Gregoire pits her tax hikes against Idaho

Governor Butch Otter of Idaho welcomes Washington raising taxes, which the Legislature did yesterday. He put out the welcome mat for businesses fleeing tax increases and bad environment for business.

Was he ready for Christine Gregoire putting on the gloves? But, as we see below, her final punch is that's "simply not fair."

Otter's "love letter to our neighbors:"

It’s true that a rising tide lifts all boats. But how those boats are handled makes a big difference when the tide is out and the waters get rough.

State governments across the country are dealing with the continuing national recession in different ways. In Idaho, our focus is on stability. Predictable tax and regulatory policies are what our employers need in order to maintain their operations through this rough patch, and it’s what employers elsewhere are looking for when they consider expanding or relocating.

Other states, however, have chosen some interesting and in my view counterproductive approaches. Last month, for example, Oregon voters approved their legislature’s decision to raise taxes on the wealthy and on many businesses by $727 million. The immediate result was that my phone started ringing – and so did phones over at our Department of Commerce. It seems that word has spread about our Project 60 initiative, and that we are open for business, including theirs!

The businesses that have called are emotional about this subject, and they have every right to be. Rising costs – especially during a recession – could put some employers out of business, or at least prompt layoffs. More than 2,000 Oregonians joined a Facebook group to protest the tax increase and commiserate about the repercussions. No less an Oregon business icon than Nike’s Phil Knight calls it “Oregon’s Assisted Suicide Law II.”

Legislators in the state of Washington are talking about even bigger tax increases to tackle a budget deficit that figures to be as big as Idaho’s entire State budget. Businesses in both states are like those in Idaho; they are facing the most challenging times in decades, and even incremental cost increases can mean the difference between surviving and closing up.

The problem in Oregon is that folks were convinced that state government was what needed to be shored up rather than the jobs- and revenue-producing private sector for which state government is supposed to work. As a result, they’re chasing some of their cash cows to the border. And I welcome those businesses with open arms.

We now are reaching out to hundreds of Oregon businesses, and will do the same with those in Washington if the legislature there follows Oregon’s lead. We aren’t offering many bells and whistles, but what we can offer is a business-friendly State government, a highly qualified and motivated work force, and communities where people understand that while government cannot be the solution to their problems it can and must be a champion for their own solutions. [...]

Christine Gregoire fights back using her favorite tool: Forbes Magazine. Quoted at Seattle Times Politics NW blog:

"I'm not an expert on Idaho," Gregoire said, but then rattled off from notes several observations about Idaho's tax and business climate. "It looks like they have a corporate tax of 7.6 percent, a sales tax of 6 percent, an income tax ranging from 1.6 to 7.8 percent," she said.

"And let's talk about Forbes' ranking," Gregoire said, referring to her favorite magazine's annual rankings of state business climates.

"We're now the second best state in the country and they went from seventh to 11th. They're going down in the rankings. Regulatory environment we're ranked 5th, they're ranked 35th. You get my point?"

Gregoire said she had a call in to Otter's office. "So I intend to say to the governor, you know, I'll go recruit companies that you have in your state. Everything is fair game," she said. "But to suggest that somehow there is this massive tax going on in my state that puts my business to a detrimental level compared to yours is simply not fair."

If she is such a big fan of Forbes Magazine she might read it and learn about what makes the economy grow. One example: lowering taxes so you can compete with your competitors - other states.