Walsh to reintroduce bill to stop state
from taking money from Job Development Fund
STATE HOUSE – Rep. Donna M. Walsh is reintroducing her legislation to stop the state from taking a 10-percent cut from the employer-paid Job Development Fund for the General Fund.
The Job Development Fund, which is meant to fund
workforce training, is subject to a 10-percent “indirect cost recoveries”
charge that most of the state’s restricted-receipt accounts pay to the general
fund. Representative Walsh’s bill, which she submitted last year as well, would
create an exception for the fund so it wouldn’t be subject to indirect cost
recovery.
At a time when Rhode Island has the highest unemployment
rate in the nation and has a well-identified “skills gap” between the skills
the workforce has the skills employers need, the state should be putting every
available penny toward worker training, said Representative Walsh.
“More than ever, we need to be spending our worker training funding on training workers. We have too many out-of-work and underemployed Rhode Islanders who need help,” said Representative Walsh, a Democrat who represents District 36 in Charlestown, New Shoreham, South Kingstown and Westerly.
“As it is, Rhode Island isn’t dedicating any of its own money to direct workforce training. The only money we’re using comes from the federal government, and from the Job Development Fund, which is paid for by employers. At the very least, we could stop skimming some from off the top of that fund and use it all for its intended purpose – helping our workforce succeed.”
The Job Development Fund is funded by an assessment of
.51 percent on the first $19,600 of each employee’s salary, paid by their
employers. About 60 percent of the money from the fund is currently being used
by the state to pay off federal loans the state borrowed for its high
unemployment insurance costs, to the tune of about $18 million a year. That
leaves about $11 million for the Governor’s Workforce Board for worker training
programs.
The Governor’s Workforce Board has asked for the change
Representative Walsh has proposed, saying it would provide more than $1 million
in additional funds for training. The state allows 72 other restricted-receipt
accounts such exceptions to the indirect cost recoveries charge.