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Indiana rushes to spend virus relief aid on new jobs program

Indiana legislators scrambled in the final days of their session to make decisions on spending the state’s $3 billion share of the $350 billion in federal coronavirus relief money approved this year for state and local governments.

Posted: Jun 14, 2021 12:23 PM
Updated: Jun 15, 2021 6:14 AM

INDIANAPOLIS (AP) — Indiana legislators scrambled in the final days of their session to make decisions on spending the state’s $3 billion share of the $350 billion in federal coronavirus relief money approved this year for state and local governments.

Like many states, they directed aid to schools, businesses, highway construction and bailing out depleted unemployment insurance accounts. But with much of the money unallocated, budget writers also grabbed onto an idea floated by a local tech millionaire for a revolving loan program aimed at helping workers obtain short-term training certifications to advance their careers.

In an example of how states are casting for ways to spend the federal influx, Indiana’s budget negotiators wrote in $75 million for the Career Accelerator Program — nearly triple the $27 million going to a 2% increase for the state’s higher education system.

It’s also more than three times what the Legislature appropriated to Republican Gov. Eric Holcomb’s Next Level Jobs program two years ago, and nearly double what lawmakers re-injected into his jobs program for the next biennium.

The concept is outlined in just 80 lines of legal text in the 233-page state budget bill and will be overseen by a little-known state agency that hasn’t operated such programs before and whose leaders were only approached by legislative staff a week before the final budget vote about taking on the task.

Senate Appropriations Committee Chairman Ryan Mishler said the funding figure “seemed to be a good number to start with,” but admitted that he and other Republican budget writers didn’t have much time to develop operating specifics for the program.

“If it was general fund money, you know, maybe I would have put more thought into the dollar amount, but it seemed like it was a good use of the federal funds,” Mishler said. “The funds were available for it, so let’s do it. Had it not been for the federal funds, I probably would have rethought the dollar amount.”

About two-thirds of states have passed budgets for next year, with others expected to do so soon. Some, such as Indiana, have been directing pandemic relief aid to new job-training programs.

In California, Gov. Gavin Newsom’s latest budget proposal includes 35 workforce development proposals. More than $3 billion planned for the programs is slated to come from $26 billion in fiscal relief money.

The state’s nonpartisan Legislative Analyst Office criticized Newsom’s proposals as having “notable resources” and “no overarching plan or clear set of goals,” noting that many programs are also “new and so large that agencies likely lack the capacity to administer them in a timely way.”

Legislators in New Mexico put coronavirus relief money into programs that they had refused to fund at the same levels with regular state revenue, including $100 million to fully fund tuition for in-state college students and $10 million toward tourism advertising. The state’s governor, Michelle Lujan Grisham, vetoed the appropriations and has not come forward yet with her own detailed proposal.

Indiana’s hefty spending on the Career Accelerator Fund is another example of states unexpectedly finding themselves flush with cash despite predictions last year of budget deficits caused by the coronavirus shutdown. With the $75 million expenditure not needed to keep an existing program afloat, legislators had the luxury of creating a program with little thought given to specifics.

Democratic state Rep. Ed DeLaney, a member of the budget-writing House Ways and Means Committee, said Republicans weren’t open in deciding how the federal money should be spent and the career accelerator program had no public discussions.

DeLaney said it didn’t make sense to put so much money toward a new program when Republicans pushed for Gov. Eric Holcomb to pull Indiana from federal programs that provided an extra $300 in weekly payments to unemployed workers and expanded jobless benefits during the pandemic.

“This program gets $75 million for having done nothing,” DeLaney said. “Based upon its lack of existence, let alone success, they get $75 million. ... The governor’s talking practically in crisis terms that we don’t have workers, and this program isn’t even set up and it’s funded.”

Indiana’s INvestEd, an agency focused on college financial aid literacy and administering student loans, will oversee the Career Accelerator Fund. Mishler said lawmakers tapped the state-created nonprofit because it already manages millions of dollars in loans.

Bill Wozniak, INvestEd’s vice president of marketing, said House Republicans chose the organization to run the program a week before the legislative session ended. He said planning remains “preliminary,” with the agency still working out how it will select qualified degree programs and how many staffers it will need to coordinate it before funds become available July 1.

Tech entrepreneur Scott Jones, who made millions from selling an early voicemail system and has started several companies, launched the Career Accelerator Fund in 2019 as a nonprofit pilot program intending eventually to turn it over to the state. He said the program could help thousands of Indiana residents obtain short-term vocational certificates in the state’s high-demand career fields.

Jones pointed to his Eleven Fifty Academy, a separate organization that trains students for tech-oriented careers, which he said is “setting the bar” for educational providers that stand to benefit from the fund. The Indianapolis-based academy offers courses in coding, software development and cybersecurity. It boasts a 91% graduation rate, with 80% of students finding jobs within two months of completing the program.

Jones has given more than $900,000 in political contributions to state Republican campaigns and committees since 1999, but no significant donations in the last decade.

The new fund is intended to become self-sustaining with fewer anticipated defaults compared to federal loan programs, and by capturing for up to 10 years the growth in income tax revenue expected to be generated by those who complete the training and get a better job.

The text establishing the fund sketches out a program under which participants would enroll in credentialed courses such as computer programing, manufacturing, health care, logistics and aviation that take up to six months to complete and result in graduates finding jobs that pay at least 20% more than what they had earned. Recipients would be expected to repay the interest-free loans in installments based on their new monthly income.

Chris Watts, president of the nonpartisan Indiana Fiscal Policy Institute, said the $75 million decision “was a little eyebrow-raising.”

“This certainly didn’t get as much discussion as some other (federal stimulus) spending in the budget hearings, which of course we would have liked to see,” Watts said. “But what we’re going to be looking for now is if these short-term programs are able to get folks out there and earning a higher wage. If they can, I think we’ll look back on this as a good investment of those dollars.”

___

AP writers Morgan Lee in Santa Fe, New Mexico, and Adam Beam in Sacramento, California, contributed to this report.

___

Casey Smith is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.

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Illinois Coronavirus Cases

(Widget updates once daily at 7 p.m. CT)

Cases: 1411821

Reported Deaths: 25842
CountyCasesDeaths
Cook56221610554
DuPage935681321
Will779031042
Lake690991026
Kane60025816
Winnebago34649524
Madison32279533
St. Clair29901526
McHenry29537299
Peoria23680346
Champaign21517158
Sangamon19549245
McLean18817194
Tazewell17454308
Rock Island15371329
Kankakee14735224
Kendall13467100
LaSalle12938254
Macon11156215
DeKalb10258122
Vermilion10203154
Adams9468128
Williamson8064138
Whiteside7242174
Boone692680
Ogle628584
Grundy605079
Clinton588993
Coles5855101
Knox5727157
Jackson541365
Henry515270
Macoupin495990
Livingston493993
Woodford491683
Stephenson487886
Franklin484078
Effingham481574
Marion4739117
Jefferson4646123
Monroe450194
Randolph429387
Lee423154
Morgan412192
Fulton409959
Logan406766
Christian393875
Bureau384787
Montgomery383874
Iroquois328468
Perry327961
Fayette325956
McDonough304751
Jersey277752
Saline269757
Douglas262936
Union247141
Lawrence244127
Shelby235638
Crawford217626
Bond212924
Cass209927
Carroll204837
Pike199053
Ford193350
Hancock192232
Clark189734
Wayne188053
Warren186350
Jo Daviess183524
Richland180040
Edgar179642
White178826
Washington168225
Moultrie167428
Mason163147
De Witt161029
Piatt155314
Johnson153616
Clay153443
Greene152634
Mercer151534
Wabash146412
Massac141840
Cumberland130919
Menard127912
Jasper116818
Marshall109919
Hamilton88516
Schuyler8107
Brown8076
Pulaski7377
Stark66025
Edwards62812
Calhoun5362
Henderson53414
Scott5031
Gallatin4964
Putnam4943
Alexander48911
Hardin39512
Pope3384
Unassigned532432
Out of IL20

Indiana Coronavirus Cases

(Widget updates once daily at 8 p.m. ET)

Cases: 766351

Reported Deaths: 13965
CountyCasesDeaths
Marion1052671804
Lake568691028
Allen42858698
St. Joseph37286568
Hamilton37260426
Elkhart29729470
Tippecanoe23441230
Vanderburgh23153404
Porter19568327
Johnson18807391
Hendricks18059321
Madison13518345
Clark13502198
Vigo12817255
LaPorte12558224
Monroe12529178
Delaware11124198
Howard10654237
Kosciusko9751123
Hancock8734149
Bartholomew8256157
Warrick8053157
Floyd8005181
Grant7349181
Wayne7234201
Boone7173105
Morgan6904142
Marshall6329116
Dubois6270118
Cass6085111
Dearborn600078
Noble597890
Henry5944111
Jackson515677
Shelby509897
Lawrence4914127
Gibson461596
Montgomery457592
Clinton454555
DeKalb453685
Harrison452476
Whitley415345
Huntington414081
Steuben410260
Miami405073
Jasper400455
Knox388091
Putnam384662
Wabash368783
Adams352256
Ripley351071
Jefferson341586
White339354
Daviess3089100
Wells302781
Greene292985
Decatur291693
Fayette285864
Posey280935
Scott278758
LaGrange277172
Clay273148
Washington253537
Randolph247583
Jennings238649
Spencer237931
Fountain234850
Starke229959
Owen222259
Sullivan219543
Fulton207845
Jay202832
Carroll197122
Orange190956
Perry189739
Vermillion180044
Rush177327
Tipton172347
Franklin171935
Parke154816
Pike141434
Blackford137832
Pulaski123648
Newton123036
Benton109615
Brown105943
Crawford105516
Martin92515
Warren87715
Switzerland8328
Union73510
Ohio58311
Unassigned0428