{"id":8312,"date":"2012-06-25T08:00:43","date_gmt":"2012-06-25T14:00:43","guid":{"rendered":"http:\/\/stateimpact.npr.org\/idaho\/?p=8312"},"modified":"2012-09-06T08:12:30","modified_gmt":"2012-09-06T14:12:30","slug":"companies-receive-idaho-training-grants-but-make-no-long-term-promises","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/idaho\/2012\/06\/25\/companies-receive-idaho-training-grants-but-make-no-long-term-promises\/","title":{"rendered":"Companies Receive Idaho Training Grants, But Make No Long-Term Promises"},"content":{"rendered":"<div id=\"attachment_8350\"  class=\"wp-caption module image center\" style=\"max-width: 620px;\"><a class=\"fancybox\" title=\"Employees leave the XL Four Star Beef plant in Nampa in 2011 after the company announced plans to shut the plant down and layoff 522 people.\" href=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/Idaho-Statesman-_-Chris-Butler.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-large wp-image-8350\" title=\"XL Four Star Beef \" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/Idaho-Statesman-_-Chris-Butler-620x418.jpg\" alt=\"\" width=\"620\" height=\"418\" srcset=\"https:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/Idaho-Statesman-_-Chris-Butler-620x418.jpg 620w, https:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/Idaho-Statesman-_-Chris-Butler-300x202.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/a><p class=\"wp-media-credit\">Chris Butler \/ Idaho Statesman<\/p><p class=\"wp-caption-text\">Employees leave the XL Four Star Beef plant in Nampa in 2011 after the company announced plans to shut the plant down and layoff 522 people.  XL Four Star received $564,231 in training fund grants.<\/p><\/div>\n<p>Last month, Transform Solar\u00a0<a title=\"Volatile Solar Industry Leads To Layoffs In\u00a0Idaho\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/31\/volatile-solar-industry-leads-to-layoffs-in-idaho\/\" target=\"_blank\">announced that it was closing<\/a>\u00a0and laying off about 250 people at its facility in Nampa. As <em>StateImpact<\/em> reported, the manufacturer of high-tech solar cells, had received\u00a0<a href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/06\/01\/update-transform-solar-received-1-68-million-in-state-training-grants\/\" target=\"_blank\">$1.68 million in workforce training grants<\/a>\u00a0from the state of Idaho &#8212; money that the company will not have to pay back.<\/p>\n<p>It&#8217;s not the first time that&#8217;s happened. Eleven companies that have received more than $5.3 million in <a title=\"Understanding Workforce Development Training Grants\" href=\"http:\/\/stateimpact.npr.org\/idaho\/topic\/workforce-training-grants\/\" target=\"_blank\">training grants<\/a> from the Idaho Department of Labor since 1996 no longer exist in the state.\u00a0 That&#8217;s according to data from the department and <em>StateImpact<\/em>&#8216;s analysis. <!--more--><\/p>\n<p>The 11 companies are a combination of out-of-state businesses that no longer operate here and local companies that shut down a piece of their businesses.\u00a0 The department confirmed these companies are no longer in operation and calls were made to each for additional clarification.\u00a0 Many of those calls rang to disconnected numbers.<\/p>\n<p>[spreadsheet key=&#8221;0AiLU6Cs5LWZIdHQxQU9OcnE2bEVEVlh1aTRfU2hHb2c&#8221; source=&#8221;Idaho Department of Labor&#8221; sheet=0 filter=0 paginate=0 sortable=1]<\/p>\n<p class=\"source\">* JR Simplot Co. closed its Heyburn, Idaho, potato processing facility which received this money<\/p>\n<p class=\"source\">**Transform Solar isn&#8217;t officially closed yet, it announced it would be shutting down over the next two months<\/p>\n<p>Recipients of workforce development training grants <a href=\"http:\/\/www.legislature.idaho.gov\/idstat\/Title72\/T72CH13SECT72-1347B.htm\" target=\"_blank\">aren&#8217;t required to return the money<\/a> in the event of layoffs or closure.\u00a0 &#8220;There is no clawback,&#8221; says Department of Labor contract manager Jenny Hemly.\u00a0 &#8220;At the time we&#8217;re going into the contract, the business is doing well.\u00a0 They&#8217;re growing, they&#8217;re creating jobs. So we want to go in and support that effort.&#8221;<\/p>\n<div class=\"related-content alignleft\"><h4 class=\"related-header\">Related<\/h4><div class=\"links\"><h5>Posts<\/h5><ul><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/06\/26\/clawbacks-in-connecticut-what-idaho-could-learn-from-how-one-state-handles-breaks-for-business\/\">Clawbacks In Connecticut: What Idaho Could Learn From How One State Handles Breaks For Business<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/07\/tracking-idaho-workforce-training-grants\/\">Tracking Idaho Workforce Training Grants<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/06\/01\/update-transform-solar-received-1-68-million-in-state-training-grants\/\">Update: Transform Solar Received $1.68 M In State Training Grants Before Announcing Layoffs<\/a><\/li><li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/02\/do-business-incentives-create-jobs-idaho-is-one-of-13-states-in-the-dark\/\">Do Business Incentives Create Jobs? Idaho Is One Of 13 States In The\u00a0Dark<\/a><\/li><\/ul><\/div><div class=\"topics\"><h5>Topics<\/h5><p class=\"topic\"><img class=\"alignleft\" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/WelderHandsCU_Small.jpg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/idaho\/topic\/workforce-training-grants\/\">Understanding Workforce Development Training Grants<\/a><\/p><\/div><\/div>\n<p>In the 16-year life of Idaho&#8217;s <a title=\"Understanding Workforce Development Training Grants\" href=\"http:\/\/stateimpact.npr.org\/idaho\/topic\/workforce-training-grants\/\" target=\"_blank\">Workforce Development Training Fund<\/a>, about 200 businesses have been reimbursed more than $38 million to train their employees.\u00a0 <a title=\"Tracking Idaho Workforce Training Grants\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/07\/tracking-idaho-workforce-training-grants\/\" target=\"_blank\">Those companies<\/a> range from airlines and agricultural producers to retail and high-tech industries.<\/p>\n<p>From a disclosure standpoint, the grant program is Idaho&#8217;s <a title=\"Do Business Incentives Create Jobs? Idaho Is One Of 13 States In The\u00a0Dark\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/02\/do-business-incentives-create-jobs-idaho-is-one-of-13-states-in-the-dark\/\" target=\"_blank\">most transparent<\/a> economic development incentive. Which companies are being reimbursed for training and how much a specific contract is worth is <a title=\"Tracking Idaho Workforce Training Grants\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/07\/tracking-idaho-workforce-training-grants\/\" target=\"_blank\">public information<\/a>.<\/p>\n<h3>No Follow-Up<\/h3>\n<p>But the department doesn&#8217;t go through a regular check-up of companies that have been reimbursed for training costs.\u00a0 Do they still exist? Are those grant-trained employees still working at the company?<\/p>\n<p>Hemly says because the program operates by reimbursing approved companies for their costs, she doesn&#8217;t follow up with the business once the state&#8217;s check has been signed.\u00a0 &#8220;At the point in time we did the <a href=\"https:\/\/www.documentcloud.org\/documents\/370541-1draft-updated-wdtf-contract.html\" target=\"_blank\">contract<\/a>, they had a need and we wanted to step in and assist,&#8221; Hemly says.\u00a0 &#8220;It&#8217;s all in good faith on everyone&#8217;s part.&#8221;<\/p>\n<p>Hemly says the department does keep track of all the employees that have received training through this grant and periodically will follow up with them to determine if they&#8217;re still employed at the same company. The last time the department did that was in 2005.\u00a0 It&#8217;s planning a similar internal audit of the program this year.<\/p>\n<h3>Closing Up Shop<\/h3>\n<p>According to the 2005 data, grant recipients retained, on average, 76 percent of their employees.\u00a0 But some of those businesses have closed their Idaho operations.\u00a0 According to the Labor Department&#8217;s own data, ABC Banking, Inc. closed after being reimbursed $90,618 in training costs.\u00a0 A company called Medinex closed after being reimbursed for $69,396 in state training grants.<\/p>\n<p>Last year, XL Four Star Beef, Inc. shuttered its doors and <a href=\"http:\/\/www.idahopress.com\/news\/article_5fafddf6-626e-11e0-9355-001cc4c03286.html\" target=\"_blank\">issued 522 layoff notices<\/a>.\u00a0 The Nebraska-based beef plant was reimbursed for $564,231 in training costs two years before it announced it was leaving Idaho.<\/p>\n<div class=\"module aside left half\">\n<h3>Workforce Development Training Fund Background<\/h3>\n<p>The <a href=\"http:\/\/labor.idaho.gov\/publications\/workforce_training_fund.pdf\" target=\"_blank\">Workforce Development Training Fund<\/a> started in 1996 as a way to encourage businesses to expand in Idaho or relocate from another state.\u00a0 The training dollars are used to help businesses train existing employees in danger of layoff or on-board new workers.<\/p>\n<p>Most businesses in the state contribute to the fund.\u00a0 Three percent of the unemployment insurance tax paid by employers is set aside for the pool of grant\u00a0money.<\/p>\n<p>In order to qualify for the training grants, businesses must pay their employees at least $12 an hour and provide health benefits.\u00a0 Companies in urban areas must create a minimum of five new jobs.\u00a0 Rural businesses must create one in order to qualify.<\/p>\n<p>To be eligible, companies must generate at least half of their revenue from products or services sold outside of Idaho, or be in the health care sector.<\/p>\n<p><\/div><br \/>\nWhile the Labor Department manages day-to-day management of the training grant program, policy direction and oversight comes from Idaho&#8217;s <a href=\"http:\/\/labor.idaho.gov\/publications\/AgencyInfo\/IWDC.pdf\" target=\"_blank\">Workforce Development Council<\/a>.\u00a0The 32-member council is appointed by the governor and has jurisdiction over several workforce development programs.\u00a0 It doesn&#8217;t decide which companies will receive training grant funds, but it does decide on matters such as eligibility requirements and reimbursement caps.<\/p>\n<p>For example, the council recently expanded the training program to give access to the grant money to businesses that aren&#8217;t expanding or averting layoffs.\u00a0 Now, companies that want to replace retiring workers also can apply for these funds.<\/p>\n<p>The Idaho arm of the AFL-CIO has two representatives on the council.\u00a0 Cindy Hedge is one of them.\u00a0 She says labor organizations like hers have pushed without success for a provision that would allow the state to recoup training money if a business folds or lays off workers.\u00a0 Such provisions are generally called &#8220;clawbacks.&#8221;<\/p>\n<p>&#8220;<del><\/del>I think they should be required to stay a certain amount of time after the contract is completed so they have the opportunity to really get their feet into our economy and give back what we\u2019ve given to them,&#8221; says Hedge. <strong><\/strong><\/p>\n<h3>Little Concern About Failure Rate<\/h3>\n<p>Workforce Development Council chairman Tim Komberec, whom Governor C.L. &#8220;Butch&#8221; Otter appointed to the council several months ago, says he&#8217;s confident the Department of Labor does a lot of background qualification work on businesses before approving them for grants.\u00a0 When asked about the possibility of implementing a clawback, he said he&#8217;d like to learn more about the idea.<\/p>\n<p>&#8220;I can&#8217;t honestly tell you what the failure rate is,&#8221; Komberec says.\u00a0 &#8220;You&#8217;ve piqued my interest, and I&#8217;ll take a look at that, but I haven&#8217;t been aware that there&#8217;s been an issue or concern about a significant failure rate of the companies that have received the funds.&#8221;<\/p>\n<div id=\"attachment_8399\"  class=\"wp-caption module image right\" style=\"max-width: 300px;\"><a class=\"fancybox\" title=\"Employees at Empire Airlines work inside a plane. \" href=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/IMG_1349-crop.jpg\" rel=\"\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-8399\" title=\"IMG_1349 crop\" src=\"http:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/IMG_1349-crop-300x217.jpg\" alt=\"\" width=\"300\" height=\"217\" srcset=\"https:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/IMG_1349-crop-300x217.jpg 300w, https:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/IMG_1349-crop-620x449.jpg 620w, https:\/\/stateimpact.npr.org\/idaho\/files\/2012\/06\/IMG_1349-crop.jpg 1490w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><p class=\"wp-media-credit\">Courtesy Empire Airlines<\/p><p class=\"wp-caption-text\">Employees at Empire Airlines work inside a plane.<\/p><\/div>\n<p>In addition to chairing the Workforce Development Council, Komberec is president and CEO of <a href=\"http:\/\/www.empireairlines.com\/\" target=\"_blank\">Empire Airlines<\/a>.\u00a0\u00a0The Coeur d&#8217;Alene-based company has received $863,000 in workforce training funds between 2004 and 2011.\u00a0 &#8220;That incentive was one of the pieces that weighed heavily to keep us here [in Idaho] instead of going to Spokane,&#8221; says Komberec.<\/p>\n<p>Empire Airlines built a new facility at the Coeur d&#8217;Alene Airport in 2004.\u00a0 But before it decided to expand, Komberec says it considered moving the company headquarters 30 miles across the state line to Spokane, Washington, and building the new facility there.\u00a0 Komberec says that would have meant a loss of about 50 Idaho jobs.\u00a0 Then the company sized up the incentives Idaho offered.\u00a0 &#8220;Our board decided Idaho was where we wanted to be and it was the best offer,&#8221; he says.<\/p>\n<p>Today, Empire Airlines employs 180 people in Idaho.\u00a0 That growth, Komberec says, couldn&#8217;t have happened that quickly without training assistance from the state.<\/p>\n<p>But what about the closed companies like <a title=\"Volatile Solar Industry Leads To Layoffs In\u00a0Idaho\" href=\"http:\/\/stateimpact.npr.org\/idaho\/2012\/05\/31\/volatile-solar-industry-leads-to-layoffs-in-idaho\/\" target=\"_blank\">Transform Solar<\/a> and XL Four Star Beef?\u00a0 Is the grant money doing what it&#8217;s intended &#8212; creating and <em>retaining<\/em> jobs?\u00a0 Jenny Hemly at the Labor Department says yes.\u00a0 &#8220;Those people now have new skills they can take with them to a new job,&#8221; Hemly says.\u00a0 &#8220;It&#8217;s a win-win, whether the company survives or not.&#8221;<\/p>\n<p>Idaho&#8217;s AFL-CIO president and Workforce Development Council member Rian Van Leuven says that&#8217;s a short-term view.<\/p>\n<p>&#8220;While I may have gained six to eight months or a year of training,&#8221; says Van Leuven, &#8220;that just puts me back on the unemployment rolls.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last month, Transform Solar\u00a0announced that it was closing\u00a0and laying off about 250 people at its facility in Nampa. As StateImpact reported, the manufacturer of high-tech solar cells, had received\u00a0$1.68 million in workforce training grants\u00a0from the state of Idaho &#8212; money that the company will not have to pay back. It&#8217;s not the first time that&#8217;s [&hellip;]<\/p>\n","protected":false},"author":40,"featured_media":8399,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[14,15],"tags":[42,163,165],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts\/8312"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/users\/40"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/comments?post=8312"}],"version-history":[{"count":0,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/posts\/8312\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/media\/8399"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/media?parent=8312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/categories?post=8312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/idaho\/wp-json\/wp\/v2\/tags?post=8312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}