BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 776 (DeSaulnier)
Hearing Date: 5/26/2011 Amended: As Introduced
Consultant: Bob Franzoia Policy Vote: L&IR 6-0
_________________________________________________________________
____
BILL SUMMARY: SB 776 would require local workforce investment
boards (LWIBs) to spend a certain percent of available federal
funds for adults and dislocated workers on direct client
services, workforce training programs, and supportive services
in a manner consistent with federal law.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Cost shift of program Unknown, major cost pressure in
LWIBsFederal/*
funding to backfill lost funding in order to
address General
local needs
- administration $15 $31 $31 Federal
* Workforce Investment Act (WIA) of 1998
_________________________________________________________________
____
STAFF COMMENTS: SUSPENSE FILE.
This bill would require at least 75 percent of federal Workforce
Investment Act funds provided to local workforce investment
board (LWIBs) for adults and dislocated workers shall be spent
on direct client services. Additionally, at least 50 percent of
these funds provided to LWIBs for adults and dislocated workers
shall be spent on workforce training programs and supportive
services for persons enrolled in training.
Expenditures by percentage for training, core, and intensive
services vary widely by LWIB. A funding formula that
prioritizes training services over core services and intensive
services to a significant degree would likely prevent LWIBs from
responding to needs of local workers and place pressures on
other funding sources to meet those needs. This would likely
have the greatest impact on the One Stop Career Centers
established under the WIA. These centers offer employment and
training services, including help with resume writing,
interviewing skills, finding job openings in the area of the
center, training referrals and programs, career counseling, job
listings, and similar employment related services. Every
SB 776 (DeSaulnier)
Page 3
geographical area is required to have at least one center. It
is unclear what would happen if centers closed (and leases
violated) and areas were out of compliance. Presumably, federal
funds could be returned to the state and redistributed to areas
that are in compliance. Staff notes the bill does not provide a
mechanism for EDD to enforce its provisions.
Self-reported expenditure data provided by LWIBs to the
Employment Development Department (EDD). LWIBs provide
quarterly expenditure data for training, core and intensive
services, administrative costs, and other operating costs to
EDD, using EDD's Job Training Automation system. EDD regularly
provides policy direction to the LWIBs on how to classify
various types of expenditures using federal guidelines and
definitions.
Administrative costs for EDD are an estimated $31,000 annually
for staff to monitor and report LWIB expenditures.
A breakdown of the expenditure requirements placed on LWIBs if
this bill is enacted is as follows:
Fiscal Year 2010-11
WIA Formula Funds to LWIBs
Adult: $111,928,088
Dislocated Worker: $115,447,810
Total: $227,375,898
Minimum expenditures to meet 75 percent requirement for direct
client services to adults and dislocated workers: ($227,375,898
x 0.75) = $170,531,926.
Minimum expenditures to meet 50 percent requirement for
workforce training program and supportive services to adults and
dislocated workers: ($227,375,898 x 0.50) = $113,687,949.