A House committee on Monday stripped a tax credit meant to encourage companies to provide more employee training out of a workforce development bill, prompting criticism from a group representing manufacturers.
The Ways and Means Committee voted unanimously to send House Bill 1008 to the full chamber, despite complaints from Andrew Berger, a lobbyist for the Indiana Manufacturers Association, who said the bill now provides “more of the same” kinds of initiatives that haven’t worked in the past.
“We’re disappointed,” Berger told the Republican-controlled committee. “The tax credit was the only new thing.”
As amended, the bill would create two new workforce grant programs and require the governor’s office to develop a workforce development plan.
“We’ve studied this 30-plus times,” Berger said.
As introduced, HB 1008 included an income tax credit that would equal the lesser of $25,000 or 50 percent of a training program’s expenses. It would have been available to employers with up to 250 employees as long as the training led to full-time employment for the trainees or a raise of at least 5 percent.
The manufacturers association and the Indiana Chamber of Commerce backed the bill.
But its author, Rep. Todd Huston, R-Fishers, said he offered the amendment to cut the tax credit program after concerns about its cost and whether it would actually encourage companies to provide additional training.
The tax credit would have gone into effect in 2018, with an impact on state revenue starting in 2019. The nonpartisan Legislative Services Agency said in a report that the cost of the proposed credit was “indeterminable at this time.” But, the report added, “it would be significant.”
Indiana Manufacturing Association President Brian Burton later said in a statement that tax credit wouldn’t cost the state additional money if it replaced existing programs “that are deemed inefficient or ineffective.”
“This would be a business-driven solution to the state’s workforce issues,” Burton said. “It would require participating employers and their education partners to identify the missing skills needed to start and complete a valued credential or degree, which would benefit our industry’s workers and future workers."
Although he authored the amendment to cut the tax credit, Huston told the committee that the concept “is a good one” and should be considered in future years.
“The more that we don’t get this right,” he said, “the further and further behind Indiana becomes in meeting the needs of our employers and our economic development goals.”
The bill is part of a larger discussion lawmakers are having about the $1 billion in state and federal funding that nine Indiana agencies spend on some 30 workforce development programs. House Speaker Brian Bosma has said the system is ineffective and that developing an “employer-directed” training system might be the answer.