To remain competitive in an increasingly global economy, we must invest in our workers and give them the training and skills to succeed. Federal, state, and local job training programs are a crucial part of that investment. But the landscape of public funding for job training is complex with multiple funding sources and streams, controlled by a variety of actors, and used differently across geographic areas.
To provide a more complete picture of federal, state, and local investments in job training, this brief describes public expenditures for three states—Massachusetts, Texas, and Washington—and five metropolitan statistical areas in those states—Austin, Boston, Houston, Seattle, and Worcester.
Compared with funding under the Workforce Innovation and Opportunity Act (WIOA) of 2014, state and local investments in workforce training and related services is substantial, in some cases surpassing federal funding. We identified six strategies that states and localities use to manage and supplement funding for job training programs: seeking diverse revenue sources, leveraging public- and private-funding sources, braiding and blending funding, using dedicated fees to fund training, funding sector-based training initiatives, and collaborating and coordinating with other agencies to fill training gaps.
This executive summary provides an overview of our full report Public Funding for Job Training at the State and Local Level: An Examination of Massachusetts, Texas, and Washington. This summary and our full report aim to provide information to state and local workforce development entities, including local workforce development boards (WDBs) and training providers, to help in their funding and training decisionmaking.
State Funding for Job Training
The three states we focus on—Texas, Massachusetts, and Washington—supplement federal WIOA Title I expenditures with a substantial amount of state funding. The structures of their workforce development systems vary significantly, which affects how funds are distributed and used and how agencies coordinate funding and collaborate on workforce programs. By law, the majority of WIOA funding must be disbursed to local entities; however, these three states vary significantly in how centralized or decentralized their workforce development systems are.
In fiscal year 2017, Texas put $48.6 million of state funds toward three workforce development programs. This investment amounts to 30 percent of the state’s $162.9 million in WIOA Title I funding.
Texas’s workforce development system is fairly centralized. One state agency—the Texas Workforce Commission—distributes all federal WIOA dollars to the state’s 28 local WDBs and oversees all state-funded statewide workforce development programs. The local-level workforce systems are similarly centralized; all but a handful disburse only federal WIOA funds.
In fiscal year 2017, state expenditures for three statewide job training programs were $55.7 million, which amounts to 128 percent of Massachusetts’s $43.6 million in WIOA Title I funding.
In Massachusetts, the workforce development system has two primary agencies: one public entity, the Department of Career Services, and one quasi-public organization, the Commonwealth Corporation. The Department of Career services disburses federal WIOA dollars to the state’s 16 local WDBs. The Commonwealth Corporation disburses funds and oversees the majority of state-funded statewide workforce development programs. The local-level workforce systems are also less centralized. Both of the local boards we interviewed receive funds from many different sources.
In fiscal year 2017, Washington spent $59.0 million of state funds on six workforce development programs. This investment amounts to 91 percent of the state’s $64.9 million in WIOA Title I funding.
Washington has the most decentralized workforce development system. Seven public state agencies disburse federal funding for separate workforce training programs. One of these agencies disburses the WIOA dollars to the state’s 12 local WDBs. Each of the seven agencies receives state funding and oversees one more major statewide programs.
Chosen excerpts by Job Market Monitor. Read the whole story at Public Funding for Job Training at the State and Local Level: An Examination of Massachusetts, Texas, and Washington | Urban Institute