Workforce Training Takes Central Role in DE, KY, MA Budget Proposals

Many governors around the country have begun laying out priorities for the next legislative session. In the coming weeks, SSTI will review gubernatorial addresses and budget proposals related to economic development. This week, we highlight developments in Delaware, Kentucky and Massachusetts.

Delaware
On Thursday, Gov. Jack Markell offered a $4.1 billion budget plan for fiscal year 2017 a week after delivering his final State of the State address. At last year’s address, Gov. Markell introduced the Delaware Promise Initiative, a decade-long initiative to ensure that 65 percent of all Delaware residents had a college degree or professional certificate by 2025. This year, he reviewed the steps already taken to accomplish that goal, including the launch of Delaware’s TechHire IT training initiative, the Accelerated Career Pathways program for high school-level manufacturing training and his $1 million commitment to the Pathways to Prosperity program. He pledged to continue those efforts, as well as to invest in the entrepreneurship support programs and reforming the corporate tax code. The Delaware Competes Act, which would reduce corporate income tax for some businesses, was passed by the legislature the day after being mentioned in the address.

The governor also asked the General Assembly to pass legislation making it easier for small businesses to use online platforms for crowdfunding.

Gov. Markell’s operating budget includes $3 million for upgrades to improve broadband speeds at K-12 public schools. Another $1 million will fund grants to schools for other tech upgrades. The Delaware Economic Development Office (DEDO) would receive $6 million in appropriated special funds and almost $3 million in general funds for fiscal year 2017. The appropriated funds include $1.7 million for the Blue Collar training grants program.

The capital budget includes $10 million for the Economic Development Office Strategic Fund. Before FY 2016, annual funding for the Strategic Fund had been more than double that amount, but calls for greater transparency lead to a reduction. The governor is now proposing $10 million in FY 2017, followed by $15 million in both FY 2018 and FY 2019. Other DEDO projects also would be funded through the capital budget, including $1 million for the Delaware Clinical and Translational Research program, $1 million for the IDeA Network of Biomedical Research Excellence, $1 million for the Bioscience Center for Advanced Technology and $750,000 for the Federal Research and Development Matching Grant program.

Kentucky
Gov. Matt Bevin delivered his State of the Commonwealth budget address along with his proposed budget for fiscal year 2016-18 this week. The $21 billion biennial budget would reduce spending by $650 million. K-12 education would be exempted from the reductions, but the state’s higher education system funding would be reduced by 4.5 percent for the remainder of the fiscal year. Funding levels are less certain for the second year of the biennium, when one-third of higher education funding would be awarded by performance-based criteria. By the 2019 fiscal year, all higher education funding would be performance-based.

Bevin proposed a $100 million bond pool for the Education and Workforce Development Cabinet to co-invest with local communities that need to train workers for high-skill jobs in advanced manufacturing and information technology. The effort would be modeled on the Kentucky Federation for Advanced Manufacturing Education, and would support public-private construction projects that improve workforce development.

Gov. Bevin’s proposal includes $17.9 million in FY 2017 and $18.9 million from the state’s general fund in FY 2018 for the Cabinet for Economic Development. Additional restricted and federal funds are also included in the budget, for a total of $21.1 million in FY 2017 and $22 million in FY 2018. Of this amount, $2.3 million is reserved each year for the training grants through the Bluegrass State Skills Corporation.

Another $8.4 million in FY 2017 and $116,300 in FY 2018 are recommended for the Local Government Economic Development Fund, which supports economic diversification projects using the revenue from taxes on the coal industry.

Massachusetts
Gov. Charlie Baker released his $39.6 billion fiscal year 2017 budget proposal this week, which includes reductions or level funding for most state agencies. The budget and an accompanying jobs bill include an $83.5 million boost for vocational education. Of that amount, $75 million would be provided through a five-year capital program to finance grants for school equipment and expansion. The remaining $8.5 million is included in the budget as grant funding for school-to-career connecting activities. Another $1 million would support technical partnership grants alongside the federal Perkins Act program.

Funding would remain level for most operations within the state’s Department of Business Development. The decrease from $10.7 million in projected fiscal year 2016 funding to $9 million is attributable to one-time funding in FY 2016 for a Computer Science Education Program through the Mass Tech Collaborative. The Mass Tech Collaborative itself has not received state funds since fiscal year 2014, and would not under the proposed budget. Funding would remain level for the Office of Business Development ($1.5 million), the Small Business Development Center at UMass ($1.2 million), Regional Economic Development Grants ($600,000) and Massachusetts Biotechnology Research ($250,000). No funding is proposed for the Mass Manufacturing Extension Partnership Program.