Businesses Get Behind Workforce Fund | Patrick's proposal could help protect money for training
For Michael Engel, chief operations officer at Flexcon in Spencer, a $52,000 workforce training grant in 2003 has gone a long way.
The company used the money to work with the Massachusetts Manufacturing Extension Program to implement “lean manufacturing” techniques that improved efficiency and productivity and helped the company weather the economic storm of the past two years.
“It’s been amazing what the money and the coaching and the support from Mass MEP have been able to do,” Engel said. “The bottom line is about competitiveness and earnings, and everyone benefits from those improvements.”
That’s why Engel said he’s happy to learn that the state is looking to turn the workforce training funds, the source of the state grant, into a trust fund. Doing so would insulate the program from annual state budget season appropriations and therefore provide a more stable funding source in the coming years.
Employers across the state pay an $8.40 surcharge per employee on top of unemployment insurance costs that is supposed to go toward workforce training. But because the money needs to be appropriated each year through the budget process, it’s been vulnerable to cuts.
Last year in the face of revenue shortfalls, Gov. Deval Patrick, with his expanded powers to make unilateral budget cuts, slashed the workforce training fund from its regular appropriation of $21 million down to $10 million.
Then, in his initial budget proposal for next fiscal year released last month, Patrick proposed level-funding the program at $10 million. For most of the past few years the program has received $21 million.
As part of a variety of initiatives aimed at helping small businesses Patrick proposed in early February that the workforce training fund be turned into a trust fund.
A trust fund would mean that all money collected through the $8.40 surcharge would be used only for the three grant programs administered by the workforce training fund. The fund would no longer be subject to annual budget appropriations by the governor and legislature.
John Regan, executive vice president of government affairs for the Associated Industries of Massachusetts, said making the workforce programs a trust is “exactly the right thing to do.”
“It’s tremendously frustrating to see employers be subject to a special assessment for a sole purpose only to have that money diverted for other reasons,” Regan said. “That will not happen anymore.”
Since 1999 more than 2,400 workforce training grants have been distributed across the state worth more than $175 million.
Karl Storz Endovision in Charlton received a $250,000 workforce training grant in 2007 and since then productivity and efficiency have both improved, according to Joanne Hamerly, executive director of human resources.
“I think we have a more skilled workforce that understands how each of their jobs contributes to making the product as good as it can be,” she said. The grant paid for classes in lean manufacturing as well as other professional development courses.
The state legislature still must approve Patrick’s recommendation to turn the program into a trust fund, but Regan said he’s confident the measure will be approved.
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