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Chapter 6
State Policies to Support Promising Practices
Even though most of the delivery of services and supports to low-income working families occurs at the local level, state policies can have a significant impact on the provision of work supports and career advancement opportunities for low-wage workers and their families. This chapter explores the ways that state policies can influence practice, focusing on the following policy areas:
- Improving access to work supports
- Using Temporary Assistance for Needy Families (TANF) policies to
support employment retention
- Adjusting TANF, workforce development, and higher education policies
to support education, training, and career advancement for low-wage
workers
- Providing employer-based incentives to promote work supports, job retention, and career advancement
How Can State Policies Influence Practice?
State policies can support and promote the promising practices described in previous chapters in a number of ways. For example, state welfare reform, workforce development, and higher education policies can influence the following:
- The amount of public resources committed to serving low-income working
families
- The commitment of the relevant systems to serving these families
- The range of services and benefits for which these families are eligible
- The convenience and ease in accessing these services
Additionally, states can stimulate innovative practices by:
- Funding grant programs and demonstrations
- Establishing performance outcome measures, such as retention and
earnings gains, that focus on serving low-income working families
- Facilitating the coordination of services among different systems
- Offering incentives to the private sector to provide greater support to low-wage workers
While state fiscal crises make this a tough time to develop new state programs and policies, difficult fiscal times can also be the impetus for more creative approaches that include improved coordination, blending of funding, and more efficient service delivery. This chapter discusses specific policy and program options available to states to encourage and facilitate the delivery of work supports, job retention services, and career advancement opportunities for low-wage workers and their families.
State Policies to Improve Access to Work Supports
Chapter 3 identifies a number of local service delivery innovations that are making it easier for low-wage workers to access work supports. While fiscal crises preclude most states from expanding eligibility for these supports, states do remain interested in ensuring that eligible families receive the supports they need — such as food stamps, child care, and Medicaid/State Children’s Health Insurance Program (SCHIP) — to help them remain employed and avoid welfare dependence. Some states are focusing on improving outreach and access to the Food Stamp Program. While the states share in administrative costs, food stamp benefits are 100 percent federally funded. Likewise, the program has long been recognized as having a countercyclical effect during economic downturns, because it injects new spending into the economy.
Similarly, helping to ensure that all eligible families know about and apply for the federal Earned Income Tax Credit (EITC), in particular, is a low-cost strategy that benefits families and brings more income into the state and local economy. For example, West Virginia estimates that, during the first year of its statewide EITC outreach campaign, a modest expenditure of $25,000 contributed to 1,500 more families’ filing for the EITC and credits of approximately $5 million dollars for these families.1 For work support programs that have state fiscal implications, increasing outreach also requires states to plan for sufficient budget increases, in case participation in those programs should rise significantly. Box 6.1 describes several state efforts to conduct outreach and promote asset building as ways to support the work efforts of low-income families.
| States can join existing efforts or can launch collaborative statewide campaigns to increase awareness of the EITC and other credits. They can conduct outreach efforts; increase the amount of credit that families receive by helping them reduce transaction costs and loans; and promote asset building, which helps support long-term economic security.
|
Examples of Policies to Improve Access to Work Supports
- Adjust the state’s application or recertification
policies to make work supports more accessible to working clients.
States can adopt administrative changes to ease access to work supports,
including lengthening recertifi-cation periods, simplifying application
forms and/or developing a single application for multiple programs,
and creating common definitions for “income” and “assets”
across programs. States can also adopt rules that reduce the frequency
of required in-person visits and can encourage local agencies to offer
evening and weekend hours and/or to colocate or outstation eligibility
staff at convenient locations (such as One-Stop Career Centers and health
clinics). (Chapter 3 gives examples of related state practices, and
Box 6.2 expands on these policy alignment options to increase access
to work supports for low-wage workers.)
- Implement “e-government” strategies
to improve access to work supports. States can develop user-friendly
Websites to provide basic information about program benefits and eligibility;
to screen applicants for preliminary eligibility; to calculate benefits;
and to provide downloadable, printer-friendly application forms. Online
information should be easy to locate on a state’s Website and should
cover multiple programs. Some states provide information in various
languages and accept electronic submission of application forms.2
- Conduct statewide outreach to inform low-wage
workers about work supports. A number of states are partnering
with localities and community-based organizations to launch statewide
outreach, marketing, and education campaigns related to work supports.
- Connect work support outreach to asset development
and financial literacy initiatives, particularly concerning the EITC
and child tax credits. States can establish and fund Individual
Development Accounts (or seek alternative sources of funding, such as
foundations) and can encourage filers to save their tax credit dollars
in these IDAs or in traditional savings accounts. States can also help
families maximize the value of their income and tax credits. Currently,
more than two-thirds of families do not realize the full value of the
EITC, losing as much as $200 because of high fees associated with commercial
tax preparation services and “rapid refund” loans.3
States can encourage communities to work with the Internal Revenue Service
(IRS) to establish Volunteer Income Tax Assistance (VITA) sites that
provide free tax preparation assistance to low-income filers.
- Establish a state EITC. Fifteen states and Washington, DC, have established an EITC, which is typically based on the federal tax credit. Refundable credits are available in the District of Columbia and ten states (Colorado, Indiana, Kansas, Maryland, Massachusetts, Minnesota, New Jersey, New York, Vermont, and Wisconsin), and five states offer nonrefundable credits (Illinois, Iowa, Maine, Oregon, and Rhode Island).4 States can count expenditures on the refundable portion of the credit toward their TANF maintenance-of-effort requirement, or they can use TANF dollars. Although it may not seem possible during a fiscal crisis to establish a new refundable credit, a state EITC can help offset cuts to work supports and services for low-income families and can lessen the impact of tax increases.
Aligning policies and procedures among work support programs can make it easier for working families to access and retain supports. While TANF, Medicaid, SCHIP, and child care subsidies have had a great deal of flexibility, many states have felt hampered by the restrictions and requirements of the Food Stamp Program. However, the passage of the 2002 Farm Bill opened up a number of new opportunities for states interested in streamlining and coordinating access to work supports. The following information was adapted from Aligning Policies and Procedures in Benefit Programs: An Analysis of the Opportunities and Challenges Under Current Federal Laws and Regulations, published in 2004 by the Center on Budget and Policy Priorities. In addition to making it easier for families to access and retain benefits, it is probable that the states will experience administrative cost savings. Combining and/or Simplifying Application Forms Most states have created simplified two- or three-page mail-in application forms for Medicaid and SCHIP. By adding a few additional questions, these forms can be used as preliminary screening to determine potential eligibility for food stamps and child care. Families who appear likely to be eligible can then be given additional information on how to apply, and the state can begin the application process. (Creating a single application form to collect the needed data for all work supports may actually result in a longer, more complicated form.) In addition, states can ease the burden of applying for work supports by allowing online filing of applications (with the required signature being sent by mail, fax, or electronic signature). The Food Stamp Program is the only program that requires a face-to-face interview by applicants prior to certification. Finally, states can use a single worker to determine eligibility for multiple programs. However, for Medicaid and food stamps, the final eligibility decision must be made by a state employee, unless the state has received a waiver from the federal government. Aligning Reporting Rules Most benefit programs require recipients to report changes in circumstances that might affect eligibility or benefit levels, such as changes in earnings, household composition, or resources. A state may require written reports on a periodic basis (regardless of whether changes have occurred) or may require recipients to report changes within a specified time after they occur. The 2002 Farm Bill provides states with the option of semiannual reporting for food stamps. During this six-month period, families need not report any changes in earnings unless their income rises above 130 percent of poverty (and during this period, states are not held accountable for any errors associated with these changes). With the flexibility in TANF, child care, and Medicaid, states could adopt a six-month reporting requirement for these programs as well, requiring families to submit the information only once. While this action would ease access burdens for families, it can result in fiscal inefficiencies because some families will be receiving higher benefits than they would actually be eligible for, given their changed circumstances. States also have the flexibility to collect information about changes through phone, fax, and email as well as traditional mail. |
State TANF Policies to Support Employment Retention
State policies and program initiatives to help low-wage workers retain employment have focused largely on current and former TANF recipients. The TANF block grant provides a flexible funding source for postemployment retention efforts, and the TANF High Performance Bonus includes the employment retention of former TANF recipients as one of its primary measures. Although TANF funds can be used more broadly to help working-poor parents who have not been recent recipients of welfare cash assistance, resource limitations have caused most efforts to be more narrowly targeted to former welfare recipients.
State policy options in the area of employment retention include the following:
- Provide ongoing case management and other support
services for current welfare recipients who are working and for individuals
who have left TANF for work. As described in Chapter 4, case
managers play an important role in helping former welfare recipients
deal with work-based issues or problems, access work supports, and handle
family emergencies. States usually set a time limit on the availability
of these case management services, such as 12 months or 24 months after
leaving TANF. States can also fund mentoring services for former TANF
recipients; state and local agencies have contracted with community-based
providers (including faith-based organizations) to recruit, train, and
supervise both volunteer and paid mentors.
- Provide incentives and additional financial
support to offset the costs of working that are incurred by former TANF
recipients. Several states award job retention bonuses or cash
incentives to former TANF recipients who have remained employed at specified
intervals, such as six months, nine months, and twelve months. States
can also provide more generous earnings disregards, work expense allowances,
or supplemental payments to help offset some of the costs of working
(such as transportation, uniforms, and child care). Under current TANF
regulations, these allowances or supplemental payments do not trigger
the time-limit clock if they are intended to offset work expenses rather
than to supplement income. States have also used TANF to create transportation
subsidies. Finally, TANF funds can be used to prevent low-income working
families from losing their jobs, by providing “diversion payments”:
one-time-only, lump-sum financial assistance to help deal with emergencies
that might lead to job loss, such as a housing crisis or car repairs.
- Adopt employment retention as an explicit goal of the state’s welfare reform efforts. States can track retention outcomes and establish performance measures related to employment retention at the state, local, and (where appropriate) grantee level.
Examples of State Policies to Improve Employment Retention
- Postemployment case management and other retention
services. In South Carolina, six counties are pilot-testing “Moving
Up,” a program that provides “mobile” case management
services to individuals who have left welfare, bringing these services
directly to clients in very rural areas. (See Box 4.1 in Chapter 4 for
more information.) Another example is the Transitional Opportunities
Program (TOP) — launched in 2000 by New York State’s Office
of Temporary and Disability Assistance, Division of Transitional Supports
and Policy — to improve service delivery to working current or
former welfare recipients. Initially using $3 million in startup funding
for 18 counties that administer the welfare system in the state, TOP
programs were implemented in two additional counties with subsequent
state funding in 2002. The overall goal is to provide postemployment
supports and services that are focused on job retention and career advancement
and to make them accessible in non-stigmatizing community-based settings.
TOP ensures that working families receive the transitional work supports
they are eligible for, such as food stamps, medical assistance, and
child care. Case managers connect clients with additional community
and public services, including but not limited to free tax preparation
services, adult education programs, and substance abuse treatment.
- Incentives and additional financial support to offset work costs. Tennes-see has encouraged work and employment retention by providing cash bonuses ranging from $75 to $250 at critical junctures, such as remaining employed for nine months or attaining a General Educational Development (GED) certificate. Although studies show that the payments were effective in motivating participants, Tennessee has had to curtail this program due to budget cuts. In New Jersey, the Supplemental Work Support Program provides $200 per month for working TANF recipients for up to 24 months to offset work expenses, as an incentive to voluntarily close their case. Recipients need to have worked at least 20 hours per week for the preceding four months.
State Policies to Support Education, Training, and Advancement
State workforce development, welfare reform, and higher education systems have begun to adopt policies and programs that help low-wage workers access and succeed in postsec-ondary education and training. Additionally, in some states, promising practices and policies are emerging through collaborative efforts that involve multiple agencies and combine a variety of funding sources.
State TANF Policies
While most states emphasize quick placement into employment for those who are “job-ready,” many states also offer the option of limited education and training to help welfare recipients become better qualified for jobs at higher skill levels. TANF can also fund supports for individuals who are enrolled in education programs.
State policy options include the following:
- Permit postsecondary education to count toward
the TANF work requirement either when combined with work or as a stand-alone
activity. Federal law allows states to count up to 12 months
of “vocational educational training” toward an individual’s
work requirement, for up to 30 percent of the caseload. Most states
have not reached this limit. In addition, because the “caseload
reduction credit” has effectively reduced the work rate for all
states, there is significant flexibility to allow individuals to participate
in education and training. A few states have also created a separate
program with TANF maintenance-of-effort (MOE) dollars to permit postsecondary
education as a stand-alone activity for more than 12 months and to stop
the TANF time-limit clock while parents are engaged in full-time education.
- Use TANF/MOE funds to provide college campus-based supports for welfare recipients and former recipients. To support the education efforts of low-income working students, states have funded new college-based services, including child care, counseling, case management, and tuition assistance.
Examples of State TANF Policies
- New Jersey. Through the Career Advancement
Voucher program, employed former TANF recipients in New Jersey are eligible
to receive a $4,000 voucher to pay for education and training that will
facilitate upward career mobility.
- Kentucky. Welfare recipients in Kentucky
can participate in full-time post-secondary education for up to 24 months.
Additionally, welfare recipients at the state’s community colleges
have access to TANF-funded campus-based Ready to Work coordinators,
who help them enroll and provide such additional support services as
tutoring, mentoring and counseling, work experiences, job placement
activities, and special initiatives to remain in school. The program
is a partnership between the Cabinet for Children and Families and the
Kentucky Community and Technical College System.
- Washington. Using TANF funds, the State
of Washington developed a comprehensive approach to help employed current
and former recipients and other low-wage workers access career advancement
opportunities. Programs include tuition assistance for parents who have
incomes up to 175 percent of the poverty level and who are participating
in job-related vocational training at any of the state’s community
and technical colleges; campus-based child care assistance; funding
for skills-based, short-term preemployment training for colleges that
partner with employers; and grants to community colleges to design more
“worker-friendly” programs (for example, with flexible scheduling
and shorter, modularized course offerings).
- Louisiana. More than $13 million of state TANF funds are being used to provide customized tuition and upgrade training — work-related basic skills and high-demand technical skills — in Louisiana’s community and technical colleges, in partnership with employers. Low-income parents (below 200 percent of the poverty level) qualify for tuition, supplies, and supports, including counseling, through an Education/Employment Action Plan, $6 daily transportation stipend, and child care in a licensed center (up to $15 per day per child). To date this initiative has served more than 7,000 low-income parents.
State Workforce Development Policies
State workforce development systems typically include an array of training and education programs that have distinct and varying purposes and are often targeted toward specific populations. Given the breadth of workforce development, low-wage workers make up just one subgroup of potential beneficiaries, and they often get lost in the mix of programs.
Increasingly, however, as states look to meet both the short-term and the longer-term needs of employers in growth industries, they are recognizing the value of focusing on upgrade skills training and on education for low-skilled, low-wage workers. To do this, states are improving coordination and are developing collaborative efforts between employers and state workforce development, economic development, and postsecondary education systems. While states’ authority over the bulk of Workforce Investment Act (WIA) funds is limited — since the majority of funds go directly to local Workforce Investment Boards — states can use their discretionary WIA dollars (15 percent of their allocation) to fund innovative programs and state priorities. Additionally, states can launch collaborations by bundling small amounts of funding from adult education, WIA, and incumbent worker training programs.
States can explore the following options to increase the focus and commitment of the workforce development system to assist low-skilled, low-wage workers:
- In addition to the WIA-mandated partners in
the One-Stop Career Centers, states can require the participation of
additional partners to facilitate access to career advancement services
and supports. States could include welfare agencies, colleges,
education and economic development agencies, and other related programs
as formal partners in the One-Stop system and could include representatives
as members of state and local Work-force Investment Boards.
- Establish a set of shared performance outcome
measures for the state’s workforce development programs that support
career advancement (including welfare reform, adult education, and some
postsecondary programs). These measures could include completion
of educational degrees or certificates or of occupational skills training,
wage gains over time, and employment retention. Separate goals or standards
could be set for individuals who have incomes below 200 percent of the
poverty level, to emphasize the importance of promoting career advancement
for these workers.
- Combine discretionary funding from several programs
to create programs that support skills training and career pathways
for low-wage workers. Options include funding demonstrations
of sectoral or cluster-based strategies for training low-skilled individuals
and creating models of career pathways that incorporate preemployment
training and adult education with postemployment training provided by
community colleges. States can create competitive grants and can leverage
additional funds by requiring a local public or private match.
- Adopt incentives, targets, or set-asides to expand opportunities to use incumbent worker training funds for low-skilled, entry-level workers. Almost every state funds employer-focused training programs to help firms remain competitive and to retain employees by upgrading their skills.
Examples of Workforce Development Policies
- Combine discretionary funding. The Building
Essential Skills through Training (BEST) Initiative in Massachusetts
is a multiagency effort of the governor’s office, the Commonwealth
Corporation, the Department of Labor and Workforce Development, the
Department of Education, and the Department of Transitional Assistance.
BEST funds regional partnerships of employers, industry associations,
One-Stop centers, unions, community colleges, and other training providers
to tackle skills shortages in key industries, including bio-manufacturing,
health care, finance, and manufacturing. The partnerships provide basic
and occupational training to entry-level workers who lack the education
and skills to advance in the industry, thereby promoting long-term employment
and career advancement. To support this initiative, Massachusetts has
pooled resources from Adult Basic Education, the Workforce Investment
Act, and the incumbent worker training fund. In 2002, the Commonwealth
awarded over $3 million through six partnership grants.5
- Adopt incentives, targets, or set-asides to
expand use of incumbent worker training funds to help low-wage workers.
Louisiana’s Incumbent Worker Training program gives preference to
employers who hire recent recipients of public assistance (such as TANF
cash assistance) or of unemployment benefits and those recently released
from a correctional facility. Likewise, California’s customized
incumbent worker training program — known as the Employment and
Training Panel — earmarks a portion of funds to help train current
or former welfare recipients. Another example is Advance Indiana, the
state’s customized training program, which requires the training
to result in a portable skills credential such as a GED, apprentice
status, a certificate, or a college degree. Training can be provided
to low-skilled individuals including welfare-to-work clients.6
- Reexamine state higher education policies. Most higher education policies are not geared toward working adults, especially parents who are balancing education with family and work responsibilities. Traditional financial aid programs, state institutional funding formulas, and curriculum design and course scheduling favor full-time, continuous enrollment in academic degree-granting programs. However, working adults prefer to participate part time or even less than part time (less than six credit hours); frequently enroll in discrete occupational or technical skills programs, offered by nontradi-tional providers, that do not result in an academic degree or certificate; and may enroll intermittently to accommodate other demands on their time.7
As the proportion of nontraditional students has grown — and as public education and training providers have come to face stiff competition from proprietary institutions — states have begun to reexamine their higher education policies with an eye toward improving the opportunities for low-wage workers to access and persist in postsecondary education and to successfully gain credentials that will further their career opportunities. (As described previously, this includes the use of TANF funds to provide on-campus supports and services.) Many state-funded initiatives and system reforms are targeted to community and technical colleges, which have historically been responsive to diverse student populations and which provide a variety educational options — credit, noncredit, remedial, vocational, and academic.
States can consider adopting the following policies and practices:
- Develop state-funded need-based financial aid
programs to fill gaps and cover unmet needs in existing federal and
state programs. This could include need-based assistance to part-time
or less-than-part-time students who are enrolled either in degree-granting
or in non-degree-granting programs, including students in short-term,
career-focused programs. Financial aid eligibility guidelines and levels
could also take into account the additional living expenses of working
students who are also parents, including child care and transportation
costs.
- Reform state financing of postsecondary education
so that more funds are available for “alternative” programs,
noncredit courses, and vocational programs. States can accomplish
this by allowing tuition retention or increasing full-time equivalent
(FTE) reimbursement for these programs and/or providing special funding.
Currently most states reimburse institutions at much higher rates for
credit courses than for noncredit courses, or they do not provide any
FTE reimbursement for the latter.8
States can also provide seed money or startup funds to encourage community
colleges to adopt program innovations — such as short-term training,
modular curricula, and career ladders — that will make it easier
for working parents to participate in education.
- Support career pathway initiatives, and encourage
greater coordination between adult education programs and certificate-
and degree-based vocational or technical programs. States can
support the institutional practices and strategies described in Chapter
5, such as contextualizing adult education programs to help bridge the
gap between noncredit and credit programs, increasing the availability
of adult education programs at community colleges, and fostering the
development of career ladders.
- Adopt performance measures for career or technical programs at community colleges and technical institutions that focus on low-wage workers. These measures could include the percentage of disadvantaged students who completed the program and/or the percentage who were placed in high-wage jobs.9
Examples of Higher Education Policies
- Develop state financial aid programs to fill
gaps for working students. Vermont has a long-standing, need-based
Part-Time Grant Program designed for adult students taking three to
nine hours of credit toward a certificate, diploma, or undergraduate
degree. With an appropriation of $1.3 million, approximately 5,000 students
are served per year, and grants can be as high as $8,650, depending
on the institution. Vermont also has a Non-Degree Grant Program serving
about 2,000 students per year, with maximum grants of $625 for two courses
per semester. In determining need, the higher living expenses of working
adults and their dependents are taken into account.10
A newer financial aid program is West Virginia’s Higher Education
Adult Part-Time Student (HEAPS) Grant Program, implemented in 2000.
The initial program helped to cover tuition and fees for students enrolled
less than full time at a public or private degree-granting college or
university or at Pell-eligible vocational-technical schools. The average
grant was $5,548 in 2000. In state fiscal year 2002, the legislature
set aside 25 percent of the $2 million appropriation to be used for
students in shorter-term, technical certificate programs in high-demand
occupations that require less than a year to complete.11
- Reform state financing of postsecondary education.
North Carolina has made a strong commitment to funding noncredit career-oriented
training. Its Occupational Continuing Education (OCE) Program, run by
the state’s community colleges, provides noncredit training in 1,400
approved courses (including some customized training that is delivered
at the workplace) to nearly 300,000 workers annually. The cost of this
training is covered by a nominal per course fee for participants, and
state reimbursement to the institution, which is based on FTE hours.
Reimbursement has increased over time to result in closer equivalence
between credit and noncredit courses.12
- Support career pathway initiatives and coordination
between adult education and occupational programs. North Carolina
also supports career pathways using both TANF and adult literacy funds
(state discretionary dollars under Title II of WIA) for the development
and operation of programs at community colleges across the state. Basic
skills and remediation trainings are being linked with short-term occupational
training, which, in turn, is connected with more advanced classes to
create a career pathway within an industry.13
- The Arkansas Workforce Improvement Grant. In 2003, the Arkansas Workforce Improvement Grant was created to provide need-based financial aid of up to $1,800 per year to working adults who are enrolled in at least three credit hours in a degree or certificate program. This grant program is designed to aid lower-income adults who are not eligible for Pell Grants or other aid. To fund this initiative, the Arkansas General Assembly transferred $500,000 per year (for the first two years) from the existing Student Assistance Grant Program, which has typically aided more traditional students.
Employer-Based Incentives to Promote Work Supports, Employment Retention, and Career Advancement
In addition to funding or providing services directly, state tax policies can create incentives for the private sector to take a proactive role and make a commitment to meeting the needs of low-wage workers and their families. For example, tax policies can create incentives for employers to increase the supply of certain services, such as child care and health insurance coverage. Although low-wage workers per se are not targeted by these tax policies, they can be major beneficiaries. Tax credits can also create incentives for employers to hire individuals who have barriers to employment and to invest in education and training of lower-skilled workers.14
State options for employer-based incentives include:
- Job training and education tax credits to partially
offset the cost of employer-based training and education. Some
states offer a credit for training that is provided to any employees,
while other credits are targeted to lower-skilled, lower-wage workers.
- Tax credits for employer-sponsored child care or other benefits. States may provide a tax credit against an employer’s cost of constructing new facilities or may reimburse a portion of the employer’s cost of providing on-site or sponsored child care. Although a small number of states offer credits to businesses to subsidize health insurance coverage to employees, studies have found that the marginal relief of these credits relative to the high costs of heath insurance is not a strong enough inducement for most businesses.15
Examples of Tax Code Policies
- Job training and education tax credits.
To encourage workers who lack a high school diploma to attend classes
for a General Educational Development (GED) certificate, Kentucky adopted
an incentive program that combines a tax credit for the employer with
a tuition discount for the employee. Under the program, employers receive
a state income tax credit for a portion of the paid release time that
they give to full-time employees who participate in a GED program. For
each hour of release time, the employer receives a credit equal to half
the employee’s hourly wage, up to a maximum of $1,250. In turn,
those employees who successfully attain a GED certificate receive a
discount of $250 per semester for a maximum of four semesters at any
Ken-tucky public postsecondary institution.16
Another state that uses tax credits as an employer incentive is Rhode
Island; it aims several tax credits at encouraging the hiring and training
of low-wage workers. The Adult Education Tax Credit is equal to 25 percent
of the costs of vocational training or basic education, whether it occurs
on the worksite or not, up to a maximum of $300 per employee and $5,000
per employer. Additionally, the New Employment Tax Credit, which is
similar to the federal Work Opportunity Tax Credit (WOTC), provides
a one-time credit of $2,400 for new hires who have been unemployed and
received Unemployment Insurance at any time in the previous 52 weeks
or who have received TANF for at least one year preceding the date of
hire.17
- Tax credits for employer-sponsored benefits. Georgia’s tax credit “reimburses” employers a generous 75 percent of the cost for on-site or sponsored child care for their employees’ children. An employer that constructs on-site facilities is eligible to receive a credit of 10 percent of the construction cost per year for 10 years; the maximum credit is 50 percent of the employer’s total income tax liability.18 Because a state’s income tax liability may be small, some feel that this tax credit may not provide a large enough incentive. In Kansas, if the amount of the Child Day Care Assistance Credit exceeds the employer’s tax liability, the excess is refunded to the business.
Conclusion
The policies and programs described in this chapter illustrate the potential options and resources available to states — especially within the welfare, workforce investment, and higher education systems — to better serve low-income working families. A state may choose to focus on particular areas or may adopt a variety of initiatives across programs and systems for a comprehensive approach. Even though the evaluation and outcome data on these state approaches are limited at this point, they are representative of the most promising practices encountered in this research.
1 Conversation with Terrell Ellis, West Virginia Welfare Reform Coalition, December 2002. For more information, see www.wvwelfarereform.org. (back)
3 Berube, Kim, Foreman, and Burns, 2002. (back)
4 Patel, Greenberg, Savner, and Turetsky, 2002. (back)
5 For more information, see http://www.commcorp.org/cwi/best/BESTRound1.htm. (back)
6 Golonka and Matus-Grossman, 2001. (back)
7 Bosworth and Choitz, 2002. (back)
8 Golonka and Matus-Grossman, 2001. (back)
10 Bosworth and Choitz, 2002. (back)
11 Bosworth and Choitz, 2002. (back)
12 Bosworth and Choitz, 2002. (back)
13 Alssid et al., 2002. (back)
15 California Budget Project, 2000. (back)
16 For more information, see http://adulted.state.ky.us/GED_Employee_Tuition_Discount_Flyer.doc. (back)
17 For more information, see http://www.rihric.com/hrictaxcredits.htm#RI%20Adult%20Education%20Tax%20Credit. (back)
18 For more information, see http://www.state.ga.us/gccc/businesses/. (back)
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