Jobs training program could end without legislative action

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Capital News Service

LANSING — A statewide jobs training program that links community colleges with local employers is in danger of ending if is funding mechanism is not renewed by the end of the year  

The Michigan New Jobs Training Program is used by 21 of the state’s 28 community colleges  and has served 193 employers since its creation in 2008.

Supporters of what many view as a successful program are puzzled by what they see as a mixed message from lawmakers. Extending the program should not have any significant fiscal impact to the state, according to the House Fiscal Agency.

“Everything at the state level is about the urgency of job creation and job training,” said Marguerite Cotto, the vice president for lifelong and professional learning at Northwestern Michigan College in Traverse City. “If the need is so great, why take a relatively simple tool and close it out?”

The way the program works is that a company sends new employees to be trained at a participating community college at no cost to the company. The income tax the new employees pay is sent to the school instead of the state until the school is fully compensated for the training.

“It’s kind of this real win-win-win scenario that rarely happens in state government,” said Michael Hansen, the president of the Michigan Community College Association. “Employees get free training, the state elevates the skill level of the workforce and the colleges increase their capacity for training.”

Six community colleges — Delta, Grand Rapids, Lansing, Mott, Muskegon and St. Clair County — sell bonds on top of the income tax because their training programs are more expensive. Companies usually front that money to the colleges and the money is returned to them, Hansen said.

Bonds are used by companies, municipalities and states to finance projects and operations. But the ability to bond for the training program is set to expire, and supporters fear that threatens the entire program.

The House recently voted 106-2 to extend the program until 2023. The bill has been sent to the Senate and will be read on Nov. 27 before most likely moving to the Senate Appropriations Committee, according to the office of Sen. Dave Hildenbrand, R-Lowell Township, who chairs the committee.

If it fails to pass in the Senate’s lame duck session that ends Dec. 31, the program is at risk of shutting down entirely.

Hansen said he expects approval, but says nothing is set in stone.

“Stranger things have happened and you can never count on anything,” he said. “We’re working hard to make sure the bill passes.”

Industries that have entered into local agreements with community colleges include car manufacturing, engine and turbine manufacturing, engineering and architectural services, scientific and research instruments, insurance, medical and dental supplies, data processing services and agricultural services.

There are no restrictions on the type of training delivered, employer size or industries served.

It’s a flexible tool, focused on meeting the training needs of any employer creating new jobs, Hansen said.

The number of projected new jobs supported by already existing agreements is 21,794, according to the community college association’s data as of Sept. 5.

“The greatest success has been the fact that it has really helped get at the skills gap issue,” Hansen said. “Most of the population and businesses tend to be in areas of Southeast Michigan but it’s starting to reach communities in more northern areas of the state as well.”

Companies that enter into an agreement with the colleges must pay new employees 175 percent of the state minimum wage, about $16 per hour.

Mid Michigan College, which has campuses in Mount Pleasant and Clare County, has been unsuccessful in locating employers within its region to take advantage of the program, said Scott Govitz, the associate vice president of workforce and economic development.

It is a challenge for colleges in more remote areas to find employers who agree to the 175 percent of minimum wage requirement, but recent contracts have been accepted in Traverse City, Ironwood, Petoskey and Alpena, Hansen said.  

Northwestern Michigan College has participated in the program since the beginning and has seen steady growth in employer contracts from all industries, Cotto said. Once its current training commitments conclude, the program will have created 850 new jobs and brought a $5 million economic impact to the Grand Traverse county region.

“In our region of the state we initially thought our primary users would be smaller manufacturers,” she said.  “Now we don’t have a sector that isn’t represented.”

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