INDIANAPOLIS (AP) — Indiana is running short of funds to help Hoosiers
develop job stills at a time when unemployment remains a persistent problem
for many residents.
The Indianapolis Business Journal reports the state’s share of federal
Workforce Investment Act funds fell $11.3 million, or 18 percent, in the
fiscal year that began July 1.
The loss of funds is compounded by the disappearance of federal stimulus
money that helped workforce development agencies fund their budgets.
The state says it has minimized the initial impact of the $11.3 million hit
by immediately doling out money it normally would have held back to respond
to mass layoffs or to distribute through competitive grants.
But it’s a short-term fix, and workforce agencies worry they’ll have to
scale back their services at a time when thousands of Indiana residents
still need them.
“We still have folks who are actively seeking employment assistance, and
it’s difficult to have our funding diminished during such an important
period of time,” said Brooke Huntington, chief executive officer of Employ
Indy, which runs Work One centers throughout Marion County.
“The need is still great and the skill gap is pretty large,” she said.
Indiana’s cuts are largely the result of a $314 million cut in overall
Workforce Investment Act funding. But the state also lost another 8 percent
of its funding because its unemployment rate, which was 8.5 percent in July,
fell below a certain threshold.
The Indiana Department of Workforce Development plans to trim administrative
costs 25 percent through attrition to help make up some of the money. But
Randy Gillespie, the department’s chief financial officer, says the real
impact of the cuts won’t be felt until next July and that deeper cuts to
training dollars are expected.
Agencies “have to make these adjustments now,” Gillespie said.
Indiana typically withholds 25 percent of the funds designated for laid-off
workers as an emergency reserve. That money helps workers find new jobs
following a mass layoff.
This year, the state will hold only a 5 percent reserve. The rest will go to
the regional workforce agencies right away.
Despite those steps, agencies say they’re feeling the effects of the cuts.
Kathleen Randolph, chief executive officer of the Northeast Indiana Regional
Workforce Investment Board, estimates that her agency will train only about
3,000 people this year, down from 12,000 last year.
The board, which serves Fort Wayne and surrounding communities, saw its
funding fall $7.1 million, or 39 percent, this year.
The agency has already cut the number of days eight of its 11 centers are
open from five to three. It added services at those centers, which are in
rural areas, in an effort to offset the impact of reduced hours.
Randolph said job seekers need technical skills to land the manufacturing
jobs the region relies on. She fears companies considering locating a plant
in the area might think twice if there isn’t a skilled labor pool to draw
“I think it’s going to have a serious impact,” Randolph said. “When a site
selector is looking to bring a new company, they want to know right off the
top, ‘Do you have the work force here?’”