CMTA sponsors bill to protect training funds

By CMTA Staff

Capitol Update, April 2, 2010 Share this on FacebookTweet thisEmail this to a friend

CMTA is again sponsoring a bill to protect and maximize the amount of training funds in the Employment Training Fund (ETF). AB 1804 (Curt Hagman, Diamond Bar) specifically eliminates the provision that allows for the diversion of ETF dollars to the Department of Social Services (DSS).

As one of the State’s only discretionary economic development resources, the Employment Training Panel (ETP) has been an essential tool in addressing the staggering 12.5% unemployment rate, creating new job opportunities and helping retain jobs.  The ETP responds quickly to California's ever-changing high-wage industries such as manufacturing, high tech, bio-technology, multimedia, construction, healthcare and clean technology.  It also targets the needs of special populations, such as the "working poor" in high unemployment areas, ex-offenders, "at-risk" youth, veterans and workers with barriers to employment, including CalWorks recipients.

Unfortunately, over the last eleven years money from the ETF has been diverted to DSS. Appropriations to DSS have ranged from 26 to 68 percent of the fund.  Over this period, the ETF has collected over $1.1 billion from the employer training tax.  Of that amount, $406 million (37%) has been transferred to DSS, while only $578 million (53%) has been appropriated to the ETP.

It is critical to stop the diversion of these dollars. With a 12.5% unemployment rate, 50% of the fund’s reduction can be attributed to employers with high layoffs that no longer have to pay the Employment Training Tax.

The current demand for ETF greatly exceeds available monies.  It is estimated that for every $1 million reduction in ETF, approximately 60 businesses and 820 workers, primarily in the manufacturing and high technology sectors, must forego needed training.

Employers paying into the training tax should see their dollars reinvested in California workers.

To support AB 1804 contact Assembly Insurance Chair, Jose Solorio at 916-319-2069 or send a letter to the Assembly Insurance Committee. Room 2196, State Capitol Building, Sacramento, CA  95814.

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