(April 5, 2010) A California Chamber of Commerce-supported “job creator” bill that protects and maximizes the amount of training dollars that stay in the Employment Training Program (ETP) fund is being heard this week in the Assembly Insurance Committee.
AB 1804 (Hagman; R-Chino Hills) helps California stay competitive by ensuring that employer-generated dollars for the ETP fund are not diverted by the state to other programs. This ensures that the funds remain available to train employees of businesses looking to locate or expand in California, as well as retraining and bolstering existing California employees and operations.
For more than 20 years, the ETP has been a partner with California companies to help develop advanced skills for their workers. The ETP is funded directly by California employers for their employees through the Employment Training Tax. For every $1 spent on training there is a $5 return on investment.
Examples of ETP successes include:
- Since July 2005, investing $49 million aimed at business expansion, retention and job creation at key California companies such as Genentech, Virgin Air, and SYSCO Food Services, resulting in approximately 24,000 new and saved jobs.
- Addressing the growing demand for and shortage of nurses by training, in the past five years alone, almost 6,000 workers such as certified nurse assistants, and health facility caregivers.
- Effective January 2007, launching a Seasonal Worker Pilot Training Program to increase employment retention and productivity in all cycles of agricultural crop production, including harvesting, packing, processing and transportation.
Unfortunately, over the last 10 years, the ETP training funds have been diverted to the Department of Social Services, ranging from amounts of 26 percent to as high as 68 percent of the ETP fund. Over the past three years, these amounts have exceeded $190 million.
It is especially critical to stop continued diversion of these dollars now, since ETP fund revenue has decreased dramatically. Employers with numerous layoffs tend to fall into negative reserve and no longer have to pay the Employment Training Tax. Significant job losses in the economic downturn have resulted in almost a 50 percent decrease of the fund.
Although difficult choices must be made to balance the state’s budget, the backbone of California’s economy is a skilled workforce. Undercutting programs that help business prosper, create high-wage jobs, and generate tax revenue will only exacerbate California’s budget problem. AB 1804 would help ensure that California employers will continue to see their employment training tax dollars reinvested in California workers.
A similar “job creator” bill from 2009, AB 816 (Hagman; R-Chino Hills) failed to pass the Assembly Insurance Committee last year.
Staff Contact: Kyla Christoffersen