House committee chairman calls for probe of Workforce Development Fund

Rep. Tom Loertscher, R-Iona, believes the state's Workforce Development Fund should be analyzed to determine the impact it is having and the cost of the program.
Rep. Tom Loertscher, R-Iona, believes the state's Workforce Development Fund should be analyzed to determine the impact it is having and the cost of the program.

A veteran Idaho lawmaker is calling for the Legislature to conduct a thorough probe of a business subsidy program that pays out millions of dollars for worker training.

Rep. Tom Loertscher, R-Iona, chairman of the House State Affairs Committee, wants his colleagues to examine the Workforce Development Fund, which the Idaho Department of Commerce and the Idaho Department of Labor use to entice businesses to set up shop in the Gem State.

“We’re short on the impact of whether it’s negative or positive,” Loertscher told IdahoReporter.com. “That’s why we need to have a thorough look at it.”

The program pays subsidies to businesses for worker training, provided that the companies meet certain conditions set forth by the state. Businesses must pay more than $12 an hour and offer benefits. The subsidized positions also must be for new jobs or retraining workers to avoid layoffs.

While the program certainly comes with success stories, it’s also seen its share of failures. Here’s a quick rundown of some of the losses:

• $880,000 invested in an H.J. Heinz plant in Pocatello.
• $1.7 million for Transform Solar in Nampa.
• $650,000 for a failed polysilicone plant in Pocatello.

There has been at least one study of the program’s effectiveness and the results weren’t pretty. The Idaho Department of Labor revealed in an October 2012 report that at least 52 of the 160 contracts that have been handed out since the program’s 1996 inception were deemed ineffective.

The agency regarded only about 40 percent of the contracts as “effective.”

While the program is often hailed by state leaders as eminently successful, Loertscher thinks a deeper dive into the data is needed to decide if the subsidies should continue to flow. “All too often, we as legislators pass things and then we don’t go back and look at them,” he said.

What if legislators find successes and failures? How much waste of taxpayers’ dollars will lawmakers stomach? Those are important questions, Loertscher said.

“Are those losses justified or not?” Loertscher asked. “What levels are acceptable? Maybe you’re not doing your stewardship right.”

Another veteran lawmaker, Rep. Steve Hartgen, R-Twin Falls, agrees that a review of the program would be beneficial for legislators and taxpayers. That’s important because Hartgen chairs the House Commerce and Human Resources Committee, the panel that would likely conduct such a probe.

“It is something I would support,” he said. Hartgen has voiced support for the Workforce Development Fund on several occasions.

Loertscher and Hartgen differ in their reasoning for supporting a probe. Loertscher wants verification that the government is using tax dollars wisely and not wasting any, while Hartgen wants to ensure that businesses have all the tools—and cash—they need to grow jobs in Idaho.

“That’s our job as legislators,” Hartgen said, adding that lawmakers should “turn over every rock” in the perpetual search for new jobs to come to the state.

Loertscher isn’t the first lawmaker to call for additional oversight of the program, but joins a growing list of names who would like a probe. Last year, Sens. Chuck Winder, R-Boise, and Cliff Bayer, R-Boise, told IdahoReporter.com that they would support a thorough review of the program. Rep. John Vande Woude, R-Nampa, has also voiced support for a review.

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