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Idaho tries to lure California firms – State campaign touts potential savings

State officials are trying to lure some businesses by showing them how much better the bottom line could be here.

Associated Press The Spokesman-Review

Idaho has kicked off an advertising campaign targeting California business leaders how much they could save if they moved or expanded to this state.

The ads, financed with just a portion of the state Commerce Department’s $120,000 economic development budget, have been running in the California editions of the Wall Street Journal and business journals in California’s major cities.

If the ads help lure a business to Idaho, the taxes paid will more than make up for the cost of the campaign.

Idaho estimates businesses pay $2,546 a year per person in state and local taxes. That means a new company with 50 employees would spend annual taxes of $127,300, not to mention the wages earned by those new employees and the money they would spend in the local community.

An April survey of 400 business leaders by the California Chamber of Commerce found that one-fifth planned to expand or relocate out of state. Fifteen percent reported being actively courted by other states.

"It’s consistently a high-cost state to do business in," said Jay Engstrom, economic development administrator with the Idaho Department of Commerce.

His agency said Idaho beats California in every category of business expenses, from electricity prices to overall business costs.

In the area of workers’ compensation costs, an electronics company in Idaho employing 200 people will pay about $40,000 a year, while a similar company in California will pay more than $445,000.

California’s tax rate is 24 percent higher than the national average, and workers’ compensation rates have increased fourfold since 1999, Idaho officials point out. California has an $8 billion deficit and the lowest credit rating in the nation.

In January, Buck Knives announced it was moving its headquarters and manufacturing operations to Post Falls from its current location in El Cajon, Calif. That move, scheduled to be completed in 2005, will bring more than 200 jobs. The company was formed in California more than 50 years ago.

"In California, we were having a hard time being profitable and still being competitive with all the competition in the outdoor knife market," Chairman Chuck Buck said.

But Idaho is not alone in its efforts. Oregon and Nevada have launched advertising campaigns, too. Nevada is spending $650,000, nearly six times more than Idaho has to spend on its entire economic development efforts for the current.

http://www.spokesmanreview.com/news-story.asp?date=110503&ID=s1434723&cat=section.business

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