Prove job training program’s worth

The state's array of tax credit programs are being reviewed to see if Iowans are getting their money's worth. As we've said previously, such scrutiny is critical.

We also think that including the Industrial New Jobs Training Program is appropriate. And we suspect this one will prove to be a keeper, perhaps with some tweaking of the guidelines.

This system, in place since 1983, technically isn't a tax credit program. However, the Iowa Department of Economic Development reviewed it recently, a few months after the state auditor's office raised questions. The DED said Iowa's program is the nation's most expensive, averaging about $13,000 per worker.

Community colleges administer the program and are authorized to sell bonds to pay for the cost of training, in some cases a portion of the new workers' salaries during training and the college's overhead fee. Bonds are paid off with some state income tax diverted from wages of the new employees who are trained.

Interest on the bonds does increase the expense - the DED report said it nearly doubles total cost.

The big question, then: Does the program's performance outweigh costs?

No one can say for sure - yet. But the Iowa Department of Revenue is about to undertake the assessment: Verify how many new jobs are created and their longevity, how good the pay and benefits are, and how much new tax revenue is generated. All compared to the taxpayer cost.

Steve Ovel handles governmental relations at Kirkwood Community College, where the average cost per job of running the training program is about $6,500. Why so much lower than the DED figure?

“I checked with Des Moines Area Community College and their numbers are similar to ours,” Ovel told us. “I don't think their (DED's) numbers are an accurate representation.”

Ovel also said he welcomes the Department of Revenue review and is confident that the cost-benefit ratio will be positive. In the last three years, he noted, Kirkwood's 57 agreements trained more than 3,300 new job workers with starting wages averaging around $35,000. Virtually all included benefits.

The program is limited to new jobs for companies that sell goods and services outside the state, not just in Iowa. The goal is to bring more wealth into the state.

Local and regional officials consider this program one of the state's best economic development tools. It assists companies that want to expand and need specific, higher-level skills in their work force.

Nonetheless, this tool should be thoroughly tested. Iowans deserve to know whether it's working as intended.