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House Bill 504 — State employees, ed reimbursement

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House Bill 504 — State employees, ed reimbursement

Parrish Miller
February 2, 2022

Bill Description: House Bill 504 would massively expand a redistributive program to reimburse government employees for educational expenses. 

Rating: -5

Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?

House Bill 504 repeals and replaces Section 67-5339, Idaho Code, to convert the limited "loan repayment program" for "eligible physicians, psychologists and mid-level practitioners at state hospital north and state hospital south" to an unlimited "educational reimbursement program" that state agencies could make available to virtually all of their employees.


The existing "loan repayment program" includes statutory limits "not to exceed" $75,000 over 4 years for eligible physicians and $50,000 over 4 years for eligible psychologists and mid-level health practitioners. House Bill 504 eliminates these limits and allows for state agencies to provide reimbursements of the "costs incurred for undergraduate, graduate, or medical school programs." In other words, the program could be open to state employees regardless of what field of study or degree they would pursue. These costs could easily run into hundreds of thousands of dollars for each employee depending on what degrees they obtain and where they obtain them. Any other limits are optional and set by the employing agencies themselves. 

The replacement statute also halves the number of hours employees must work to qualify for the program from 2,080 hours (one year of full-time work) to just 1,040 hours. 


Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?

The vast "educational reimbursement program" created by House Bill 504 would give state agencies the ability to compete unfairly with the private sector by allowing the state to offer a massive taxpayer-funded benefit which most private businesses cannot compete with. 


Does it increase government redistribution of wealth? Examples include the use of tax policy or other incentives to reward specific interest groups, businesses, politicians, or government employees with special favors or perks; transfer payments; and hiring additional government employees. Conversely, does it decrease government redistribution of wealth?

Put simply, yes, the "educational reimbursement program" created by House Bill 504 would redistribute wealth from taxpayers to the government employees receiving education subsidies. Without any statutory limits on either this program or the growth of agency budgets, it is not unrealistic to foresee this program costing tens of millions of dollars within the near future. 


Does it increase government spending (for objectionable purposes) or debt? Conversely, does it decrease government spending or debt?

House Bill 504's fiscal note attempts to obfuscate the potential cost of this massive expansion of government by claiming there will be "no impact on the state's General fund or any dedicated fund or federal fund because agencies making educational reimbursement awards to eligible state employees must use existing budget appropriations to cover the cost of program participation."

This is not an accurate characterization of how the budget appropriation process works. When an agency makes its budget request, it does so incorporating all its costs of operation, including special benefits such as the proposed "educational reimbursement program." Should this program be instituted, future agency budget requests will grow as needed to cover the high costs of this new program. 


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