Idaho should get out of the workforce training business

Wayne Hoffman Articles

A bill quietly making its way through the Idaho Legislature would prolong a failed government program — and all the taxes that go with it. Born 20 years ago, the Workforce Development Training Fund is supported through the unemployment insurance taxes paid by businesses in Idaho. Money goes into the fund, and then spent largely to help train or retrain workers for certain jobs and professions.

Lawmakers have always included a kill switch in the authorization for  the Workforce Development Training Fund. At least every five years, the Legislature is required to re-evaluate the program. But the evaluations have been, shall we say, largely nonexistent, even though businesses that receive money from the fund sometimes just go out of business or leave the state.

In 2012, after a lot of prodding and IdahoReporter.com’s investigative journalism, the Department of Labor finally agreed to review the program. The conclusion: The Workforce Development Fund is astonishingly only 40 percent effective. In other words, for every four dollars going into the program, another six was pure waste.

When the Department of Labor released its findings, it offered praise for the program and continued the narrative of the agency’s longtime director, Roger Madsen, that the training fund is “one of Idaho’s most valuable economic development incentives for more than a decade.”

Madsen’s replacement, Department of Labor Director Ken Edmunds, has tried to clean up the program and tie its expenditures to specific state workforce development objectives. Senate Bill 1288 codifies some of what Edmunds is attempting to do. But HB 1288 still allows taxpayer handouts to business, largely at the department’s discretion. Equally important, the training fund was set to expire in 2018; the bill winding its way through the Legislature extends the program’s life to 2022.

The program is often described as a tool to keep businesses operating and to help meet industry workforce training goals. In reality, it’s simply a government-giveaway to lucky companies that are mostly big businesses. In other words, the program performs a reverse Robin Hood in which small employers, who pay into the pot just the same as large employers, help underwrite the workforce training objective of companies that have more money, more employees.

Sen. Cliff Bayer, R-Boise, pointed out during debate a few days ago on the Senate floor, that the program, even in its rewrite, still does not contain a clawback provision. That is, the state still won’t be able to recover workforce training funds when a business uses the program then flees the state.

If the Workforce Development Training Fund were to go away, as planned, in two years, taxes paid by Idaho businesses would go down. Businesses would actually have more money in their accounts to, you know, train employees. But, the state apparently can’t allow businesses to make their own workforce training investments and decisions, thus Senate Bill 1288.

Fund Director Edmunds truly wants to fix a broken program, and he deserves accolades for the work he’s doing at the Department of Labor. But the best way to fix the Workforce Development Training Fund is to let it fade away, let businesses spend their money as they deem fit, and get government out of the workforce training business.