APPENDIX F
Background on State-Funded Training Programs

Forty-eight states operate state-funded programs to assist firms in providing employee training. Such programs are linked to the economic development mission of state government. The assumption is that public dollars can help create an infrastructure to coordinate public- and private-sector training resources, improve workers’ basic and occupational skills, prevent worker dislocation, contribute to individuals’ economic self-sufficiency and security, and develop new approaches to learning. Public investments are best used to leverage private investments and to build the infrastructure that can address the needs of multiple firms in a collaborative environment. In 1998 state spending on employer-focused job-training programs totaled about $575 million and exceeded $600 million in 2000. These programs are an important tool to encourage job retention and growth among existing firms. Potential spillover effects are important to consider as states decide which projects to fund and how to leverage broader results from their job-training investments.

Many states are developing funding strategies other than state general fund appropriations. Ten states now fund their programs through an assessment on all employers based on the unemployment insurance fund tax. Most states restrict eligibility for training funds to firms producing goods and services that may be imported to or exported from the state. Most states also tend to direct the funds to large firms rather than small firms. Thirty of the 47 states responding to the study survey indicated that they are making multiform training projects a “high priority.” Multiform projects have several benefits: they enable states to achieve economies of scale, address the training



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The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies APPENDIX F Background on State-Funded Training Programs Forty-eight states operate state-funded programs to assist firms in providing employee training. Such programs are linked to the economic development mission of state government. The assumption is that public dollars can help create an infrastructure to coordinate public- and private-sector training resources, improve workers’ basic and occupational skills, prevent worker dislocation, contribute to individuals’ economic self-sufficiency and security, and develop new approaches to learning. Public investments are best used to leverage private investments and to build the infrastructure that can address the needs of multiple firms in a collaborative environment. In 1998 state spending on employer-focused job-training programs totaled about $575 million and exceeded $600 million in 2000. These programs are an important tool to encourage job retention and growth among existing firms. Potential spillover effects are important to consider as states decide which projects to fund and how to leverage broader results from their job-training investments. Many states are developing funding strategies other than state general fund appropriations. Ten states now fund their programs through an assessment on all employers based on the unemployment insurance fund tax. Most states restrict eligibility for training funds to firms producing goods and services that may be imported to or exported from the state. Most states also tend to direct the funds to large firms rather than small firms. Thirty of the 47 states responding to the study survey indicated that they are making multiform training projects a “high priority.” Multiform projects have several benefits: they enable states to achieve economies of scale, address the training

OCR for page 173
The Workforce Challenge: Recruiting, Training, and Retaining Qualified Workers for Transportation and Transit agencies needs of smaller employers through cooperative projects, and increase employer involvement in the design and management of training programs. Even states that collect their training funds through an assessment on all employers restrict eligibility to firms that are in the “traded sector” of the economy. Few states are working to apply employer-focused training to the substantial federal and state resources that are used to subsidize traditional, campus-based higher education. There is considerable potential to be realized in developing strategies that link the billions of federal and state higher education dollars more closely with state initiatives to address employer needs for higher-skilled workers. Source: Regional Technology Strategies, Inc. A Comprehensive Look at State-Funded, Employer-Focused Job Training Programs. Prepared for the National Governors Association, 1999.