Discussion Document

To:                   GWDC Members and interested parties

Prepared by:            Kathy Sweeney and Luke Weisberg

Date:                October 2, 2001

Several events during the past year have spotlighted our efforts to serve dislocated workers in Minnesota.  We now have a huge dislocation with Northwest Airlines that is again focusing attention on the need to serve dislocated workers effectively.

As you may recall, Minnesota serves dislocated workers with both federal (Workforce Investment Act) and state (Workforce Development Fund) funds.  During the last legislative session, the Legislature changed the way state dislocated worker funds are distributed and gave the MN Job Skills Partnership Board (MJSPB) responsibility for setting policy on state dislocated worker fund distribution.  We want to discuss the distribution of these (and possibly other) funds at our October 12, 2001 meeting in order to support the MJSPB in its decisionmaking.  The GWDC has interest in this because we are charged with providing guidance on the use of these federal program funds and also because this speaks directly to Objective 3.3 in Getting To Preeminence dealing with local decisionmaking and allocation of resources at the local level.

The details

Federal funds from WIA Title I have, and continue to be, distributed as follows:

·         25% reserved for rapid response and large layoffs and then bid on competitively per project (among 26 eligible providers) with decisions made by an employee-management committee designated by the business.

·         60% allocated by formula to Local Workforce Councils to serve small layoffs

·         10% for statewide activities

·         5% for state level administration

In the past, state funds have been distributed as follows:

·         60% reserved for large layoffs and then bid on competitively per project (among 26 eligible providers) with decisions made by an employee-management committee designated by the affected employer.

·         40% allocated by formula to Local Workforce Councils and some other service providers to serve small group layoffs

As a result of legislative action and decisions made in August by the MJSPB, state funding is now distributed:

·         50% reserved for large layoffs and then bid on competitively per project (among 26 eligible providers) with decisions made by an employee-management committee designated by the business.

·         35% allocated by formula to Local Workforce Councils to serve small layoffs

·         5% held in reserve for allocation to Local Workforce Councils based on future need

·         10% bid on competitively (among 26 eligible providers) for small group layoffs (10-49 people) with decisions made by MJSPB staff.

The policy questions

There has historically been concern that funding remain available at the state level to respond to dislocations throughout the state (LTV, Northwest, etc.) while still allowing Local Workforce Councils adequate resources to serve small layoffs in their areas.

1)      How can we ensure distribution of funds sufficient to serve small local needs while retaining reserves in the event of a large state-level need?

2)      How do we balance the desire for sufficient competition among service providers with a need for Local Workforce Councils to have appropriate decisionmaking authority for small group layoffs in their areas?