Knock, knock, governor: Please re-read ‘The Proper Role of Government’

By Wayne Hoffman | Idaho Freedom Foundation

I’ll give some praise to Gov. Butch Otter and new Department of Labor Director Ken Edmunds for finally acknowledging what should have been said years ago: The state government’s Workforce Development Fund is a multimillion-dollar failure.

It’s time to pull the plug on that ill-conceived wealth redistribution scheme that is contrary to everything Otter once said he believed.

First, some history: In 2011 and early 2012, we started asking questions about the worthiness of the state Workforce Development Fund, which is funded through unemployment insurance taxes and had received more than $62 million to operate.

Armed with anecdotes about state-funded companies closing — and in some cases never even opening — we wanted to know whether the program and its stated goal of providing job training and economic incentives for businesses was measuring up.

The answer we got from the state Department of Labor was saddening, but not all that surprising. The agency didn’t really know, even though the program came into existence in the 1990s.

Credit the department for at least spending the summer of 2012 trying to find answers. Criticize the department and the Otter administration for whitewashing and ignoring the results: The Workforce Development Fund was only 40 percent effective, according to the agency’s analysis, released in October 2012.

The Department of Labor Director Roger Madsen responded by telling the media, “This program has proven its worth” and has “been one of Idaho’s most valuable economic development incentives for more than a decade.”

The Legislature, which is supposed to offer oversight of programs like these, and perhaps would be understandably apoplectic about the state’s “most valuable” incentive being 40 percent effective, went into hibernation. Occasionally it roused itself long enough to comment on how the Legislature should really look into the issue, but then returned to its slumber.

Edmunds, who joined the department in November, recognized the problem and proposed a path to fix it. Going forward, Edmunds and Otter announced, the program would have more safeguards, more transparency and defined metrics and qualifiers for reimbursing companies that use the fund. Additionally, Otter did something neither he nor Madsen had done before: The governor admitted the program’s failings.

Unfortunately, the state government still will sit in judgment of businesses, trying to figure out which companies deserve state help and which ones do not; which sectors of the economy should be elevated and which to ignore; what levels of compensation are reasonable and which are not.

Under the newly constituted Workforce Development Fund, the proprietors who eke out a living, for example, making salsa in Wallace will be forced to subsidize the more-favored companies, in Boise or Twin Falls or elsewhere, making software or yogurt. Because the government says that is right and proper.

The salsa business that might have used its cash to train its own employees or give raises or buy new equipment instead will be compelled to redistribute that money to companies that should or can’t survive on their own.

In his preface to Ezra Taft Benson’s essay, “The Proper Role of Government,” Otter, then a congressman, wrote, “I am often asked about my philosophy of government. Fortunately, the political and economic principles I hold most dear can be found in these very pages.”

Here’s a line from those pages Otter said he loves so much: “(A)ny attempt through governmental intervention to redistribute the material rewards of labor can only result in the eventual destruction of the productive base of society, without which real abundance and security for more than the ruling elite is quite impossible.”

The correction of the Workforce Development Fund’s longtime mismanagement doesn’t cure the fact that the program is built on concepts injurious to freedom and free markets. Even if Otter and Edmunds have the formula correct, I find it impossible to celebrate a program that will take money from those who have earned it and give it to those who have not. And so should the governor.

Wayne Hoffman is the President of the Idaho Freedom Foundation.