Senate Panel Votes to Use Unemployment Dollars for Workforce Programs

Published by editor on Wed, 03/27/2024 - 3:30pm

By:

Brooklyn Draisey

Iowa Capital Dispatch

State unemployment funds would be used for workforce program funding if a bill approved Tuesday by the Iowa Senate Appropriations Committee becomes law.

Senate File 2260 establishes a new Workforce Opportunity Fund and makes changes to work-based learning programs and student teaching requirements.

As amended, the bill would strike the Unemployment Compensation Reserve fund and transfer $30 million of it to the new Workforce Opportunity Fund, Sen. Jeff Taylor, R-Sioux Center, said, with the rest going to the Unemployment Trust Fund. Any interest on the fund will go to the Special Employment Security contingency fund.

Dollars from the Workforce Opportunity Fund would be appropriated to Iowa Workforce Development to be used for maintenance and expansion of state workforce programs.

“I would just note that the state did not make use of the reserve fund back in 2009, 2010 during the great recession, or during COVID period of 2020-21,” Jeff Taylor said. “So in the end, we believe that this makes sense to transfer that money that’s sitting there that is not being used.”

Sen. Molly Donahue, D-Cedar Rapids, reiterated concerns about pulling unemployment funds away from their intended use in order to establish the new fund, but said other areas of the amendment made the bill better.

Sen. Todd Taylor, D-Cedar Rapids, agreed with Donahue about the unemployment funds, saying it’s unclear how the funds will be used outside of the fact that they won’t be used to aid in unemployment needs.

“Unemployment money should really do just two things — pay for unemployment benefits, and lower taxes on employers,” Todd Taylor said.

Other areas of the bill include shortening student teaching requirements for certain students with substitute teaching or paraeducator experience, expanding work-based learning opportunities to outside of the school year and making changes to the Last-Dollar Scholarship program.

Under the bill, students would need to show through FAFSA, the federal student aid application process, that their expected family contribution is $20,000 or less. Eligible programs for the scholarship would include those that lead to employment in 10 priority in-demand fields established by Iowa Workforce Development.

These changes to the Last-Dollar Scholarship program could limit the number of students receiving aid, Sen. Cindy Winckler, D-Davenport, said, also limiting the number of people entering high-demand fields.

With the current program, the list of eligible degrees is much broader, Winckler said, adding that she’s worried about how other fields could be impacted by the change if they don’t make the top 10.

Donahue said this bill would take control away from community colleges, which would know best what programs and careers are most needed in the communities they serve.

“Again, this is taking local control away from our area that knows best what’s needed in our areas,” Donahue said. “That goes for all of your areas, wherever you have a smaller college. They know best what’s needed and it would be best if they were making those decisions.”