A business-and-occupation tax credit that reimburses 50% of costs for customized workforce training conducted through the State Board for Community and Technical Colleges met the Legislature’s stated performance threshold but has seen steep declines in use, JLARC reported.

Pete Van Moorsil, JLARC staff, said the credit pays 50% of businesses’ training payments tied to the community and technical colleges’ customized training program. The state board finances the training from a small revolving loan fund; participants repay 25% upon completion and the remaining 75% over 18 months. The Department of Revenue issues a credit equal to 50% of each repayment, which businesses may carry forward.

JLARC reported beneficiary savings in the current biennium were about $34,000 and that use of the credit declined 86% from its peak as program participation dropped 76% over the same period. Between 2018 and the end of 2023, 27 businesses completed 31 trainings; 24 loans had been repaid and seven remained in active repayment as of early 2024—meeting the Legislature’s threshold that at least 75% of businesses complete training and repay the loan.

JLARC concluded the preference meets the continuation threshold but the impact on business retention and expansion is unclear. Geographically, four colleges conducted 81% of trainings (Clark, Pierce, and Snohomish counties) and 85% of participating businesses were in King, Pierce, Snohomish, and Thurston counties; nearly 80% of businesses using the program were manufacturers.

JLARC recommended the Legislature extend the expiration date and asked the State Board for Community and Technical Colleges to identify ways to increase program use across more counties and industries and to report progress to relevant committees. The citizen commission suggested adding money to the revolving loan fund to increase scale; the state board concurred and is exploring outreach to broaden participation.

Committee members had no substantive objections in the hearing and the presentation concluded with JLARC’s two recommendations for extension and increased outreach.