By CAITLIN DeLUCA
Capital News Service
LANSING – Business groups and community colleges are pushing to expand a statewide new job training program.
Community colleges run the program for employers that create new jobs. It gives the new employees free training.
It is paid for by capturing the state income tax revenue of the newly hired employees for the first year. After that, those revenues revert to the state, said Mike Hansen, president of the Michigan Community College Association.
The program was approved in 2008 with a $50 million cap. When that cap is reached, the additional new revenues revert to the state’s general fund.
But the demand for more training programs is greater, supporters say. And now that the cap has been reached, the community colleges and employers must wait for for the amount in the fund to dip below it before they can start new programs, Hansen said.
Supporters are pushing legislation to eliminate or raise the cap.
“We could do a lot more training and employers could hire many more people and get them trained,” Hansen said.
But critics say that the program diverts muc- needed potential revenue from local governments.
“Anyone getting general funds would be concerned about this,” said Chris Hackbarth, director of state affairs for the Michigan Municipal League. “The more money you receive from the general fund, the more this would be a concern.”
Other critics argue that employers should pay for the training that they need, Hansen said.
But the program isn’t costing the state any money because it taps tax revenues that would not exist otherwise, he said. “Once they get hired, the income tax withholding goes to the college, but the state wasn’t collecting it anyway, so it’s basically kind of a delay in the capture of that income tax withholding,” Hansen said.
Business groups back expansion of the cap.
“We think the program is amazing, our members are very supportive, but we think it can be improved upon in expanding it, streamlining the process for application and documenting the new jobs,” said Delaney McKinley, director of human resource policy and membership for the Michigan Manufacturers Association.
“A number of our members have benefited from partnering with the community colleges to get the candidates they have skilled up to the level they need them to be at for the jobs that are in demand right now,” McKinley said.
The bill passed the Senate and is now in the House Appropriations Committee.
By CAITLIN DeLUCA