Senate Advances Job Training Legislation Ahead of Annual Spring Break
In last week’s column, I discussed an exciting new partnership between Missouri’s 12 community colleges, which will ultimately increase the number of highly skilled workers in the Show-Me State. Today, I’m happy to be able to share even more good news on the job training front. Just a few hours ago, the Senate approved Senate Bill 10, legislation I filed that will make it easier for businesses to work with our network of community colleges to get their employees trained or retrained in whatever capacity they need to continue operating successfully.
For me, SB 10 has really been several years in the making. A few summers ago, I attended a conference in Georgia, and one of the main topics of discussion was workforce training programs. While there, we visited a brand new aircraft maintenance facility in Savannah. The day it opened, 5,000 men and women started working, fully trained and ready to go. The company chose Savannah because of Georgia’s comprehensive job training programs, which had adequately prepared those 5,000 workers. There, right in front of me, was a real-world example of the benefits that come with a robust workforce training program, and it got me thinking about what more we can do in Missouri.
Georgia is far from the only state to have recognized the potential of customized job training programs. From Florida to Tennessee, states throughout the south have already started implementing these programs. They are now leading the nation in new workforce development. More recently, places like Ohio and Indiana have begun following suit and are also reaping the rewards. These states are getting a great return on their investment. There is no reason we can’t do the same.
With SB 10, my goal was not to reinvent the wheel but to apply some of the same best practices other states are using, right here in Missouri — tweaking them when necessary to fit our needs. One of those best practices is funding job training programs through appropriations, not through withholding tax.
Our current system works like this: whenever a company creates new jobs and needs to train new employees, they can apply to the Department of Economic Development (DED) for Missouri Works Training benefits. The company collects withholding tax on their new employees and remits it to the state each quarter; the tax is then redirected to a job training fund. The money from that fund then goes to the community college to cover the costs of the job training project. If you think this sounds like an expensive and convoluted process, that’s because it is.
This approach also has a few major drawbacks. One of the biggest problems is that a company needs to have pretty substantial accounting capabilities in order to meet the quarterly reporting requirements. This often prevents our small and medium-size businesses from being able to take advantage of the program. Another issue is that it takes a considerable amount of time for the withholding tax to trickle back to the community college. Senate Bill 10 will gradually move us to a system where the state is able to provide up-front funding from appropriations from the general revenue fund. For every year the Legislature appropriates more money for job training, a business will be able to reduce the amount of withholding tax they are required to collect.
So what are the advantages? First, since the DED will already have the appropriated funds, the job training will get done, and the community or technical college can be paid up front for the project, which means they won’t have to wait months, or even years, to be fully compensated. The state will continue to get its money back through the withholding tax. Second, SB 10 only requires companies to report back to the state at the end of the year, rather than quarterly. This will open the door for companies of all sizes to take advantage of the great job training opportunities our community colleges can offer.
Perhaps most importantly, my legislation is about investing in the individual Missouri worker. While SB 10 will make it easier for businesses to access customized job training programs, it is the employee who will ultimately come away with a new trade or an enhanced skillset. From that point on, they will be more marketable, able to take their newly acquired skills with them wherever they go.
Over the last several years, I have asked a lot of questions in meetings with various business and industry professionals throughout Missouri and the southern states. After all those conversations, I can tell you that having a well-trained workforce is one of the top factors they consider when deciding where they will locate or expand operations. Bottom line: employers are looking for workers who can show up on day one and hit the ground running.
The end of this week marks the beginning of the annual legislative spring break. This first half of session has predominately focused on attracting new and better paying jobs to our great state and growing a stronger, more resilient economy. Senate Bill 10 aligns perfectly with these goals. It will help put Missouri on a level playing field with other states, and I look forward to the day it makes it to the governor’s desk.
If you have any questions or comments regarding your state government, please feel free to contact me at (573) 751-1503. You are also welcome to e-mail me at jay.wasson@senate.mo.gov.