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Idaho changing key business incentive fund

Published June 24, 2014 5:48 pm

Training • Part of reforms undertaken to help state recoup money when aided companies fold.
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Boise • Idaho officials announced Tuesday they will change how they award a top incentive to attract businesses, a program some criticize as lacking safeguards to recoup state money when companies close.

A series of reforms to the workforce development training fund will change how much a company can be reimbursed for training employees, among other things, Gov. C.L. "Butch" Otter and Idaho Department of Labor Director Ken Edmunds said.

Businesses still won't be penalized if they have to close or leave the state shortly after receiving taxpayer-funded grants, but now they can receive a bigger reimbursement if they get high marks in six key employment areas, Edmunds said.

"We can't guarantee the success of anyone, all we can do is bet on faith," Otter said. "I would be the first to admit personally that maybe, you know, that we were so desperate in the past that we let our faith override our wisdom. And we're correcting on that."

Since its inception in 1996, business recruiters have argued that the workforce training fund is the best tool Idaho has to attract out-of-state companies looking to expand or relocate. Critics counter that companies do not face any recourse if they close or move out of state soon after receiving public money.

Under the changes, the original eligibility criteria will remain the same, but high scores in the six evaluation areas can lead to larger reimbursements.

For example, companies will receive as much as $4,500 per employee if they offer academic credentials and pay higher wages in jobs requiring skills that can be easily transferred to another company. The minimum a company could receive is $2,000 per employee.

"At the end of the day, Idaho's economic health will be determined by its workers," Edmunds said.

To qualify for reimbursements, companies must provide health care, pay at least $12 an hour to employees who received training funded by the state, and sell their goods or services outside Idaho. Generally, money must be used within two years. It's collected from unemployment insurance taxes that businesses pay the state.

A major reason requirements are changing follows lessons learned when Greek-yogurt producer Chobani moved to south-central Idaho in 2012, Otter said.

State officials worked with the company to study what skills to teach to Idaho workers for use in Chobani's factory and other production facilities, he said.

In the past, the fund may have been used to help just one company, Otter said. But after working with Chobani, state officials decided the fund should be used to help workers be more appealing to other employers.

Chobani, which employs nearly 500 workers, has received $3.3 million from the workforce fund to help train 845 new employees. Earlier this month, Chobani officials announced they were laying off 42 temporary and permanent workers.

"With sins in the past already looked at and change in the future, we have a good program moving forward," Otter said.




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