ETP budget again sees illegal diversions

By CMTA Staff

Capitol Update, April 28, 2006 Share this on FacebookTweet thisEmail this to a friend

Each budget year for almost a decade, California has transferred funds from the Employment Training Fund (ETF) to the Department of Social Services CalWORKS program.  The ETF is a tax on employers intended to fund the Employment Training Panel (ETP) – a successful state job-training program for frontline workers.  This year there is a recommended transfer of $32,930,000.  

We oppose the transfer because it is in violation of California law and hurts California manufacturers.

The Employment Training Tax (ETT) is established in Section 976.6 of the Unemployment Insurance Code.  Employers pay a tax of 1/10th of 1 percent of their unemployment insurance contributions per the provisions of this section.  Section 1611 of the Unemployment Insurance Code states that the funds collected pursuant to Section 976.6 are only to be used for ETP.  Despite this clear language, $286,051,000 has been transferred to the Department of Social Services since 1999.  

ETP is the most effective job training program in California, according to many studies by independent organizations and the state’s own "Report Card" on the performance of job training programs. Key measurements of success include the percentage of trainees working after completion of training, increases in trainee wages after completion of training and the amount of public funds expended per trainee.  

ETP delivers a return on investment of more than $5 for every $1 spent on training.  A National Governor’s Association study of state funded programs concluded; "In many ways, California’s ETP is a national model."  

CMTA believes that the ETP is vitally important because high-wage manufacturers are struggling to stay competitive due to increasing costs and intense competition. California manufacturing is the state’s fastest declining job sector, paying an average wage of $56,524.  (The fastest expanding job sectors pay an average wage of only $38,693.) In a recent CMTA survey, California’s manufacturers said that hiring and retaining qualified employees remains difficult.  ETP is therefore one of California’s most important tools to help manufacturing companies keep middle class jobs in California.

CMTA, along with labor unions and other business associations will work to obtain maximum funding for ETP.
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