Study Says Idaho Wouldn't Have to Subsidize Oregon Counties if They Join Idaho

February 24, 2023

"BOISE - An analysis of the economics of the Greater Idaho movement proposal, which seeks to make select Oregon counties part of Idaho, has been released by conservative think tank Claremont Institute.

The study finds that although Oregon’s spending per resident in northwestern Oregon is comparable to its spending per resident in eastern & southern Oregon, high-income areas around Portland end up carrying almost all of the state’s tax burden, due to Oregon’s income tax funding the bulk of its government.

This study found that eastern and southern Oregon are a drain on Oregon’s state budget, but would be a benefit to Idaho’s state budget. This is because both eastern Oregonians and southern Oregonians have almost exactly the same per person personal income as Idahoans, but the income of northwestern Oregonians is much higher, according to recent US government BEA figures.

The 99-page report predicts that, under Idaho’s lower taxes and regulation, the economy of eastern and southern Oregon would surge, providing a big benefit to Idaho’s state budget. The benefit to Idaho’s budget of adding eastern & southern Oregon would be $170 million annually, according to the Claremont Institute study, assuming Idaho were to leave Oregon’s weight-mile tax on road freight in place in that area (Idaho itself does not have such a tax). Yet, the average resident in northwestern Oregon sends $360 in taxes to subsidize southern and eastern Oregon every year, according to the same study, or $690 per wage-earner.

The study, which began in 2021, analyzed the impact of adding both eastern and southern Oregon to Idaho, although the Greater Idaho movement in May revised its proposal to not include southwestern Oregon, until public opinion there embraces the idea.

Organizers behind the Greater Idaho movement say they welcome the study but pointed out that, although the study demonstrated reasons that eastern and southern Oregon’s GDP would grow by 2.1% due to a border relocation, the study acknowledged that the actual growth could be higher. “Lastly, it is important to note that there are any number of economic possibilities that could result from the border relocation. Our effort with this analysis is to tabulate those which we can quantify and defend," said a Greater Idaho statement.

The study cited several economic benefits to eastern and southern Oregon of joining Idaho, such as lower taxes, lower unemployment, and a lower cost of living.

The movement’s statement responded to the study’s comments on debt by pointing out that Oregon’s state government has much more assets than debt, according to a tabulation by Truth in Accounting/University of Denver. In fact, the net assets of Oregon’s state government per resident are almost exactly equal to those of Idaho. Therefore, if eastern Oregonians brought their share of their state government’s assets and debts into Idaho, they would hardly change Idaho’s per-person net assets.

The Claremont Institute study did not guess at what Idaho would agree to pay for eastern Oregon because it would be entirely negotiable, and it would depend on which Oregon state assets and debts Idaho and Oregon agreed to transfer to Idaho. Less than three percent of eastern Oregon is state land; it is mostly federal or private land.

The analysis was performed by Points Consulting, an economic analysis firm based in Moscow, Idaho that has completed more than one hundred economic analyses over the last decade. Dr. Michael A. Shires, Vice Dean at Pepperdine University, was co-lead on the study.

Matt McCaw, the movement’s spokesman, said “we are asking Oregon Senate President Rob Wagner to give this proposal a hearing. It’s a win-win for both states, and a poll a year ago showed that 68% of northwestern Oregonian voters want it to have a hearing.”

Read the full article on: Big Country News

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