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Other Budget Issues

Last Updated: 6/3/2010
Budget Issue: Workforce Investment Act (WIA) State Discretionary Funds
Program: Employment Development Department
Finding or Recommendation: Redirect WIA state discretionary funds to the California State University nursing programs and other employment training programs to create General Fund savings in the low millions.
Further Detail

Workforce Investment Act Funds Available in 2010-11

For 2010-11, California has received $460 million in federal Workforce Investment Act (WIA) funding. Pursuant to federal law, about 85 percent of the state's WIA funding is allocated to local Workforce Investment Boards, while the remaining 15 percent (about $69 million) is available for state discretionary purposes. The Employment Development Department proposes to spend these state discretionary funds on a myriad of workforce development initiatives.  These include programs for nurses, parolees, and veterans. The expenditure plan reflects the administration's program priorities and is currently under legislative review. 

Opportunity to Achieve General Fund Savings

Currently, the California State University (CSU) operates certain training programs for nurses using General Fund resources (over $50 million).  The Legislature could redirect some of the 15 percent WIA discretionary funding to CSU nursing programs and generate General Fund savings equal to the amount of any such redirection.  We note that federal law indicates that WIA funds should only be spent for "activities that are in addition to those that would otherwise be available in the local area in the absence of such funds."  To the extent these nursing programs are at risk of budget reductions, we believe use of the federal funds to maintain them could be justified.

We have identified at least $3.7 million in WIA discretionary programs that can be redirected to fund CSU nursing programs.  These funds come from proposed program increases for which we find no strong justification.  The Legislature may find other proposed WIA expenditures which it may wish to consider redirecting to CSU.