2009-10 Budget Analysis Series: General Government

Employment Development Department

Prioritizing Workforce Investment Act Discretionary Funds

As we described in our Analysis of the 2008–09 Budget Bill, federal Workforce Investment Act (WIA) funds are available to states to provide employment and training services to unemployed and disadvantaged workers. Pursuant to federal law, 85 percent of the state’s total WIA funds (an estimated $426.7 million in 2009–10) are allocated to local Workforce Investment Boards. The remaining 15 percent of WIA funds ($64 million in 2009–10) are available for state discretionary purposes such as administration, statewide initiatives, and competitive grants for employment and training programs.

In adopting the 2008–09 budget, the Legislature prioritized $9.5 million in WIA discretionary funds for parolee employment programs operated by CDCR. Absent WIA funding, the CDCR parolee employment programs would have been supported by state General Fund. Each WIA dollar prioritized to CDCR employment programs saved a General Fund dollar.

For 2009–10, the Governor proposes to reduce WIA funding for CDCR parolee employment programs to $2.3 million, at a General Fund cost of $7.2 million. Meanwhile, the Governor proposes to augment WIA funding for initiatives related to nursing education, veterans, economic stimulus, and critical shortage industries. Given the state’s fiscal condition, we recommend that the Legislature reprioritize the Governor‘s WIA discretionary spending plan to redirect $7.2 million to CDCR parolee employment programs. This redirection would result in an equal amount of General Fund savings.

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