One of Idaho’s only business incentive programs is getting a facelift.
Emilie Ritter Saunders explains the nearly 20-year-old program was meant to lure businesses to the state, now, that focus is changing.
Idaho’s Workforce Development Training Fund launched in 1996. As its name suggests, it rewards companies for broadening its employees’ skills.
What you might not gather from the name is that the fund has been scrutinized over the last few years after companies received millions from the state, and then closed.
At a press conference announcing changes to the program, Governor Butch Otter acknowledged the state should focus less on corporations and more on people.
Otter: “I’d be probably the first to admit personally, that maybe you know, there have been times that we were so desperate that we let our wisdom , or our faith, override our wisdom. And we’re correcting on that.”
An internal audit of the program in 2012 found it was effective less than half of the time.
Our own analysis found that at least a dozen companies that received training grant reimbursements laid off their Idaho employees and left the state. That includes big names like Transform Solar and Four Star XL Beef
Under the state’s revamped workforce development training fund, it will still reimburse businesses for training new employees or employees they would have laid off unless they got more training. But now, there’s a complex reimbursement matrix that incentivizes companies for --- among other things -- paying wages above $12 an hour.
The company can also qualify for larger reimbursements based on their industry’s economic multiplier effect, transferability of the skills they teach workers, and workers’ education.
But like the old version of the program, the new one still won’t include a so-called “clawback provision” requiring the business to return its grant money in case they do close or lay off workers. Idaho Labor Department director Ken Edmunds says that shouldn’t matter…
Edmunds: If we handle the program the way we intend, and have the accountability we intend, and create the transferable skills, it’s irrelevant want the company does because people are very mobile. We want a skillset with these people, where it doesn’t matter what the company does.”
Edmunds adds the program will now reward companies for instituting structured apprenticeship programs and certificates.
The grants are paid for by a portion of the state’s unemployment insurance tax, which most businesses pay into.
To date, the state has cut reimbursement checks to about 200 companies totaling $43 million.
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