(May 6, 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 Panel (ETP) fund recently passed an Assembly policy committee.
AB 1804 (Hagman; R-Chino Hills) helps California stay competitive by ensuring that employer-generated dollars for the ETP fund are not permanently diverted by the state to other programs. The measure requires funds borrowed from the ETP to be paid back within three years. This ensures that the funds remain available to train employees of businesses that are locating or expanding in California, as well as retraining employees to make California operations more viable.
The bill will be considered next by the Assembly Appropriations Committee; no hearing date has been set.
A similar “job creator” bill from 2009, AB 816 (Hagman; R-Chino Hills), failed to pass the Assembly Insurance Committee last year.
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 last five years alone, almost 12,500 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 11 years, the ETP funds have been diverted to the Department of Social Services. The diverted amounts range from 26 percent to as high as 68 percent of the ETP fund. Over the last three years alone, more than $190 million has been diverted from the fund.
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.
Key Votes
AB 1804 passed the Assembly Insurance Committee 11-1 on April 21.
Ayes: Anderson (R-El Cajon), Blakeslee (R-San Luis Obispo), Caballero (D-Salinas), C. Calderon (D-Montebello), Carter (D-Rialto), Hagman (R-Chino Hills), Hayashi (D-Hayward), Niello (R-Fair Oaks), Salas (D-Chula Vista), Solorio (D-Anaheim), Torres (D-Pomona).
Noes: Feuer (D-Los Angeles)
Staff Contact: Kyla Christoffersen