Workforce Training: Almost Half of States Fund Employment Placement and Training through Employer Taxes and Most Coordinate with Federally Funded Programs. Report to Congressional Requesters. GAO-04-282

Abstract

To help close gaps between employee skills and employer needs, both federal- and state-funded programs are providing training and helping employers find qualified employees. In 2002, states raised revenues from taxes levied on employers to fund their own programs. This study examined how many states used employer taxes to fund their own employment placement and training programs, what services were provided, the extent to which these state programs coordinated with federal programs, and how states assessed the performance of these programs. The study surveyed all 50 states, the District of Columbia, and Puerto Rico. Followup surveys were conducted in states that had such programs in 2002. Researchers analyzed recent assessments from states that had the data available. They surveyed staff from workforce investment boards in six states that began to fund their employment placement and training programs through employer taxes in the 1980s. They also visited three diverse states to interview officials from both state and federally funded workforce programs. Finally, they reviewed existing studies and literature on state employment and training programs. Overall, 23 states used employer tax revenues in 2002 to fund their own programs, and states most often provided job-specific training for workers. States used various types of employer taxes and reported spending $278 million to address state-specific workforce issues. States invested in a variety of industries, with manufacturing the most frequently targeted. Most states with such programs funded through employer taxes reported some coordination with federal workforce programs in 2002. They were most likely to coordinate with federal programs by jointly promoting programs through outreach and referrals. Of the 23 states, 22 assessed program performance in 2002, although none used sufficiently rigorous research designs to allow them to make conclusive statements about the impact of the programs. Seven appendixes provide study objectives, scope, and methodology; employer tax collections and employer tax-funded program budgets in 2002, as reported by states; employer tax-funded programs? primary emphasis, expenditures, and numbers served, in 2002; coordination between federal and state programs through employer taxes in 2002; assessment approaches used in 2002, as reported by states; indicators used in state assessments; and GAO contacts and staff acknowledgements.