BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 776|
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THIRD READING
Bill No: SB 776
Author: DeSaulnier (D)
Amended: As introduced
Vote: 21
SENATE LABOR & INDUSTRIAL RELAT. COMMITTEE : 6-0, 4/27/11
AYES: Lieu, Wyland, DeSaulnier, Leno, Padilla, Yee
NO VOTE RECORDED: Runner
SENATE APPROPRIATIONS COMMITTEE : 9-0, 5/26/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
SUBJECT : Local workforce investment boards: funds
SOURCE : California Labor Federation
California Manufacturers and Technology
Association
State Building and Construction Trades Council
DIGEST : This bill requires Local Workforce Investment
Boards to spend a certain percent of available federal
Workforce Investment Act funds for adults and dislocated
workers on direct client services, workforce training
programs, and supportive services in a manner consistent
with federal law, as prescribed.
ANALYSIS : The federal Workforce Investment Act (WIA) of
1998 provides for activities and programs for job training
and employment investment in which states may participate,
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including work incentive and employment training outreach
programs. Following passage of the federal WIA, the state
established the California Workforce Investment Board
(CWIB) and charged the board with the responsibility of
developing a unified, strategic planning process to
coordinate various education, training, and employment
programs into an integrated workforce development system
that supports economic development.
Existing law requires the local chief elected officials in
a local workforce development area to form, pursuant to
specified guidelines, a Local Workforce Investment Board
(LWIB) to plan and oversee the workforce investment system
at the local level. There are currently 49 LWIBs in the
state. Each local workforce area also created one or more
One-Stop Centers, which provide access to career
information, counseling, funding for education, training
and supportive services.
Under the federal law, WIA funds are distributed to the
states based on formulas that consider unemployment rates
and other economic and demographic factors. California and
its 49 LWIBs receive WIA formula funding from the U.S.
Department of Labor through three revenue streams - Adult,
Youth, and Dislocated Workers. Under federal law, 85
percent of Adult and Youth formula funds, and 60 percent of
Dislocated Worker formula funds are distributed to LWIBs.
15 percent of Adult, Youth, and Dislocated Worker formula
funds (15 percent discretionary funds) are allocated to the
state for a variety of discretionary uses.
Under WIA, there are three tiers of employment services and
job training programs provided to workers and job seekers.
The first two tiers of service are known as "core" and
"intensive" employment services and the third consists of
"job training" :
1. Core services include job search and placement
assistance, the provision of labor market information,
workplace counseling, and preliminary skills
assessments.
2. Intensive services include comprehensive skills
assessments, group counseling, individual career
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counseling, case management, and short-term
prevocational services on how to interview and prepare
resumes.
Both core and intensive employment services are
typically designed to match workers with employers in
a relatively short period of time and are both
provided through California's more than 200 One-Stop
Career Centers.
3. Job training programs include classroom training,
customized training, and on-the-job training (also known
as incumbent worker training). Training funds are often
distributed through vouchers to job seekers to enroll in
eligible training programs. LWIBs determine which
training programs are eligible to receive the vouchers.
WIA funds used for training can also be used for
supportive services that are used to enable a
participant to attend and complete training, such as
subsidized child care and transportation vouchers.
This bill requires LWIBs to spend a certain percent of
available federal WIA funds for adults and dislocated
workers on direct client services, workforce training
programs, and supportive services in a manner consistent
with federal law, as prescribed.
Specifically, this bill:
1. Require that at least 50 percent of funds provided to
LWIBs for adults and dislocated workers under WIA be
spent on workforce training programs and supportive
services for persons enrolled in training, as specified.
2. Require that at least 75 percent of funds provided to
LWIBs for adults and dislocated workers be spent on
direct client services, as defined. Direct client
services includes core, intensive and training services.
Comment
The CWIB is responsible for assisting the Governor in the
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development, oversight, and continuous improvement of
California's workforce investment system. California
receives between $400 and $500 million in federal WIA
dollars annually. And in 2008/09, the state received an
additional $488.6 million from the American Recovery and
Reinvestment Act of 2009. The majority of these funds (85
percent) are formula allocated to the 49 LWIBs which set
policy for how funds are invested locally and provide
oversight of employment services delivered. The rest of
the funds (15 percent) are disseminated at the Governor's
discretion. California's 49 LWIBs set local policies and
allocate resources to respond to local markets to help
struggling unemployed and underemployed workers get and
retain good jobs.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Cost shift of program Unknown, major cost
pressure in Federal/*
funding LWIBs to backfill lost funding in
General
order to address local needs
- administration $15 $31 $31 Federal
* Workforce Investment Act of 1998
SUPPORT : (Verified 5/26/11)
California Labor Federation (co-source)
California Manufacturers and Technology Association
(co-source)
State Building and Construction Trades Council (co-source)
California Teachers Association
Service Employees International Union
OPPOSITION : (Verified 5/26/11)
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Brawley Inn
California Workforce Association
County of San Bernardino
Exchange Bank
Henkels and McCoy, Inc.
Huntington Beach Chamber of Commerce
Imperial County Workforce Development Board
Kaiser Permanente Santa Rosa Medical Center
Orange County Board of Supervisors
P&L Specialties
Rainier Properties, LLC
Redondo Beach Chamber of Commerce & Visitors Bureau
Santa Cruz County Work Force Investment Board
SHN Consulting Engineers and Geologists, Inc.
Sonoma County Board of Supervisors
Sonoma County Employment and Training Division
South Bay Association of Chambers of Commerce
Tom Beard Company
Violette Magique
Workforce Institute
ARGUMENTS IN SUPPORT : According to the author, with
declining state revenues and pressure on public resources
it is crucial that every dollar of federal workforce funds
are invested in high quality employment services that
connect workers to good jobs. The author argues that
despite the need for targeted and effective training,
Employment Development Department data has shown that LWIBs
spend very little of our local WIA funds on skills
training. According to the author, on average, LWIBs in
California invest just 20 percent of their federal funds on
training services and a third spend less than 11 percent on
training, while many invest nothing.
According to the author, federal law provides states with
significant latitude to adjust WIA and align it with a
broader economic vision, something California has failed to
take advantage of. Proponents argue that a vast majority
of funds are going to support relatively less effective
short-term "core" services (such as job search assistance)
provided through a costly network of nearly 150
comprehensive One-Stop centers. The author and proponents
believe that this bill is the first step in re-evaluating
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how these dollars are spent and ensuring that more money is
invested in training programs that are effective and align
with a the State plan for economic growth. In addition,
proponents argue that the objective behind this bill is not
to displace anyone that might be currently providing job
services through the One-Stop Centers, but instead
redirecting our overall efforts toward more effective
training programs that result in permanent jobs for all
displaced workers.
In addition, proponents argue that other states like
Florida, Illinois, Michigan and Wisconsin have all adopted
policies that help drive more local WIA funds towards
training. According to proponents, Florida already
requires that WIBs spend at least 50 percent of their WIA
funds on training. Proponents also argue that many will
need a skilled workforce to replace the retiring baby
boomer generation and to meet the demands of new emerging
industries. This bill increases the share of local WIA
resources that are committed to providing effective,
longer-term job training. Proponents believe that this
bill is yet another step toward ensuring that public
dollars are spent appropriately and that more individuals
are trained for these jobs.
ARGUMENTS IN OPPOSITION : According to opponents, if
passed, this bill closes career centers throughout the
state, returns the public workforce system to an antiquated
model of funding streams, and limits much needed services
to job seekers and businesses during this recession.
Opponents believe that this bill interferes with core
tenants of the legislation, namely, local control and
individual empowerment.
Opponents argue that by imposing a 50 percent training
threshold, this bill:
1. Forces the closure of one-stop career centers, at a time
when California's unemployment rate exceeds 12 percent.
2. Likely results in putting fewer people into training to
meet the training threshold.
3. Excludes the most vulnerable populations, including
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homeless, at risk youth, and others who can't afford to
be in training.
4. Usurps the authority of the local workforce investment
boards to set policy within their local areas.
5. Eliminates much needed career counseling and job search
assistance.
6. Impedes the ability of the local boards to support the
delivery of an array of services needed by area
residents as identified in their local plans.
7. Interferes with the ability of the boards to meet the
mandated requirement to establish and ensure the
operation of a one-stop service delivery system.
8. Limits the ability to leverage multiple funding sources.
PQ:kc 5/27/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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