Introduction

This analysis examines the Business Incentive Manual 2020 published by the Idaho Department of Commerce, providing critical evidence that substantiates our overall findings regarding the state's economic development priorities. The manual, with its very title, reveals a fundamental truth about Idaho's approach: it is designed to attract and retain large businesses, not support existing small enterprises.

The term "incentive" itself is telling. Small businesses, which form the backbone of Idaho's economy, don't need incentives---they need support. The use of this term clearly indicates that the manual's target audience is large corporations, particularly those from out of state, who might need persuasion to choose Idaho over other locations. This aligns directly with the Mercatus Center's research, which shows that states often compete in a "race to the bottom" with incentives, despite their limited effectiveness in actually influencing business decisions.

The "Business Incentive Manual 2020" is an extensive document, comprising 270 pages and approximately 80,000 words. Its sheer size dwarfs other strategic documents we've analyzed, underscoring its central role in Idaho's economic development efforts. This manual represents the most comprehensive and up-to-date overview of Idaho's state-level economic development approach available at the time of this analysis.

The manual details 14 distinct incentive programs, ranging from tax credits and exemptions to grants and specialized financing options. These programs collectively form the backbone of Idaho's economic development toolkit. However, as our analysis will show, these tools are overwhelmingly designed for and beneficial to large businesses, with any benefits to small businesses being incidental at best.

This detailed examination of the Business Incentive Manual is particularly crucial because it's where "the rubber meets the road" in terms of economic development policy. While strategic plans and annual reports may articulate lofty goals and aspirations, it's the incentive programs that drive real behavior and demonstrate where the state is truly investing its resources. The disparity between the state's rhetoric about supporting small businesses and the reality of these incentive programs is stark and telling.

In the following analysis, we will dissect each of these incentive programs, demonstrating how they collectively result in a system where virtually 100% of the state's economic development efforts are focused on larger businesses. This leaves the majority of Idaho's businesses---those with fewer than 20 employees, which account for 54.9% of all private-sector employment---effectively overlooked and unsupported by the state's primary economic development initiatives.

This misalignment between economic reality and policy focus is not merely imbalanced; it represents a fundamental disconnect in how the state approaches economic development. By scrutinizing this manual, we aim to bring this critical issue to light, fostering a constructive dialogue about creating a more balanced and effective approach to economic development in Idaho---one that truly serves all segments of its diverse business landscape.