes.

Idaho’s fee is level with many surrounding states.  Utah’s fee for one copy is $16, while Montana’s is lower than Idaho’s at $12.  Oregon and Washington have the highest rates in the region, charging $20 for the first copy.

Gibbs said the fee hike could generate as much as $50,000 in additional revenue for the state per year.

The committee voted unanimously to support the proposal and will hear more testimony on the matter in upcoming weeks.  A list of the fees for death certificates can be found here.