Senate

Bill 1288
2016 Freedom Index Score (-1)
Analyst: Wayne Hoffman
Date: February 25, 2016

ANALYSTS NOTE: Senate Bill 1288 makes several changes to the operation of the workforce
development training fund. The fund is subsidized by a 3 percent offset on unemployment insurance
payments made by Idaho employers. The program has been criticized in recent years for lack of
effectiveness. The Department of Labor published a report a few years ago, after much prodding by the
Idaho Freedom Foundation, which showed the program was 40 percent effective. A number of workforce
grants were given to companies that later went out of business. SB 1288 attempts to articulate a
different approach for spending the funds. Notably, instead of being used to try to "upgrade the skills of
currently employed workers at risk of being permanently laid off," the bill calls for funding "innovative
training solutions to meet industry specific workforce needs or local challenges."

That language is vague and open to a great deal of imagination. However, the most important issue is,
since its inception in the 1990s, the tax assessment has operated under a five-year sunset provision, and
has been extended consistently whenever it neared expiration. This bill moves the sunset deadline from
2018 to 2022. If left to expire, unemployment taxes for Idaho businesses would drop.

Point No. 5: Does it directly or indirectly create or increase any taxes, fees, or other assessments?
Conversely, does it eliminate or reduce any taxes, fees, or other assessments.

ANALYSIS: Senate Bill 1288 extends the life of the workforce-development-fund unemployment-
insurance tax. (-1)