The Senate Committee on Economic Development, under the direction of Chairman Harris, met on April 29th on interim charge 3.
Charge 3: Review the impact of workforce development programs on economic development across the state. Focus on the impact of Texas Workforce Commission initiatives, the JET (Jobs and Education for Texas) program administered by the Comptroller’s office, and federally funded stimulus programs. Make recommendations for legislation to improve and enhance workforce development in Texas.
Below we highlight some of the issues reviewed during the hearing.
JET Program
Deputy Comptroller Martin Hubert discussed JET funding and Texas Works. The 2009 Texas Legislature approved a new $25 million Jobs and Education for Texans (JET) program.
The Comptroller’s office administers these dollars as the Every Chance Funds with three categories of funding:
1. A $10 million Job Building Fund will help finance equipment purchases for new career and technical education programs started throughout the state that support high-growth industries. The Job Building Fund will require matching local funds and be awarded on a competitive basis.
The Job Building Fund: Equipment & Facility Upgrade round one awards were given in December 2009 while round two was allocated in March 2010. Applications for the third round of Job Building Fund grants are due May 7, 2010.
For planning purposes, please be aware that the Comptroller has published (May 7th) an announcement for Round 4 of Job Building Fund grants. Round 4 will be to award “micro-grants” in an amount of up to $45,000.
2. Another $10 million fund, the Launchpad Fund, will support and expand existing nonprofit programs with a proven track record of good performance. The money from this fund will be allocated to develop, support or expand programs of nonprofit organizations that prepare low-income students for careers in high-demand occupations. These innovative and successful organizations also assist students in applying and enrolling in a public community college or technical school.
Funding for the Launchpad Fund round one was awarded in October of 2009 and round two funding was allocated March 2010.
3. Finally, the $5 million Career and Technical Scholarship Fund allocates money for approved training programs for high-demand occupations to fulfill future work force needs in Texas. Students who apply for these scholarships must seek a certificate or associate’s degree in one of these high-demand occupations. Funds for scholarships covering tuition and fees will be granted directly to community and technical colleges to distribute to students with financial need. $2.5 million in tuition grants from the Career and Technical Scholarship Fund to 54 Texas community colleges and public technical institutes (60 percent of the funds to certificate programs and 40 percent to associate degrees). The Comptroller will distribute another $2.5 million for scholarships in fiscal 2011.
More information about the JET program can be found at: http://www.everychanceeverytexan.org/funds/index.php
ARRA Funding
Lisa Elledge, stimulus program manager for the Office of the Comptroller, discussed ARRA funding and the collective impact of the $288 million.
Elledge explained to the committee their experience with the Texas Trade Up Appliance Rebate Program. Texas was given one-time only funding of approximately $23 million to implement and administer the rebate program. The high volume of people trying to make reservations dramatically impacted system availability and also resulted in reservations going quickly. The program experienced more than 38 million Web hits, and nearly 39,000 rebate reservations were made both through the Web site as well as the phone system. The company administering the rebates had more than 550 agents taking calls; the online system was set up to accommodate 25,000 users at a time. However, with approximately 2,400 Web hits per second and about 1,000 calls per minute, many could not get in and some experienced technical difficulties.
Elledge clarified that the Texas Comptroller’s office is reviewing how the contracted company handled the statewide energy-efficient appliance rebate program since thousands of Texans could not get through to phone banks or a Web site set up to handle requests. Committee members asked several pointed questions trying to determine the cause of the problem and if the Comptroller’s office could have foreseen the situation and possibly ceased contract negotiations with the vendor.
Elledge also updated the committee on the Energy Assurance Program, which has provided funding to update the Energy and Utilities portion of the State of Texas Emergency Management Plan (EMP). SECO is working primarily with Public Utility Commission of Texas (PUC) and the Railroad Commission of Texas (RRC), to which they have already passed on the dollars. This group will work collaboratively to update the EMP as it relates to energy reliability.
Overall the U.S. Department of Energy (DOE) provided ARRA funding to the State Energy Conservation Office (SECO) for four programs:
· State Energy Program (SEP) – $218,782,000 All SEP funds must be spent by April 2012
· Energy Efficiency and Conservation Block Grants (EECBG) – $45,638,100 All EECBG funds must be spent by September 2012
· Energy Efficient Ap
pliance Rebate Program – $23,341,000 All rebate funds must be spent by February 2012
· Energy Assurance Program (EA) – $2,432,068 All EA funds must be spent by August 2012
More information on the specific programs can be found by visiting: www.secostimulus.org
Unemployment Insurance
As Larry Temple, Executive Director of the Texas Workforce Commission (TWC), discussed state unemployment; Sen. Kevin Eltife (R-Tyler) brought up the state’s decision not to take $550 million in unemployment insurance money from the federal government. Gov. Rick Perry opposed taking the money because the federal government required Texas to make permanent changes that expanded eligibility for public assistance.
“It was insane that the state of Texas chose not to take that half a billion dollars in free money from the federal government to put in that unemployment fund,” said Eltife
While some have noted the stimulus payment would have paid benefits for less than two months of unemployment insurance and could have eventually caused a further expansion of costs, others contend the stimulus dollars would have lessened the amount the commission had to borrow or possibly raise taxes.
As noted in the last HillCo Client Advisory the minimum tax rate was raised from 0.26 percent in 2009 to 0.72 percent in 2010. The maximum tax rate, paid by 3.3 percent of Texas’ experience-rated employers, is 8.60 percent, up from 6.26 percent in 2009. In addition to the tax rate being raised, TWC plans to float about $2.5 billion in bonds at the beginning of the year to cover ongoing costs.
