Tommy G. Thompson
Governor
Linda Stewart
Secretary
OFFICE OF THE SECRETARY
201 East Washington Avenue
P.O. Box 7946
Madison, WI 53707-7946
Telephone: (608) 266-7552
FAX: (608) 266-1784
State of Wisconsin
Department of Workforce Development
Linda Stewart
Joint Finance Committee
Wednesday, March 26, 1997
Thank you, distinguished committee members.
Thank you for the opportunity to comment on the Governor’s budget.
The merger of DES and DVR, the development of PFE, the implementation of W-2 and the development of new federal welfare legislation represent a dramatic change in public policy.
We have embarked on an exciting journey that will no doubt have surprises. I pledge to you however, that as issues arise we will work with the Legislature and the Governor to solve them.
The Governors budget contains several provisions that are of particular importance to the Department
W.2 initiatives
Last week, I visited Pierce County, in your district, Rep. Harsdorf.
As you well know, Pierce is one of our pilot W-2 Counties and before that, a Work Not Welfare County.
I was impressed by what I saw.
I saw first hand how this program can make a real difference in people’s lives.
With the help of a very active and committed W-2 Steering Committee made up of members of the community: educators, community leaders, and employers.
One of whom, the director of a nursing home in River Falls, hired a lady by the name of Jodi.
The mother of four children, for 8 years she had been on welfare.
Jodi was just certain that she could never work. Now, she wouldn’t miss a day. In fact, Jodi has been working for over a year now and has not missed a single day. Last week, Jodi told me how proud she was of herself. But not as proud as I am of her.
Pierce County, since it became a Work Not Welfare County in January 1995, has reduced its welfare caseload by over two-thirds — from 191 families to only 60.
Ed Paulson, the deputy county social services director, tells me that the average wage at placement of former welfare recipients is $7.40 an hour.
Pierce County is proving that W-2 can change lives for the better.
Even at minimum wage, with food stamps, and earned income tax credit benefits, a 3-person family has an after-tax income of almost $1,400/month.
That compares with less than $800 for the same family on AFDC!
In this budget we are asking you to help more people find success.
Child Care:
We know that without child care, there can be no welfare reform.
To help people achieve independence, and to help the working poor who have never been on welfare, Wisconsin is poised to make a dramatic commitment to child care.
From $63.0 million to $158 million in fiscal 1998 and $180 million in fiscal 1999.
We are asking that you extend subsidized Child Care to ALL working families who earn up to 200% of the federal poverty line — or $26,000 a year for a family of three after first qualifying for this assistance at 165% of poverty, or $21,500 a year.
We know that without adequate Child Care, there can be no welfare reform. Wisconsin has been named “State of the Year” by Working Mother magazine four years in a row. Let’s retain that leadership.
Wisconsin’s Job Market
In 1996 alone, Wisconsin’s economy put an additional 65,000 people to work — double the number that we are talking about under
W-2.
In 1996, Wisconsin tied for the 5th lowest unemployment in the nation.
Yes, we know there are challenges.
In the 6 counties of Northwest Wisconsin, Senator Jauch, our labor market analysts tell us that the job market has been fairly stable.
They tell me that jobs are increasing in health care. the average wage on job openings for cleridcal, sales and service workers is $6.25 an hour.
In the Milwaukee metro area, Mr. Chairman, the average unemployment rate for Milwaukee County was 3.9% over the last 5 years while the four-county region was 3.5%.
Milwaukee County JobNet received 20,500 listings in state FY 1996 and has received 10,680 listings for the first 6 months of FY 1997. And only 10% to 15% of available jobs are filled through JobNet.
The remaining caseload has a higher percentage of individuals with barriers to employment and will be more expensive to serve.
CSJs and W2T
Keep in mind, W-2 will give us 5 years to get people in unsubsidized jobs.
That is why we have Trial Jobs, which pay market rates (at least minimum wage) and for which employers will be compensated for their training costs.
Just below that are Community Service Jobs, which will help revitalize communities. For this paid work training we are asking that you approve an increase to $673 a month from the originally legislated $555.
For W-2 Transition jobs, the entry level, we are asking an increase to $628 a month from $518.
Both of the new amounts exceed what a family of 4 would have made under AFDC.
Transportation, job access:
We know that the jobs are not always where the people are.
That is why we are asking you to expand transportation aids from the current $500,000 to $1 million in FY 1998 and
$2 million in FY 1999.
Sometimes it’s the little things that keep people from working. For instance, the need to purchase work uniforms or tools or to get that car running again.
We are asking for Job access loans of $3.6 million in FY 1998.
TANF transfers
And federal requirements on Maintenance Of Effort do not permit the state to reduce commitments below a percentage of 1994 levels.
So Wisconsin is exercising the option to transfer TANF funding to support Child Care and Social Services.
This transfer permits the state to also transfer an equal amount of GPR from the Social Services Block grant to support such services for low-income [below 200% poverty] people as Milwaukee child welfare.
This allows us to leverage additional federal funds without decreasing commitments in other programs.
RFP levels
From the very beginning, we have worked with our local partners, the counties, in reforming welfare. It is important to maintain that working relationship and to support their hard work.
We must not penalize those counties for doing a good job in reducing the caseload just as the state was not penalized.
And we must recognize that those remaining to be served by the counties and the other W-2 providers will have greater needs, requiring more infrastructure changes, including information technology.
And we want to be certain that they have enough resources to provide the safety net supports that may be needed.
Child Support budget initiatives
I know there are those who say W-2 puts all the onus on the mother.
That is not the case. I am asking you to require the father to act equally responsible.
I am asking you to give us the tools to help the 400,000 children in 185,000 Wisconsin families who are owed child support.
Wisconsin does a better job than most states in collecting child support. We collect some money in 38 percent of the cases.
That’s nothing to brag about. That still leaves 62% of the cases in which nothing at all is collected.
And in many of those 38% of cases, much is still owed.
In 1996, $933 million in unpaid support was owed Wisconsin’s children. That is unconscionable!
You may have heard something about the new child support collection tools.
Let me make these basic points about them:
1. They are required by the same federal law that authorized welfare reform: the Parental Responsiblity and Work Opportunity Reconciliation Act. AND
2. This enforcement effort is not aimed at responsible parents who meet their child support obligations — but those who consistently evade them.
3. In almost every case, the parents who are the target of this enforcement know who they are.
4. In almost every case, these parents are not being asked to pay more than they can afford because the presiding judge at the divorce took into account how much they could afford.
5. And finally, this enforcement is aimed only at parents who have some assets — not those who are indigent.
Extensive Due Process protections have been built into this enforcement initiative.
No action will be taken without prior notification and the opportunity for 2 separate hearings.
Senators and Representatives, refusing payment of child support is not a victimless crime!
It is an irresponsible thing to do. It hurts children.
Enforcing child support will help those children and, long-term, it will change behavior.
It will promote responsible parenting.
School To Work budget initiatives
Preparing people for the future. That is a major objective of the Department of Workforce Development.
Producing a quality workforce is a strategic goal that will keep Wisconsin’s economy competitive.
A few years ago, Congressional Quarterly identified Wisconsin as one of four states “leading the way” in school to work programs.
Through youth apprenticeships and skill-certified cooperative learning, approximately 850 employers are taking young people into their businesses to teach and mentor.
Today, 267,000 students in 88 percent of Wisconsin school districts are now involved in School-to-Work programs.
For our state to maintain its status as a national leader and continue to expand opportunities for students throughout the state. We need to consolidate staff resources.
Co-locating school to work resources in DWD permits that program to be better focused, eliminates duplication and strengthens the connection of school to work to other workforce education and training programs.
The youth options program provides high school students who are academically eligible to get a head start on their WTCS or University education.
Chris Bauer, Chairman and CEO of Firstar Milwaukee told us:
“The school-to-career transition partnership gives Firstar the opportunity to train young adults for its workforce. And students receive exposure to the business world. It’s a mutually beneficial program for Firstar and for Hamilton High.”
The partnership between Milwaukee’s Firstar Bank and Milwaukee Hamilton High School was recognized nationally by the National Center for Research in Vocational Education in Long Beach, California last August.
Wisconsin’s School to Work program helped Wisconsin win “State of the Year” honors from the National Alliance of Business for outstanding and innovative leadership in workforce development 18 months ago in Washington D.C.
The President of the Alliance told us:
“With the implementation of a truly comprehensive education, training and employment system, Wisconsin has emerged as a national leader in building a quality workforce for America’s future.”
You, the distinguished members of this committee, have our thanks for making that award possible.
Thanks to your continued support, Wisconsin will continue to be a place where the horizon beckons with opportunity.
Where its workers have the preparation, the incentive, and the support of their communities to provide for their families an even better tomorrow.