This letter originally appeared in the Indianapolis Business Journal.
Kudos to members of the Indiana Legislature for proposing the workforce training tax credits highlighted in Hayleigh Colombo’s piece, “Job training tax credits gain steam in Legislature” [Jan. 30]. Certainly Indiana’s greatest workforce development challenge is the gap between employers’ needs and the skill level of both existing employees and prospective job candidates.
However, rather than creating a new incentive program, a much more potent, effective and readily available solution already exists: Simply increase funding to Indiana’s Skills Enhancement Fund.
This program, administered by the Indiana Economic Development Corp., could be more broadly administered with additional funding and is far superior to a tax credit for multiple reasons.
First, as a reimbursement grant, SEF is tied directly to the business. In contrast, tax credits mostly flow through to the individual owners of Indiana businesses. As a result, tax credits don’t directly benefit the businesses incurring the training expenses, thereby diluting the intended effects of the incentive.
What’s more, SEF allows the state to focus on specific types of industries and workforce gaps. By comparison, an indiscriminate training tax credit will be arbitrarily utilized with unmeasurable results.
If Indiana were starting from scratch, a job training tax credit would be a fine place to begin the discussion. But with SEF—the best program of its kind in the country—already in place, there’s no need to overcomplicate the solution. The result would be a redundant and unnecessary program for the state to manage. Simply increase SEF funding; the results will speak for themselves.