Utah House approves pay-for-success pilot to train adults without diplomas

Representative Schulz told colleagues HB240 creates a three-year pilot to help very low-income adults ages 18 to 50 who lack a high school diploma gain employability, technical and life skills and enter career pathways. The program would use a pay-for-success structure: private social-impact investors fund services up front, a third-party evaluator verifies outcomes and return on investment, and the state repays investors only if verified outcomes are met. "This is a pay for success model, mister speaker... If the program doesn't work, the state doesn't pay," the sponsor said during debate.

Lawmakers pressed the sponsor on whether Workforce Services already runs comparable programs; Representative Moss asked whether the state currently provides similar services, and the sponsor said Workforce Services has programs that are similar but emphasized that HB240’s pay-for-outcomes financing is different. Representative Redd raised fiscal concerns; the sponsor said the original request was $15 million, that figure had been reduced, and that current indications were the appropriation being discussed would be significantly less than $10 million (the sponsor characterized it as "likely to be around half of that"). The sponsor also said a $15 million funding scenario had been estimated to serve about 3,500 participants and that smaller appropriations would serve fewer people.

Supporters from both parties highlighted workforce demand. Representative Ray, citing committee work, said the bill is one of the few proposals in recent years showing an explicit return on investment and urged support. The sponsor noted annual reporting requirements to the legislature and that interim committees would review outcomes.

Voting opened and closed on the second substitute; the clerk reported the bill received 74 yes votes and 1 no vote. HB240 passed the House and was transmitted to the Senate.