Chesterton Tribune

Federal cuts strain Indiana job training efforts

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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 from.

“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?’”

 

Posted 8/22/2011