Lawmakers OK workforce system changes, despite complaints

Indiana lawmakers on Wednesday night approved a somewhat controversial bill focused on workforce development over concerns of at least one business group and lawmakers who believed the bill increased bureaucracy and put at risk at least $50 million in federal funding.

They also approved other minor tweaks to the workforce system, such as directing the nonpartisan Legislative Services Agency to review the state’s myriad programs and expanding eligibility for Gov. Eric Holcomb’s new grant program.

Lawmakers started the session stating that reforming the state’s muddled workforce development system was its top priority.

Instead, they ended up shutting down bigger proposals—such as creating a a tax credit to lure employees to Indiana, redirecting corporate income tax revenue to pay for workforce training, and creating a fifth year of high school.

“We were supposed to have an elephant, folks,” said Rep. Ed Delaney, D-Indianapolis. “We got a mouse. The second biggest business lobby can’t bring itself to endorse this bill.”

Delaney referred to the Indiana Manufacturers Association, which earlier this week urged lawmakers not to vote for the bill.

Sen. Karen Tallian, D-Portage, said “every governor has had a plan” to change the system but so far no one has.

“Now I feel we’re doing this again,” Tallian said. "We’re increasing bureaucracy again. I feel like we’re rearranging the deck chairs and expecting something new to happen.”

But Holcomb said the bills “will strengthen tools to prepare Hoosiers quickly for high-demand, high-wage jobs.”

"They’ll help us assess our current workforce programs, align them better with the needs of real employers, and make sure our programs are accessible and easy to use for both employees and employers,” Holcomb said in a written statement. "I commend lawmakers for their hard work to get these bills right, and I cannot wait to sign them.”

Senate Bill 50, which passed the Senate 39-9 and the House 67-29, scraps the current State Workforce Innovation Council and replaces it with a new governor’s workforce cabinet.

The group of state officials, business leaders and advocates will advise Holcomb on talent development and workforce needs and “conduct a systematic and comprehensive review, analysis and evaluation of” state funds—and direct state agencies to make any changes necessary.

Senate President Pro Tempore David Long said that the "goal is to make this as streamlined as clean and mean as possible."

But Tallian said she believed it was just creating more bureaucracy.

“We’re getting rid of an old committee with no real plan as to why this new committee is going to be any better than the old committee,” Tallian said. “We have no reason to know that, no reason to think that."

Despite the fact that the state has not received a federally required waiver to change the board, the governor’s spokeswoman, Stephanie Wilson, has told IBJ the governor is “confident” the state will not lose its federal funding.

“We don’t think there’s any likelihood,” Wilson told IBJ on Tuesday, given the positive conversations the state has had with the Department of Labor.

But in order to quell concerns that the bill puts at least $50 million federal funding at risk, lawmakers agreed on a last-minute change that will allow the governor to appoint more members to the committee as he sees fit—or as required by the federal government to stay in compliance with federal law.

Rep. Todd Huston, R-Fishers, said that was included to ensure flexibility "if there were to be any trouble in that discussion.”

Indiana Democratic Party Chairman John Zody slammed the passage of Senate Bill 50, stating that Holcomb is "relying on a back to the future workforce approach punctuated by the same stale policies and fueled by more bureaucracy.”

"More of the same won’t cut it,” Zody said in a statement. "It hasn’t worked for a decade and it won’t work now. The business community is rightfully frustrated and Holcomb is looking like a junior varsity policymaker.”

The other workforce bill approved by the Legislature was House Bill 1002, a funding and programs bill that passed both chambers unanimously earlier in the day without controversy.