Workforce Development Training Fund spends millions, but value of program unknown

Workforce Development Training Fund spends millions, but value of program unknown

by
Mitch Coffman
May 30, 2012
Mitch Coffman
May 30, 2012

Eligible Idaho companies can obtain dollars for employee training from the Workforce Development Training Fund, up to $2,000 per new full-time job created or up to $3,000 can be authorized per new job created in rural counties.

Businesses that meet requirements must sell the bulk of their product or service out of the region where they are located, which brings in new money. The training funds can go to a company expanding or relocating in the Gem State.

That sounds like a great way for businesses to keep workers employed and fully trained. And for businesses to expand or move to Idaho. But does it work?

The Idaho Department of Labor (IDL) certainly thinks so; it is expanding the program. The funds are available until unemployment in Idaho falls to 7 percent or less. Idaho unemployment is currently hovering around 8 percent.

The fund has over $16 million, with $13.7 million of it already obligated to the program, according to Dwight Johnson, assistant deputy director for the labor department.

That leaves a surplus for the department to use as an additional resource. On May 8, the Workforce Development Council approved the use of the money without any nay votes.

Bob Fick, spokesman for the labor department, was asked about the fund and if there is a study showing the program is producing positive results. The short answer is yes, but the study was done in 2005 and there hasn’t been one since.

Fick then referred IR to Johnson. In an email, Johnson said that “The department is currently in the process of reviewing the performance of the Workforce Development Training Fund program and will be pleased to share the results of that study when it is concluded this summer.”

The workforce website has an evaluation section and an impact on employment section, but apparently no provision for reporting results on an annual basis.

Under the evaluation section, a business applying for funds must list the number of people trained, the cost and the number of trainees either placed or retrained.

Under the impact on employment section, the overriding question centers on employment. How many jobs will be created if the company is looking to expand, how many retained if the goal of the funding is to prevent layoffs?

On May 21, IR asked Johnson about the rationale for expanding the program before the results of the current study are calculated. There has been no response from the department or Johnson.

During his brief overview of the program for the Workforce Development Council, Johnson said that since the program was started in 1996 it has served 26,000 employees across the state, with an average cost of $2,400 per employee. The program is funded with a percentage of unemployment insurance collections.

Rep. Marv Hagedorn, R-Meridian, said in an email to IdahoReporter.com, “Business pays that portion of the insurance just for that cause. They should be spending it for such, but it is prudent to do a study that can show if (business) is getting their bang for the buck. That money (the remaining funds in the program) should be spent on retraining the unemployed for currently available jobs. That's what it's intended for.”

According to the state’s workforce website, urban businesses are required to create a minimum of five new jobs to qualify for the program. By contrast, rural businesses can receive training assistance for as few as one new worker. If a business has a collective bargaining agreement, the union involved must agree to the business accepting the training dollars.

In addition, the jobs generated or supported by the training program are obligated to pay a beginning wage of at least $12 an hour, plus provide employer-assisted medical benefits. Training on average lasts 12 months but can be extended to 24 months if necessary.

Note: Wayne Hoffman, executive director of the Idaho Freedom Foundation, contributed to this story.

Idaho Freedom Foundation
802 W. Bannock Street, Suite 405, Boise, Idaho 83702
p 208.258.2280 | e [email protected]
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