BILL ANALYSIS Ó
AJR 13
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Date of Hearing: April 9, 2013
ASSEMBLY COMMITTEE ON JOBS, ECONOMIC DEVELOPMENT AND THE ECONOMY
Jose Medina, Chair
AJR 13 (Campos) - As Amended: April 3, 2013
SUBJECT : Labor: Job Corps centers
SUMMARY : Memorializes the Legislature's support for Congressional
action to reverse the suspension of new student enrollments in the Job
Corps, to prevent any limits to student enrollment until other
cost-saving measures have been exhausted, and to maintain the full
range of educational and employment services provided by the Job
Corps. Specifically, this bill :
1)Makes, among other declarations, that:
a) California serves 5,373 disadvantaged youth between 16 and 24
years of age through its seven Jobs Corps centers, making
California's program the largest in the country. Combined
economic activity stimulated by the Job Corps centers in
California is $243,726,519, and 2,971 local jobs have been
created.
b) Job Corps centers are a vital component of California's
workforce development system by providing high school diplomas,
career technical education, and related social skills. Following
their time in the Jobs Corps, graduates are ready to obtain and
hold a job, enroll in advanced training, attend college, or enter
the Armed Forces.
c) Recent studies demonstrate a significant economic gain from
funds invested in dropout recovery programs by increasing
employment, raising individual earnings, improving home and auto
sales, increased job and economic growth, greater spending and
investments, tax revenues, and significant reductions in health
care costs, crime prevention and corrections expenditures, and
other social services provided by California.
d) The United States Department of Labor (DOL) recently decided
to suspend all new student enrollments to 125 Job Corps centers
serving the nation, which would prevent as many as 30,000
otherwise eligible young men and women from receiving diplomas
and job training.
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e) The United States DOL's decision appears to be inequitably
balancing a budget shortfall on the backs of the disadvantaged
youth it is entrusted to serve when other alternatives are
available for closing the shortfall.
f) Seventy-one members of the U.S. House of Representatives and
seventeen members of the U.S. Senate have sent a bipartisan
letter asking the DOL to reverse the suspension of new student
enrollments in order to protect the opportunities provided to the
nation's most disadvantaged youth and to prevent further economic
damage to the communities served by the Job Corps.
2)Resolves that the Assembly and the Senate of the State of California
urge U.S. congressional action to reverse the suspension of new
student enrollments in the Job Corps, to prevent any limits to
student enrollment until other cost-saving measures have been
exhausted, and to maintain the full range of educational and
employment services provided by the Job Corps.
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Purpose : According to the author, "On January 18, an
administrator with the Employment Training Administration placed an
abrupt freeze on enrollments. AJR 13 requests the California
Congressional Delegation to redress this action to prevent the
significant loss of jobs and opportunity for low income youth in the
State of California.
Job Corps, administered by the United States DOL, is the nation's
largest career technical training and education program for low
income young people. The State of California serves the Nation's
largest proportion of Job Corps students with seven Job Corps
centers serving 5,373 disadvantaged youth. Job Corps offers
hands-on training in more than 100 career technical areas aligned
with industry certifications."
The California Job Corps centers in partnership with public schools
like SIATech have also resulted in over 8,000 young men and women
earning a fully accredited public school diploma over the past 13
years. Studies confirm significant economic gain from dropout
recovery and career training by increasing employment, as well as
significantly reducing corrections and social service costs. The
National Job Corps Association reports that the combined economic
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activity stimulated by the California Centers is $243,726,519 and
that 2,971 local jobs are created by operation of the California Job
Corps centers.
AJR 13 calls on our Congressional Delegation to take action to
maintain the full range of educational and employment services
provided by Job Corps and to prevent unnecessary limits to student
enrollment."
2)Framing the Policy Issue : This resolution seeks state legislative
support for federal advocacy to reverse the suspension of new
student enrollments in the federal Job Corps. Having the largest
program in the country and being one of the hardest hit states in
the recession, California's opinion on the issue has particular
merit in the national debate.
In making the case for state legislative engagement, the author
cites the importance of the Jobs Corps to the overall California
economy, the continuing need for effective workforce programs to
support business development and growth in the post-recession
economy, and the ability of the federal government to meet its
fiscal obligation to reduce program costs through other means than
restricting program access. Each of these issues is discussed in
greater detail below.
3)Unemployment in California and Youth Unemployment : While California
is officially considered to be out of the recession, certain areas
of the state and groups of individuals continue to struggle in
finding employment that covers basic financial needs. As of January
2013, the California unemployment rate was 9.8%, higher than the
national average of 7.9%, though there is great variance between
counties in different regions: San Mateo County (6.3%), Orange
County (7.1%, Los Angeles County (10.9%), Riverside County (11.5%),
Kern County (14.1%), Fresno County (16.0%), and Imperial County
(25.8%).
Youth employment was hit particularly hard by the recession and has
been slow to recover; the unemployment rate for persons age 16-19
and age 20-24 are substantially higher than those of other age
groups nationally at 23.4% and 14.2%, respectively.
4)Federal Job Corps Program : The Job Corps is a federally-operated
$1.7 billion residential training program for at-risk youths, ages
16-24. It provides education, training, and support services for
approximately 60,000 underserved youths a year by providing housing,
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education, and vocational training. Recent budget shortfalls have
dropped current enrollment to approximately 39,000 youth, with
enrollment dropping by an average of 1,000 youth per week, due to
program completions and the enrollment freeze.
There are 125 Job Corps centers nationwide, under the oversight of
the DOL. Twenty-eight Job Corps centers are operated by the U.S.
Department of Agriculture's Forest Services, with the remaining 98
centers operated by private contractors. The Job Corps has
traditionally been a successful program; in 2011, Job Corps helped
58.4% of its students find a job and 15% enter college.
On January 28, 2013, Job Corps instructed all centers to temporarily
suspend all enrollments, except for runaway, homeless, and foster
care candidates, due to a budgetary shortfall of $61 million. The
suspension of enrollments was instituted as a cost-savings measure
and is unrelated to sequestration.
5)Job Corps in California : There are currently seven Job Corps
centers in California located in the cities of San Francisco, San
Jose, Sacramento, Long Beach, Los Angeles, San Bernardino, and San
Diego. These centers can serve a total of 3,382 under-privileged
youth when at full capacity. Traditionally, these centers have been
some the best performing Job Corps centers in the nation, with the
Treasure Island (San Francisco), San Diego, and Inland Empire (San
Bernardino) centers ranked among the top 6 in 2012.
6)Causes of Job Corps Enrollment Suspension: Beginning in 2011, Job
Corps has suffered severe financial pressures due to a growth in
expenditures and, primarily, institutional weaknesses in Job Corps'
contracting procedures.
The growth in expenditures came from multiple factors. The delay in
the opening of three new Job Corps centers in 2010 and 2011 caused a
loss of funding for operating these centers, and when they opened,
the Job Corps' administration failed to plan for the additional
costs. An expansion of the Job Corps program, while successful,
also increased expenditures.
However, the Job Corps' lack of contract oversight is the primary
factor that led to the budget shortfalls. Job Corps operates
largely through cost-reimbursement contracts, and these require
constant oversight in order to manage or predict the costs, while
providing little protection from cost over runs. In the most recent
quarters additional fiscal oversight has fixed most of the issues.
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The DOL has stated, however, that the savings found through
administrative fixes cannot be immediately applied to the reopening
of Job Corps enrollment because of the continued unpredictability of
contractor cost overruns.
Recent audits by the Office of Inspector General (OIG), an
independent entity within the DOL, found numerous areas of concern
with the 97 privately-contracted Job Corps centers regarding program
performance, procurement activity, and student and staff health and
safety. The majority of these problems were the result of a
deficiency in program monitoring tools and control protocols
regarding contractual spending trends. As suggested by recent
audits, the Job Corps has instituted a number of changes to increase
savings and fiscal oversight. This includes the addition of
financial officers to provide oversight of Job Corps procurement,
strict and frequent financial reporting, a reduction in student
stipends, and renegotiations with current contractors.
Investigation by the OIG is still ongoing and is scheduled to be
complete in May 2013.
In considering the appropriateness of legislative engagement,
Members may wish to consider whether prospective clients should
suffer for administrative failures. To the extent that the program
is now on a sustainable financial track, requiring at-risk young
adults to wait for training while a rebalancing of the program's
books occurs seems poor public policy. AJR 13 proposes the
Legislature advocate for the immediate training needs of potential
Jobs Corps clients.
7)Current Status of the Job Corps Enrollment Suspension : As of March
26, 2013, new enrollment into the Job Corps was still suspended.
Committee staff contacted the DOL and was informed that the
suspension is tentatively scheduled to continue through June 30,
2013.
According to the National Job Corps, if the suspension continues as
planned, as many as 30,000 youth nationwide will be denied access to
critical education and training and an estimated 10,000 staff jobs
will be lost.
REGISTERED SUPPORT / OPPOSITION :
Support
California Federation of Teachers (joint sponsor)
AJR 13
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Horizon Youth Services (joint sponsor)
School for Integrated Academics and Technologies (joint sponsor)
California Manufacturers and Technology Association
Opposition
None received
Analysis Prepared by : Toni Symonds and Zachary Hutsell/ J., E.D. &
E. / (916) 319-2090