Dan Walters

Observations on California and its politics

Dan Walters: Job training agency’s surplus creates more angst

08/18/2014 12:00 AM

10/08/2014 12:13 PM

A few weeks ago, officials of a small state agency that dispenses funds for training workers to become more proficient were crying the blues.

Requests for funds had outstripped resources by tens of millions of dollars and the Employment Training Panel was being forced, they said, to strictly ration its payouts.

The move angered applicants, because a year before, the ETP was saying it was awash in money and was pleading for more training project proposals.

“We really need to see more good proposals we do not have enough,” the panel’s chairman, labor lobbyist Barry Broad, said in June 2013, according to panel minutes. “So it is no secret that if you are a state agency and you do not move your money, others will find some other way to allocate it.”

In response to the angry responses from applicants last month, Broad acknowledged, “We haven’t been very good at predicting what we should do in advance.”

Nevertheless, the agency drew up rationing plans because of what Broad called “a dire situation,” citing $87.3 million in pending requests for funds but just $32 million remaining to be allocated for the remainder of the 2014-15 fiscal year.

It turns out that the Employment Training Panel isn’t as broke as members thought.

Last week, it was revealed that the Employment Training Fund, financed from payroll taxes on employers, ended the 2013-14 fiscal year with a $24.2 million balance and, according to a Department of Finance report, would end the 2014-15 fiscal year with an even larger surplus even after spending $63.2 million.

“I personally was not aware of it,” Broad says.


After dipping to as low as $40 million a few years ago, payroll tax income climbed beyond $60 million a year, but as revenue rose, spending remained relatively flat.

As the surplus surfaced last week, the Department of Finance quietly placed into a budget cleanup bill $10 million more for the ETP.

“That would help a lot,” says Broad. But rather than tempering criticism, it has fueled demands from applicants to release more money for projects that are being put on hold.

Finance officials say the $10 million is prudent because of the unpredictable nature of training panel spending, and given the volatility of the past year, that may be true.

However, it merely underscores what appears to be managerial shortcomings in an agency that plays an important role in the state’s recovery from recession.

It mirrors, in a sense, what happened in the much larger Department of Parks and Recreation. It, too, was crying the blues about money and threatening to close state parks, but then it was discovered that the department had more than $50 million in hidden reserves.

The revelations in The Bee led to a management shakeup that cost the department director and other officials their jobs.

About This Blog

Dan Walters' column appears in dozens of California newspapers. He joined the Sacramento Union’s Capitol bureau in 1975 and in 1981 began writing the state’s only daily newspaper column devoted to California political, economic and social events. He and the column moved to The Sacramento Bee in 1984. Contact him at dwalters@sacbee.com or 916-321-1195. Twitter: @WaltersBee


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