1

Early Implementation of the American Recovery and Reinvestment Act:

 Workforce Development and Unemployment Insurance Provisions

Submitted by

Center for Employment Security Education and Research

National Association of State Workforce Agencies (NASWA)

444 N. Capitol Street NW

Washington, DC 20001

Richard A. Hobbie, NASWA

Burt S. Barnow, George Washington University

Project Co-Directors

(contract #MI19159-09-60-A-11)

January 2011
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Acknowledgements

This report was prepared for a grant awarded to the National Association of State Workforce 

Agencies (NASWA) by the Employment and Training Administration of the U.S. Department of 

Labor. The workforce development sections of the report were written by Burt S. Barnow, Joyce 

Kaiser, Christopher T. King, Demetra Nightingale, Tara Smith, and John Trutko. Site visits to 

states and local areas were conducted and analyzed by the aforementioned individuals and 

Lauren Eyster, Martha Holleman, Frederica Kramer, Dan O’Shea, and Wayne Vroman. Yvette 

Chocolaad and Richard Hobbie wrote the unemployment insurance section of the report with 

input from Wayne Vroman, and all three individuals conducted the pilot state UI interview. 

We are particularly grateful to the staff in the states and local areas we visited or interviewed for 

the project. These individuals gathered information and data for the research teams, participated 

in meetings, and reviewed our draft reports. Without their cooperation and participation, the 

study would not have been possible.

Finally, we would like to acknowledge the assistance of our project officers at the Employment 

and Training Administration. Jonathan Simonetta and Wayne Gordon provided guidance and 

feedback throughout the project.
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TABLE OF CONTENTS

Executive Summary ...................................................................................................................... 8

Chapter I: Introduction.............................................................................................................. 19

A. Background and Purpose .................................................................................................... 19

B. Components of the Project ................................................................................................. 23

C. Description of the 20-State Survey..................................................................................... 24

D. Comparison of Sample States to the Nation....................................................................... 32

E. Outline of the Remainder of the Report ............................................................................. 38

Chapter II: State Approaches to the Recovery Act ................................................................. 39

A. Early Planning and Start-Up............................................................................................... 39

B. Organizational and Staffing Response ............................................................................... 41

C. Technical Assistance and Training in Response to the Recovery Act ............................... 47

D. Plans for Spending Recovery Act Funds and Early Expenditures ..................................... 48

Chapter III: WIA Adult and Dislocated Worker Programs .................................................. 50

A. Assessment and Counseling ............................................................................................... 52

B. Changes in Training Requirements and Policy .................................................................. 57

C. Links to Apprenticeship ..................................................................................................... 66

D. Pell Grant Usage and Issues ............................................................................................... 67

E. Relationships with Institutions of Higher Learning ........................................................... 71

F. Targeting on Low-Income Individuals............................................................................... 74

G. Supportive Services and Needs-Related Payments............................................................ 77

H. Expectations When Recovery Act Funding Is Exhausted .................................................. 81

Chapter IV: Wagner-Peyser Employment Services................................................................ 84

A. Background......................................................................................................................... 84

B. Operating Policies/Changes as a Result of the Recovery Act ............................................ 85

1. General Operational Structure ................................................................................. 85

2. Co-Enrollment Policies............................................................................................ 86

3. Assessment and Counseling..................................................................................... 86

4. Staffing..................................................................................................................... 88

C. Challenges .......................................................................................................................... 90

D. Major Achievements .......................................................................................................... 92

E. After the Recovery Act....................................................................................................... 94
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Chapter V: Reemployment Services ......................................................................................... 95

A. Introduction ........................................................................................................................ 95

1. RES and Reemployment and Eligibility Assessment Grants .................................. 96

2. Reemployment Services in the Recovery Act ......................................................... 97

B. State Approach to Recovery Act RES Funding ................................................................. 98

C. Claimants Served as a Result of Recovery Act RES Funding ........................................... 99

D. Services and Service Delivery under the Recovery Act RES Program............................ 102

1. Changes in RES Services Provided ....................................................................... 102

2. RES Service Delivery ............................................................................................ 103

E. Information Technology and Labor Market Information for RES 

through the Recovery Act................................................................................................. 104

F. Staffing for Reemployment Services through the Recovery Act ..................................... 107

G. Major RES Recovery Act Accomplishments................................................................... 108

H. Next Steps and Post-Recovery Act Priorities................................................................... 109

Chapter VI: Trade Adjustment Assistance Program............................................................ 111

A. Administrative Changes for Implementing the TAA Provisions ..................................... 112

1. Reprogramming Data Systems .............................................................................. 113

2. Merit Staff Rule ..................................................................................................... 114

B. Changes in Employers and Workers in TAA................................................................... 116

1. Number of Employers and Workers in TAA......................................................... 117

2. Types of Employers and Workers.......................................................................... 119

C. Changes in TAA Services ................................................................................................ 120

1. Counseling, Assessment, and Case Management .................................................. 120

2. Training .................................................................................................................. 122

D. Accomplishments and Challenges.................................................................................... 125

Chapter VII: Other Related Initiatives: Labor Market Information (LMI), Green Jobs, 

and Subsidized Employment.................................................................................................... 128

A. Labor Market Information Systems Improvements ......................................................... 128

B. Green Jobs Initiatives....................................................................................................... 131

C. Subsidized Employment through the TANF Emergency Fund........................................ 135

Chapter VIII: Challenges, Accomplishments, And Next Steps............................................ 140

A. Challenges ........................................................................................................................ 140

B. Accomplishments............................................................................................................. 147

C. Next Steps......................................................................................................................... 156
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Chapter IX: Unemployment Insurance .................................................................................. 157

A. Introduction ...................................................................................................................... 157

B. Overview of Recovery Act UI Provisions........................................................................ 158

C. UI Recovery Act Study Areas of Investigation................................................................ 161

D. The Research Plan ............................................................................................................ 164

Appendix I: Common UI Interview Guide............................................................................. 166

Appendix II: Pilot Florida Interview Report. ........................................................................ 176
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LIST OF EXHIBITS

Chapter I: Introduction............................................................................................................. 19

Exhibit I-1: Summary of Baseline and Recovery Act Allocations for Adult Workforce 

Programs ................................................................................................................................... 20

Exhibit I-2: Estimated Budget Effects of the UI Provisions of the Recovery Act .................. 21

Exhibit I-3: Map of States Selected for Recovery Act Study .................................................. 28

Exhibit I-4: Legend for Coding States According to Key Characteristics and

Distribution of 20 Visited States............................................................................................... 29

Exhibit I-5: Characteristics of Selected and Unselected States ............................................... 30

Exhibit I-6: Seasonally Adjusted Unemployment Rates for the United States and Sample 

States for May 2008, May 2009, and May 2010....................................................................... 34

Exhibit I-7: WIA Adult Formula and Recovery Act Allocations for Sample States PY 2008, 

2009, and 2010 .......................................................................................................................... 35

Exhibit I-8: WIA Dislocated Worker Formula and Recovery Act Allocations for

Sample States PY 2008, 2009, and 2010 .................................................................................. 36

Exhibit I-9: Wagner-Peyser Formula and Recovery Act Allocations and Reemployment 

Services Recovery Act Allocation for Sample States PY 2008, 2009, and 2010 ..................... 37

Chapter II: State Approaches to the Recovery Act ................................................................ 39

Exhibit II-1: Several Examples of Start-Up and Planning Efforts Undertaken by States in 

Response to Recovery Act Funding.......................................................................................... 42

Exhibit II-2: Estimates of State-Level Hiring of New Staff with Recovery Act Funds .......... 45

Exhibit II-3: Examples of State Approaches to Hiring New Staff 

with Recovery Act Funds.......................................................................................................... 46

Chapter III: WIA Adult and Dislocated Worker Programs ................................................. 50

Exhibit III-1: Examples of Assessment Policies and Procedures in States Visited ................. 56

Exhibit III-2: Examples of Varying Approaches by States to Encouraging Use of Recovery 

Act Funds on Training .............................................................................................................. 60

Exhibit III-3: Examples of State Approaches to Using Recovery Act Funding to Support 

Training Activities .................................................................................................................... 65

Exhibit III-4: Examples of Approaches of WIA Programs Linking with Institutions of Higher 

Education .................................................................................................................................. 73

Exhibit III-5: Examples of State Approaches to Targeting WIA Adult Services on LowIncome Individuals.................................................................................................................... 76

Exhibit III-6: Examples of State Approaches to Providing Supportive Services and NeedsRelated Payments...................................................................................................................... 80

Exhibit III-7: State Expectations of What Will Happen to WIA Program When Recovery Act 

Funds are Exhausted ................................................................................................................. 83
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Chapter IV: Wagner-Peyser Employment Services............................................................... 84

Exhibit IV-1: Challenges in Implementing Wagner-Peyser Programs 

Under the Recovery Act............................................................................................................ 91

Exhibit IV-2: Achievements in Implementing Wagner-Peyser Programs Under the Recovery 

Act ............................................................................................................................................ 93

Chapter V: Reemployment Services ........................................................................................ 95

Exhibit V-1: Recovery Act RES Investments in Assessment, Information Technology, and 

Labor Market Information ...................................................................................................... 105

Chapter VI: Trade Adjustment Assistance Program........................................................... 111

Exhibit VI-1: Percent of Study States Visited Where Administrators Reported Increased TAA 

Activity in the First Year After the New Rules Since Enactment of the Recovery Act ......... 118

Chapter VIII: Challenges, Accomplishments, and Next Steps............................................ 140

Exhibit VIII-1: Challenges Most Commonly Cited by States ............................................... 141

Exhibit VIII-2: Accomplishments Most Commonly Cited by States .................................... 148

Exhibit VIII-3: Major Accomplishments with Recovery Act Funding As Identified by State 

Workforce Agencies ............................................................................................................... 153

Chapter IX: Unemployment Insurance ................................................................................. 157

Exhibit IX-1: Estimated Budget Effects of the UI Provisions of the Recovery Act.............. 159

Exhibit IX-2: Legislative Intent of UI Recovery Act Provisions .......................................... 162
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EXECUTIVE SUMMARY

The American Recovery and Reinvestment Act of 2009 (the Recovery Act) includes 

nearly $800 billion dollars in federal spending through a number of provisions intended to result 

in rapid economic stimulus nationwide, particularly in terms of providing jobs, employment 

services, and retraining for millions of unemployed workers. Programs allocated additional 

funds in the workforce development area include the Workforce Investment Act (WIA) Adult 

Program ($494 million), the WIA Dislocated Worker program ($1,184 million), and the WagnerPeyser Act ($148 million for unrestricted services and $247 million for reemployment services). 

In the area of unemployment insurance (UI), new outlays were estimated to be roughly $45 

billion over 10 years at the time of enactment, with almost all outlays occurring in fiscal years 

2009 and 2010.

The purpose of this project is to measure progress and challenges in implementing the 

workforce and UI provisions of the Recovery Act, to highlight new and promising practices, and 

to provide guidance to the Employment and Training Administration (ETA), the states, and local 

workforce investment areas. ETA is receiving monthly reports from the states on their 

expenditures and activities, but it will not receive systematic in-depth information about the 

implementation of the workforce components of the Recovery Act. This project, involving both 

an interim report presented here and a final report due in June 2011, is intended to help fill this 

gap by providing feedback to ETA based on document review, on-line surveys, and in-depth 

field visits to selected states and sub-state areas.

Several approaches are being used to monitor implementation of the workforce 

development and UI provisions of the Recovery Act. First, the National Association of State 

Workforce Agencies (NASWA) conducted five surveys of states, many through the Internet, that 
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are highly relevant to this project. Second, regarding the workforce development provisions, two 

rounds of site visits to 20 states and two local areas within each state are being conducted in each 

year of the project. This interim report is based primarily on the first round of site visits. Site 

visits were made between December 2009 and August 2010. One day was spent interviewing 

staff at the state level, and one day was spent at each of the two local areas in each state. Sixteen 

states had been visited at the time the report was prepared. The 20 states were selected 

purposively to provide diversity on factors such as population size, unemployment rate, extent to 

which Wagner-Peyser services were provided in One-Stop Career Centers, region, UI recipiency 

rate, and relative UI trust fund solvency. Regarding the UI provisions of the Recovery Act, one 

round of in-depth teleconference interviews will be conducted with a team of UI officials in each 

of the same 20 states. Due to the desire to wait until state legislatures completed their 2010 

legislative sessions, during which many states made changes to UI laws as a result of the 

Recovery Act, the research team is just beginning teleconference interviews with state UI 

officials. Findings regarding the UI provisions will be presented in the final Recovery Act report 

due next year, but the last chapter of this interim report provides a progress report on the research 

plan for the UI provisions.

State Approaches to the Recovery Act

All state and local workforce agency officials mentioned that the time they had to plan 

and initiate Recovery Act-funded activities from the time when the President signed the 

Recovery Act into law in February 2009 until they first began spending Recovery Act resources 

on employment and training services (as early as April 2009) was very short. States had to move 

very quickly from the point at which they were notified of their Recovery Act funding allocation 
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(in March 2009) to begin spending Recovery Act funding (within a matter of weeks). ETA 

provided states with guidance and assistance immediately after the Recovery Act funds became 

available, with the major guidance provided in Training and Employment Guidance Letter 14-08, 

which was issued March 18, 2009. There was also strong pressure on states and local workforce 

agencies to spend Recovery Act funding rapidly (if possible, front-loading expenditures within 

the first year of the two years available) and, at the same time, to spend the resources wisely.

All states visited indicated that they worked within their existing organizational structure 

to both plan and implement Recovery Act activities. As noted above, states did not have the 

time to develop new or elaborate organizational structures in response to Recovery Act funding –

and because Recovery Act funding was temporary, states were reluctant to change their 

organizational structure, add new units or permanent staff, or build new infrastructure (except 

modernizing data systems) that would have required funding when Recovery Act support was no 

longer available. Because Recovery Act funding was temporary in nature, the main staffing 

strategy implemented by states and local areas was to bring on temporary staff to fill new 

positions. Hiring occurred at both the state and local levels. Several state and local workforce 

agencies indicated they had experienced some difficulties or delays in bringing on new staff 

(even temporary staff hired with federal funding) due to state or local hiring freezes; this 

occurred in spite of requests from ETA to exempt from hiring freezes positions funded with 

federal Recovery Act dollars. In some local areas, workforce agencies indicated that they needed 

even more staff than Recovery Act funding would permit to meet the surging number of 

customers. Additionally, some state and local workforce agencies indicated that mandates to 

spend WIA Recovery Act funding primarily on training cut down on their flexibility to bring on 
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additional staff to work in the resource room and provide assessment and other intensive services 

needed before individuals could enter training.

WIA Adult and Dislocated Worker Programs

States and local workforce investment areas (LWIAs) increased the number of customers 

receiving assessment and counseling, and they frequently made use of Recovery Act funding to 

add new technology to improve assessment and help customers make appropriate choices on 

careers and training programs. There was an emphasis on providing more training with 

Recovery Act funds, and all states encouraged local areas to increase training. About one-half 

the states set minimum requirements for training with Recovery Act funds, ranging as high as 70 

percent; the number of WIA adult customers receiving training increased by nearly 60 percent in 

the first 12 months following the availability of Recovery Act funds. 

The Pell Grant program, a Department of Education program that provides financial aid 

to help low-income individuals attend eligible higher education programs, was expanded with 

the Recovery Act, and states and LWIAs were encouraged to facilitate and encourage use of Pell 

Grants. About 80 percent of the states sent letters to UI claimants informing them about Pell 

Grant opportunities, and about 40 percent of the states expanded their definition of ―approved 

training‖ so that more claimants could make use of Pell Grant supported training. There was 

confusion in a few LWIAs about the use of Pell Grants, particularly regarding the definition of 

income for determining eligibility and how decisions on awards were made.

The Recovery Act encouraged states and LWIAs to enter into contracts with institutions 

of higher education as a way to train groups of students in a single field. About one-third of the 
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states visited for this study indicated that they had increased their contracts with colleges and 

universities.

ETA encouraged states and LWIAs to provide more supportive services and needsrelated payments. Most states reported increased spending on transportation and child care, but 

there was no clear pattern for needs-related payments. Because UI claimants were more heavily 

served, the lack of increased spending on needs-related payments is not surprising.

When the Recovery Act funds are exhausted, most states indicated that they plan to revert 

to prior levels of services despite expected continued high demand. States generally hired 

temporary workers for Recovery Act funded positions, so the staff reductions are not likely to 

result in layoffs of permanent staff. Some states hope to move temporary workers into 

permanent positions if they experience turnover among the permanent staff.

Wagner-Peyser Services and Reemployment Services

As a result of the increased funding and need, U.S. Department of Labor (USDOL) data 

indicate that the number of Wagner-Peyser customers increased by about 30 percent. Some 

states enhanced their assessment and counseling services by purchasing assessment tools with 

their Recovery Act funds. We did not observe a change in interactions between Wagner-Peyser 

services and WIA services as a result of the Recovery Act.

In addition to increased general Wagner-Peyser funding, the Recovery Act provided 

additional funds to provide reemployment services (RES) for UI claimants. For many states, the 

RES money was a new and large source of funds to serve claimants, and some states developed 

innovative strategies to assist UI claimants. Many of the states visited said that claimants are 

more likely to take advantage of services offered at One-Stop Career Centers than they had been 
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in the past. Eleven of 16 states visited said that RES funds were used to improve or expand labor 

market information (LMI), and 13 of the 16 states reported that they used the RES funds to hire 

temporary staff. Four of the states visited added state funding to enhance RES. States generally 

target RES on claimants predicted to be most likely to exhaust their UI benefits, but several 

states target other groups such as those least likely to exhaust or those considered particularly in 

need, such as veterans.

Trade Adjustment Assistance

The Recovery Act substantially altered the nation’s Trade Adjustment Assistance (TAA) 

program by including the Trade and Globalization Adjustment Assistance Act (TGAAA) as part 

of the Recovery Act. Since 1974, TAA has provided a range of benefits and employment 

services to workers who lose their jobs due to foreign competition or imports. The primary 

services are: 1) monthly cash benefits similar to, and coordinated with, UI; 2) access to 

employment and training services; and 3) other services and benefits including relocation 

assistance and a tax credit to cover costs of health insurance. Over the years, Congress has 

modified TAA several times, often in response to changing economic conditions. The Trade 

provisions in the TGAAA of the Recovery Act represent the latest reforms to TAA. The new 

program added service sector workers, expanded services to include assessment and counseling, 

and placed more emphasis on training. The new TAA provisions affected workers whose 

eligibility occurred after enactment of the new law. Half of the states visited saw petitions and 

participants increase by 50 percent or more. 

States visited found operating the new and old TAA programs simultaneously to be 

challenging. First, extensive reprogramming was required to meet the new reporting and cost 
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accounting requirements. Second, states had to track participants in the old and new programs 

separately, greatly increasing the number of records processed and data fields tracked. Third, it 

was difficult to explain to customers why some trade-affected workers were entitled to benefits 

while others were not.

Other Issues

The states that were visited took advantage of the Recovery Act funding to improve their 

labor market information systems and management information systems; in many states, these 

systems are outmoded, and the Recovery Act provided some of the resources needed to help 

modernize these resources. States and LWIAs were very interested in activities involving green 

jobs. The states visited conducted research and analysis to identify opportunities for 

employment and training for their customers that were related to green jobs. Almost all the 

states visited received targeted green jobs funds; more than one-half the states visited received 

State Energy Partnership and Training Grants.

Although just beginning during our site visits, many of the sample states used Temporary 

Assistance for Needy Families (TANF) Emergency Fund grants to provide subsidized 

employment to WIA customers. The Department of Health and Human Services and the 

Department of Labor (USDOL) encouraged states to make the funds available to provide 

summer youth employment and subsidized employment for low-income adults in 2010.

Major Accomplishments

During site visits, state and LWIA officials were asked to discuss their major 

accomplishments with Recovery Act funding to date. In discussing accomplishments, it is 
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important to note that the accomplishments cited are for a relatively short period of time 

following start-up of Recovery Act-funded activities—generally for a period of six months up to 

about one year after first receipt of Recovery Act funding (depending upon when the site visit 

was conducted in the state). The states listed the following six items as their major 

accomplishments in implementing the Recovery Act:

 Moving quickly to implement Recovery Act workforce provisions;

 Establishing a WIA summer youth program on short notice;

 Increased capacity of workforce system to serve more customers;

 Helping UI claimants get back to work through Reemployment Services;

 Improved ES-UI relationships and WIA partnerships with education; and

 More opportunities for Americans to acquire new skills through training.

States and LWIAs visited were proud of their ability to quickly respond to the 

requirements of the Recovery Act. Not only did they rapidly expand their existing programs, 

they also instituted summer youth programs and reemployment services on a large scale, and in 

most states these programs were not offered at the time the Recovery Act was enacted.

Challenges Encountered

The states and LWIAs visited also reported encountering a number of challenges related 

to implementing the Recovery Act. The four most common challenges are discussed here. First, 

many of the states and LWIAs reported that spending the Recovery Act funds as rapidly as ETA 

wished was difficult for a number of reasons. Some state and local areas had hiring freezes that 

prevented them from bringing on needed staff; ETA had asked states to exempt hiring financed 
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with Recovery Act funds, but some states did not honor the request or took a long time to waive 

the general requirement. In some instances, state legislatures were slow to approve spending of 

Recovery Act funds; in one of the states visited, the legislature approved use of the federal funds 

only after a three-month delay. State and local civil service hiring is often a slow process, and 

some states indicated that the normal hiring process requires many months before a position can 

be filled. Finally, at least one state reported that its collective bargaining agreement with state 

employees restricted the process by which temporary workers could be hired and how long they 

could work.

Three other challenges were cited by states. First, some states indicated the reporting 

requirements under the Recovery Act added a burden to their workload. Second, some states 

indicated the pressure to spend the money quickly was a burden. Finally, all the states visited 

stated they were concerned that once the Recovery Act funds were spent, they would have to

revert to their previous levels of service, even though the need and demand for services was 

likely to remain at record levels. 

Unemployment Insurance

As mentioned above and detailed in Chapter IX, this interim report provides a progress 

report on the UI research plan, and not interim findings. The research team is conducting 20 indepth UI interviews this fall and early winter, and findings based on these interviews, NASWA 

surveys, and USDOL data will be included in the final Recovery Act report due next year. To 

date, the research team has developed an interview guide, has conducted a pilot teleconference 

interview with the state of Florida, has amended its interview guide based on the pilot interview, 

and is scheduling and conducting the 19 remaining interviews. To prepare for the state 
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teleconference interviews, the research team has developed individual state background studies, 

which compile information on each state’s: UI program structure; historical UI program 

performance; historical and current UI program financial conditions; responses to a fifty-state 

NASWA survey on the recession and the state’s early experiences implementing the Recovery 

Act; and legislative actions, if any, regarding the UI modernization provisions of the Recovery 

Act and to address trust fund solvency.

The NASWA survey and national data from USDOL on program performance and the 

condition of states’ UI trust funds suggest the following major successes and challenges facing 

states as they implemented the Recovery Act’s UI provisions in the context of the recession: 

 Successes

1. Economic stimulus and fiscal relief

2. UI eligibility expansions

3. Sustainable improvements to UI operations

 Challenges

1. Financial condition of state trust funds

2. Outmoded state UI information technology systems

3. Growth in need for reemployment services

The interviews will seek to capture the operational and administrative challenges states 

faced implementing the UI provisions, the innovations and sustainable improvements to UI 

operations resulting from the availability of new administrative funds and the demands of the 

recession, and the extent to which the provisions achieved other Recovery Act goals for the UI 

program beyond providing economic stimulus. These goals include UI eligibility expansions, 
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improved trust fund positions, improved UI tax and benefit operations, and reemployment 

services for UI claimants.
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CHAPTER I

INTRODUCTION

A. Background and Purpose

States face important and serious policy challenges in response to the severe economic 

recession, and while the provisions in the American Recovery and Reinvestment Act of 2009 

(Recovery Act) offer opportunities for relief, implementing some of the programmatic provisions 

presents challenges to states and local areas in expanding eligibility and services, adding staff to 

meet the increased demands, and making appropriate program modifications expeditiously and 

efficaciously. Additionally, governors and state workforce agencies began taking actions to 

adjust their Unemployment Insurance (UI) systems to meet economic needs and improve trust 

fund solvency even before the Recovery Act was enacted. This project is intended to provide 

useful information about the nature of the workforce development and UI policy decisions being 

made nationwide in response to the recession, state and local administrators’ perspectives on the 

policy developments and economic challenges, and implementation of key Recovery Act

provisions. The majority of the report focuses on workforce investment initiatives in the 

Recovery Act other than UI, and UI is covered in the last chapter. As discussed there, interim 

findings are not yet available for the UI portion of the project, so the chapter provides a progress 

report on the research plan instead.

The Recovery Act includes nearly $800 billion dollars in federal spending through a 

multitude of provisions that are intended to result in rapid economic stimulus nationwide, 

particularly in terms of providing jobs, employment services, and retraining for millions of 

unemployed workers. Exhibit I-1 summarizes the formula allocations for the major USDOL 
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workforce programs in Program Year 2009 and the additional funds provided for these programs 

through the Recovery Act. The WIA Dislocated Worker program received the largest increase in 

funding through the Recovery Act, both in relative and absolute terms, with over $1 billion in 

additional funding. The unrestricted Wagner-Peyser Act funds were increased by the smallest 

amount, $148 million, but an additional $247 million in Recovery Act funds were included for 

Reemployment Services, which had received no funding in recent years.

Exhibit I-1

Summary of Baseline and Recovery Act Allocations for Adult Workforce Programs

Program and Year Allocation

WIA Adult

PY 2009 $859,386,233

Recovery Act 493,762,500

WIA Dislocated Worker

PY 2009 1,183,840,000

Recovery Act 1,237,500,000

Wagner-Peyser (unrestricted)

PY 2009 701,860,926

Recovery Act 148,138,009

Wagner-Peyser Reemployment Services

PY 2009 0

Recovery Act 246,896,681

The Recovery Act included several major UI program tax and spending provisions which 

at the time of passage were estimated to result in federal outlays totaling approximately $45 

billion over 10 years, with most outlays occurring in fiscal years 2009 and 2010 (see Exhibit I-2 

below). Note that provisions increasing benefit duration and amounts were extended by 

subsequent legislation as the recession continued.
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Exhibit I-2: Estimated Budget Effects of the UI Provisions of the Recovery Act

Recovery Act Provision Explanation of Provision

Estimated 

Budget Effects 

FY 2009-19

Benefit Extensions

 Extended the Emergency Unemployment Compensation 

program through December 26, 2009 (subsequently extended).

 Provided 100% federal financing of the Extended Benefits (EB) 

program in 2009 (subsequently extended).

$27 billion

Benefit Increase

Provided a temporary $25 per week supplemental unemployment 

benefit, known as the Federal Additional Compensation (FAC) 

program (subsequently extended).

$8.8 billion

Interest Free Loans Temporarily waived interest payments and the accrual of interest on 

federal loans to states through December 31, 2010. $1.1 billion

Suspension of Federal Income 

Tax

Temporarily suspended federal income tax on the first $2,400 of 

unemployment benefits (per recipient) received in 2009.

$4.7 billion

UI Modernization

Provided up to a total of $7 billion as incentive payments for changing 

certain state UC laws; payments must be made before October 1, 

2011. $2.6 billion

Administrative Funding Transferred $500 million to the states for administration of their 

unemployment programs.

Total $44.7 billion

Sources: U.S. Joint Committee on Taxation, ―Estimated Budget Effects of the Revenue Provisions 

Contained in the Conference Agreement for H.R. 1, the ―American Recovery and Reinvestment Act of 

2009,‖ JCX-19-09, February 12, 2009, http://finance.senate.gov; Committee on Finance, U.S. Senate, 

News Release, ―Baucus Hails Senate Passage of Bill Creating Jobs, Cutting Taxes for America’s Working 

Families and Small Businesses,‖ February 10, 2009, http://finance.senate.gov.

Many of the spending provisions in the Recovery Act also relate to workforce 

investments and are designed to provide investments in areas that are in great need nationally to 

improve infrastructure, accelerate the development of a range of energy efficient ―green‖ sectors, 

and increase the supply of trained and skilled workers needed in high growth sectors such as 

energy and health care. 
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Several Recovery Act provisions that are not the subject of this report deserve mention. 

Two Recovery Act provisions for which state or local workforce agencies and One-Stop Career 

Centers have some involvement are: (a) use of or explanation of tax credits for hiring particular 

workers such as veterans or disadvantaged youth; and (b) designing or implementing major parts 

of subsidized employment programs that could be funded with the TANF Emergency Funds. 

The role of the workforce investment system in the TANF-funded subsidized employment 

initiative is in addition to the roles states and local workforce agencies may already have for the 

work program components of TANF (i.e., in many states, the TANF agency contracts with the 

workforce agency to operate the TANF employment program or parts of it). Three grant 

programs included in the Recovery Act also fund job training: the Trade Adjustment Assistance 

for Communities Grant Program ($56.25 million, administered by the Department of 

Commerce), the Community College and Career Training Program ($90 million, administered by 

the Employment and Training Administration (ETA)), and the Sector Partnership Grants 

Program ($90 million, administered by ETA).

In sum, the Recovery Act is providing the workforce system with a large increase in 

resources to improve its structure, increase capacity, and provide additional services. ETA stated 

that spending under the Recovery Act is to be guided by four principles described in Training 

and Guidance Letter (TEGL) 14-08:

 Transparency and accountability in the use of Recovery Act funding;

 Timely spending of the funds and implementation of the activities; 

 Increasing workforce system capacity and service levels; and
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 Using data and workforce information to guide strategic planning and service 

delivery.1

The purpose of this project is to measure progress and challenges in implementing the workforce 

and UI provisions of the Recovery Act, to highlight new and promising practices, and to provide 

guidance to ETA, the states, and local workforce investment areas. ETA is receiving monthly 

reports from the states on their expenditures and activities, but it will not receive systematic indepth information about the implementation of the workforce components of the Recovery Act. 

This project is intended to help fill this gap by providing feedback to ETA based on document 

review, on-line surveys, and in-depth field visits to selected states and sub-state areas.

B. Components of the Project

This project is using several approaches to monitor Recovery Act implementation. First, 

NASWA has conducted, with its own resources, five surveys of states, many through the 

Internet, that are highly relevant to this project. NASWA staff has analyzed the data from the 

surveys on workforce and UI programs and produced reports on the findings.2 NASWA will 

conduct additional surveys of states in the second year of the project.

The second major component of the project is based largely on two rounds of site visits to 

20 states and two local areas within each state; one round of site visits is to be conducted in each 

year of the project. This component of the project is being conducted by staff from the 

 

1

See U.S. Department of Labor, Employment and Training Administration Training and Employment 

Guidance Letter No. 14-08 ―Guidance for Implementation of the Workforce Investment Act and Wagner-Peyser Act 

Funding in the American Recovery and Reinvestment Act of 2009 and State Planning Requirements for Program 

Year 2009.‖ March 18, 2009.

2

The major survey report is: Center for Employment Security Education and Research, National 

Association of State Workforce Agencies. ―Results of a Survey of State Workforce Administrators on Early 

Implementation of the Workforce Provisions of the Recovery Act.‖ Washington, DC: NASWA, May 10, 2010.
24

Trachtenberg School of Public Policy and Public Administration at George Washington 

University, Capital Research Corporation, the Ray Marshall Center at the University of Texas, 

and the Urban Institute.3 Site visits are used to probe in depth on topics such as the use of 

stimulus funds, information on how spending and policy decisions were made, and challenges 

and accomplishments of the Recovery Act activities. It is this second component that is the 

subject of the current report. Because the UI provisions of the Recovery Act are best studied 

centrally with conference calls to the 20 site visit states, the research plan for the UI portion of 

the project differs in approach and timing, and a progress report is presented separately in the 

final chapter of this report. Also, although the WIA Youth program was an important 

component of the stimulus program, this report does not cover the WIA Youth program to a 

substantial degree because ETA had another research firm document the Recovery Act 

experience of the WIA Youth program.

C. Description of the 20-State Survey

This section describes how the 20 states were selected, lists the 20 states, and shows how 

the states in the sample vary on key characteristics. States for the site visits were chosen from 

the 50 states and the District of Columbia. The sample was selected purposively, with the goal 

of including states so that the sample was balanced on several key attributes. Because of the 

need to expedite the site visits, three pilot states, New York, Texas, and Wisconsin, were visited 

first; these initial states were selected because of their good working relationship with NASWA, 

so that travel could be arranged quickly and feedback on the survey instrument could be 

 

3

In the first year of the project, the Institute for Policy Studies at Johns Hopkins University participated.
25

obtained. The remaining states were then picked to achieve the desired distribution based on the 

following characteristics: 

 Population. It was decided to emphasize more populous states so that a 

substantial share of the U.S. population would be covered by the site visits. The 

sample included 12 of the 17 most populous states, 4 of the next most populous 

17 states, and 4 of the least populous states.

 Co-Location of Employment Service offices. The presence of the Employment 

Service (ES) in One-Stop Career Centers varies significantly among states. 

Because some Recovery Act activities might take different forms when the ES is 

more isolated from the One-Stop system, a mix of relationships between the ES 

and One-Stops was obtained. We used the taxonomy developed by the 

Government Accountability Office to classify these relationships and selected 

states roughly in proportion to their prevalence among states.

4

 Total unemployment rate. States with relatively high unemployment rates are 

of more interest, so a disproportionate share of states in the upper third were 

selected, and a small number of states in the bottom third were selected. The 

sample of 20 includes nine states in the upper third in terms of the unemployment 

rate, seven in the middle third, and 4 in the bottom third.

 Reserve ratio multiple (RRM). The RRM is a measure of UI trust fund 

solvency, with a higher multiple indicating a greater ability to avoid borrowing 

during a severe economic downturn. We wanted to oversample states with 

insolvency problems to better observe how states under stress dealt with the UI 

reforms and other Recovery Act provisions. We selected five states from the 

upper third, six states from the middle third, and nine states in the bottom third.

 Region. We wanted to achieve rough geographic balance among the four broad 

census regions. The sample included four states from the Northeast, six from the 

Midwest, six from the South, and four from the West.

 UI recipiency rate. This variable measures the proportion of the unemployed 

that are receiving UI. We wanted to achieve a balanced sample on this variable. 

The sample included seven states in the upper third, seven states in the middle 

third and six states in the bottom third.

 

4 Government Accountability Office, Workforce Investment Act: One-Stop System Infrastructure 

Continues to Evolve, but Labor Should Take Action to Require That All Employment Service Offices Are Part of the 

System, GA0-07-1096, September 2007 (see Figure 3 and Appendix 6).
26

Overall, the sample of states selected appears to do a good job of meeting the criteria we 

identified. Exhibit I-3 shows a map of the 20 selected states. Three of the originally selected 

states declined to participate—California, Connecticut, and Kentucky. They were replaced with 

Colorado, Montana, and Rhode Island. Adding Montana provided a second single-WIB state (in 

addition to North Dakota). Colorado added a second state (in addition to Michigan) permitted to 

provide Wagner-Peyser services through local merit staff rather than with state merit staff 

employees. Exhibit I-4 contains a legend for the codes used to categorize states by the key 

characteristics and the number of sample states in each category. Exhibit I-5 shows the states 

selected (shaded) and other states, and includes data on their characteristics. At the time this 

report was prepared, 19 states had their site visits completed, but four of the states were visited 

too recently to reflect the findings in this report (Rhode Island, North Carolina, Maine and 

Nebraska). 

For each state in the sample, visits were conducted at the state level and at two local sites. 

Local sites were selected to provide variation in the types of areas visited and, to a lesser extent, 

geographic convenience. Meetings were held at the state and local levels with key officials 

responsible for workforce programs affected by the Recovery Act—WIA Adult, WIA Dislocated 

Workers, Wagner-Peyser funded activities, Trade Adjustment Assistance, and the agency 

responsible for Reemployment Services.5 Each state and local site visit required approximately 

one day, for a total of three days per state. 

The site visits were conducted using semi-structured guides for the state and local levels. 

The guides were tested in the first three states, Wisconsin, Texas, and New York, and then 

 

5 As noted above, the visits did not focus on the WIA youth program. After the initial visits, it was 

determined that UI was best covered through teleconference interviews rather than through the site visits.
27

revised for the later site visits. Prior to each site visit, the site visit team obtained key documents 

from Internet sites and from the state and local staff.
28

Exhibit I-3: Map of States Selected for Recovery Act Study

Original site visit state 

Newly added site visit state 

State not available for site visit 
29

Exhibit I-4: Legend for Coding States According to Key Characteristics and

Distribution of 20 Visited States

Region Number

1 Northeast 4

2 Midwest 6

3 South 6

4 West 4

Population

1 High third (from TN at 6,214,888 to CA at 36,756,666) 12

2 Middle third (from UT at 2,736,424 to MO at 5,911,605) 4

3 Low third (from WY at 532,668 to NV at 2,600,167) 4

ES/One-Stop Relationship6

1 Category A 3

2 Category B 3

3 Category C 1

4 Category D 13

Total Unemployment Rate (at the 

time of site selection)

1 High third (from WA at 9.3% to MI at 15.2%) (9) 9

2 Middle third (from TX at 7.5% to MO at 9.3%) (7) 7

3 Low third (from ND at 4.2% to MD at 7.3%) (4) 4

Reserve Ratio Multiple

1 High third (from VT at .71 to NM at 1.60) 5

2 Middle third (from TN at .30 to IA at .68) 6

3 Low third (from MI at -.02 to MA at .28) 9

UI Recipiency Rate

1 High third (from HI at .359 to CT at .553) 7

2 Middle third (from NE at .278 to MN at .358) 7

3 Low third (from SD at .153 to SC at .277) 6

 

6 We used the taxonomy developed by the Government Accountability Office to classify these 

relationships. See: Government Accountability Office, Workforce Investment Act: One-Stop System Infrastructure 

Continues to Evolve, but Labor Should Take Action to Require That All Employment Service Offic es Are Part of the 

System, GA0-07-1096, September 2007 (see Figure 3 and Appendix 6).
30

Exhibit I-5: Characteristics of Selected and Unselected States *

Region

Population

Size ES-One

Unemployment 

Rate

Reserve 

Ratio 

Multiple

Unemployment 

Insurance 

Recipiency 

Rate

Stop

Relationship

Connecticut 1 2 1 2 3 1

Maine 1 3 4 2 1 2

Massachusetts 1 1 4 2 3 1

New Hampshire 1 3 4 3 2 3

New Jersey 1 1 4 2 3 1

New York 1 1 4 2 3 2

Pennsylvania 1 1 4 2 3 1

Rhode Island 1 3 4 1 3 1

Vermont 1 3 4 3 1 1

Illinois 2 1 2 1 2 2

Indiana 2 1 4 1 3 2

Iow a 2 2 1 3 2 1

Kansas 2 2 3 3 1 2

Michigan 2 1 4 1 3 1

Minnesota 2 2 4 2 2 2

Missouri 2 2 4 2 3 2

Nebraska 2 3 4 3 1 2

North Dakota 2 3 4 3 1 2

Ohio 2 1 4 1 3 3

South Dakota 2 3 4 3 3 3

Wisconsin 2 2 4 2 3 1

Alaska 4 3 4 2 1 1

California 4 1 2 1 3 1

Haw aii 4 3 1 3 1 1

Oregon 4 2 4 1 1 1

Washington 4 1 4 1 1 1

Alabama 3 2 4 1 2 2

Arkansas 3 2 2 3 3 2

Delaw are 3 3 2 2 2 1

District of Columbia 3 3 4 1 1 2

Florida 3 1 4 1 2 3

Georgia 3 1 4 1 2 3

Kentucky 3 2 1 1 3 2

Louisiana 3 2 4 3 1 3

Maryland 3 2 4 3 2 3

Mississippi 3 2 4 2 1 3

North Carolina 3 1 2 1 3 2

Oklahoma 3 2 1 3 1 3
31

Region

Population

Size ES-One 

Stop 

Relationship

Unemployment 

Rate

Reserve 

Ratio 

Multiple

Unemployment 

Insurance 

Recipiency 

Rate

South Carolina 3 2 3 1 3 3

Tennessee 3 1 2 1 2 2

Texas 3 1 4 2 2 3

Virginia 3 1 1 3 2 3

West Virginia 3 3 1 2 2 2

Arizona 4 1 3 2 2 3

Colorado 4 2 4 2 2 3

Idaho 4 3 4 2 2 1

Montana 4 3 1 3 1 2

Nevada 4 3 4 1 2 1

New Mexico 4 3 1 3 1 3

Utah 4 2 4 3 1 3

Wyoming 4 3 4 3 1 3

* Shaded states are those selected for site visits. See Exhibit I-4 for legend for codes.
32

D. Comparison of Sample States to the Nation

The 20 states in our sample can be compared with each other as well as to the country as 

a whole. In this section, the sample states are compared on their unemployment situation in 

recent years and their funding levels. Exhibit I-6 shows the seasonally adjusted unemployment 

rates for the 20 states in the sample and the United States as a whole for May 2008, May 2009, 

and May 2010. For the nation as a whole, the unemployment rate surged between May 2008 and 

May 2009, rising from 5.4 percent to 9.4 percent. In the subsequent 12 months, the national rate 

increased slightly to 9.7 percent.

Exhibits I-7, I-8, and I-9 show formula and Recovery Act funding for the WIA Adult, 

WIA Dislocated Worker, and Wagner-Peyser/RES programs for the 20 states visited and the 

entire country for program years 2008, 2009, and 2010. The tables provide some important 

context for the analyses that follow.

 Overall formula funding for all three programs was flat for PY 2008, 2009, and 2010. 

Although there were changes for the 20 sample states in total, the changes were small, 

(under 5 percent).

 Although the overall formula funding was flat over the three years, there were 

substantial changes in individual states. For example, Florida’s WIA Adult formula 

funding increased by 30 percent between 2008 and 2009 and an additional 30 percent 

between 2009 and 2010. Texas, however, lost 10 percent of its WIA Adult funding 

each year, while Rhode Island and Nebraska remained virtually unchanged for all 

three years.

 Year-to-year changes for individual states were small for the Wagner-Peyser formula 

allocations. Changes from one year to the next rarely exceeded 3 percent, and the 

largest change was for Florida, whose formula allocation increased by 7.85 percent 

from PY 2008 to PY 2009.

 The WIA Dislocated Worker formula allocations were the most volatile. Florida and 

Nevada, which were hit particularly hard by the recession, had increases in their WIA 

Dislocated Worker formula funds between PY 2008 and PY 2009 of 145 percent and 

135 percent, respectively. Michigan, which has had the highest or near the highest 

unemployment rate in the nation in recent years, had a decrease of nearly 43 percent 
33

in its WIA Dislocated Worker funds from PY 2008 to PY 2009 and a further decline 

of 14 percent the following year.7

 The Recovery Act funds represented a sizeable increase in funding for the states. As 

a percentage of PY 2008 formula funds, Recovery Act funds were 57 percent, 105 

percent, and 56 percent for the WIA Adult, WIA Dislocated Worker, and WagnerPeyser (including RES funds) programs.

 

7

The large swings in funds to particular states are caused by the allocation formulas, which are based on 

the relative shares of people with characteristics used in the formulas, such as unemployment and low income. 

Thus, a state with high but steady unemployment will see its funding decrease if funding is flat and unemployment 

rises in other states.
34

Exhibit I-6

Seasonally Adjusted Unemployment Rates for the United States

and Sample States for May 2008, May 2009, and May 2010

State May 2008 May 2009 May 2010

Arizona 5.2 9.2 9.6 

Colorado 4.5 8.2 8.0 

Florida 5.7 10.2 11.7 

Illinois 6.2 10.0 10.8 

Louisiana 3.9 6.8 6.9 

Maine 4.9 8.2 8.0 

Michigan 7.7 13.6 13.6 

Montana 4.3 6.0 7.2 

Nebraska 3.1 4.7 4.9 

Nevada 5.9 11.5 14.0 

New York 4.9 8.4 8.3 

North Carolina 5.6 10.9 10.3 

North Dakota 3.0 4.4 3.6 

Ohio 6.2 10.3 10.7 

Pennsylvania 5.0 8.0 9.1 

Rhode Island 7.2 10.7 12.3 

Texas 4.6 7.5 8.3 

Virginia 3.6 6.8 7.1 

Washington 5.0 9.1 9.1 

Wisconsin 4.4 8.9 8.2 

United States 5.4 9.4 9.7

Source: http://www.bls.gov/lau/ and 

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000. 
35

Exhibit I-7

WIA Adult Formula and Recovery Act Allocations for

Sample States PY 2008, 2009, and 2010

PY 2008 PY 2009

Recovery 

Act PY 2010

Arizona 14,729,041 13,256,136 7,616,346 15,227,363

Colorado 9,267,816 8,341,034 4,792,362 10,028,610

Florida 26,037,659 33,848,953 19,448,002 44,003,639

Illinois 38,269,186 44,888,169 25,790,612 40,399,352

Louisiana 16,831,051 15,147,944 8,703,290 13,633,150

Maine 3,100,278 3,146,947 1,808,086 3,276,134

Michigan 54,246,181 53,707,324 30,857,680 48,336,592

Montana 2,148,466 2,148,465 1,234,406 2,281,343

Nebraska 2,148,466 2,148,465 1,234,406 2,148,465

Nevada 4,541,567 5,904,037 3,392,179 7,675,248

New York 53,779,185 54,853,314 31,516,111 51,297,403

North Carolina 17,815,089 17,991,679 10,337,165 23,389,183

North Dakota 2,148,466 2,148,465 1,234,406 2,148,465

Ohio 45,226,257 40,703,627 23,386,373 36,633,264

Pennsylvania 29,938,257 28,797,617 16,545,744 29,034,229

Rhode Island 2,820,312 3,666,405 2,106,542 3,919,536

Texas 66,418,400 59,776,554 34,344,771 53,798,899

Virginia 8,520,288 9,098,617 5,227,634 11,828,202

Washington 18,747,476 16,872,727 9,694,268 16,563,114

Wisconsin 10,024,911 9,022,419 5,183,854 11,729,145

Study States 426,758,352 425,468,898 244,454,237 427,351,336

National Totals 859,386,233 859,386,233 493,762,500 859,386,150
36

Exhibit I-8

WIA Dislocated Worker Formula and Recovery Act Allocations for

Sample States PY 2008, 2009, and 2010

PY 2008 PY 2009 Recovery Act PY 2010

Arizona 11,442,222 16,648,405 17,403,029 22,788,184

Colorado 11,038,608 13,837,694 14,464,916 14,509,305

Florida 31,390,061 77,059,075 80,551,937 83,019,633

Illinois 46,802,246 65,561,923 68,533,653 54,673,396

Louisiana 9,714,609 8,857,065 9,258,530 9,812,674

Maine 3,640,936 4,373,817 4,572,069 4,578,544

Michigan 130,811,617 75,050,239 78,452,046 64,544,036

Montana 1,584,735 1,679,893 1,756,038 2,174,950

Nebraska 3,186,136 2,478,758 2,591,113 2,428,300

Nevada 5,820,504 13,691,153 14,311,733 14,124,712

New York 50,790,224 63,490,356 66,368,188 65,534,311

North Carolina 33,828,640 42,493,181 44,419,273 44,039,515

North Dakota 1,171,809 876,713 916,452 690,086

Ohio 79,971,002 55,974,110 58,511,252 51,610,221

Pennsylvania 32,959,310 40,639,918 42,482,006 39,561,993

Rhode Island 4,600,258 7,601,362 7,945,909 6,227,600

Texas 57,630,386 51,436,825 53,768,305 61,378,563

Virginia 12,727,010 13,503,287 14,115,351 18,472,220

Washington 22,166,920 21,181,897 22,142,010 24,271,171

Wisconsin 25,748,373 15,363,236 16,059,607 19,934,322

Study States 577,025,606 591,798,907 618,623,417 604,373,736

National Totals 1,183,839,562 1,183,840,000 1,237,500,000 1,183,840,000
37

Exhibit I-9

Wagner-Peyser Formula and Recovery Act Allocations and Reemployment Services 

Recovery Act Allocation for Sample States PY 2008, 2009, and 2010

PY 2008 PY 2009 PY 2010 RES

Recovery 

Act

Other WP

Arizona 12,160,434 12,477,755 12,822,660 4,389,354 2,633,613

Colorado 10,962,418 11,037,674 10,944,825 3,882,771 2,329,663

Florida 36,484,397 39,347,985 40,350,319 13,841,612 8,304,967

Illinois 29,255,214 29,435,140 29,258,315 10,354,527 6,212,717

Louisiana 9,697,828 9,223,752 9,018,836 3,244,680 1,946,808

Maine 3,788,482 3,789,556 3,789,556 1,333,069 799,841

Michigan 25,087,225 24,621,640 24,475,871 8,661,262 5,196,757

Montana 5,206,014 5,207,490 5,207,490 1,831,862 1,099,117

Nebraska 6,256,606 6,258,380 6258380 2,201,537 1,320,923

Nevada 5,753,058 6,167,234 6,370,598 2,169,475 1,301,685

New York 41,433,656 40,607,026 40,405,589 14,284,511 8,570,706

North Carolina 19,216,352 19,706,162 20,093,605 6,932,122 4,159,274

North Dakota 5,301,280 5,302,783 5,302,783 1,865,383 1,119,230

Ohio 26,981,411 26,681,937 26,537,471 9,386,022 5,631,613

Pennsylvania 27,184,396 26,826,020 26,651,245 9,436,706 5,662,024

Rhode Island 2,550,164 2,661,374 2,652,902 936,203 561,722

Texas 49,518,743 48,305,269 48,080,415 16,992,555 10,195,533

Virginia 15,191,777 15,659,584 15,795,653 5,508,640 3,305,184

Washington 14,814,472 14,623,623 14,688,343 5,144,216 3,086,529

Wisconsin 13,355,215 12,954,947 12,881,393 4,557,218 2,734,331

Study States 360,199,142 360,895,331 361,586,249 126,953,725 76,172,237

National Totals 701,661,936 701,860,926 701,860,926 246,896,681 148,138,009
38

The widely varying experiences in economic conditions and funding allocations play 

important roles in the experiences of the states in our sample. For example, several states in the 

sample are small and have low unemployment rates—Montana, Nebraska, and North Dakota. 

These three states received the minimum allocation for the WIA Adult program in at least one 

program year. Thus, these states are likely to have more resources per eligible person than the 

other states. Another interesting example is that Wisconsin’s WIA Dislocated Worker formula 

allocation dropped by 40 percent between PY 2008 and 2009, from $25.7 million to $15.4 

million. The Recovery Act WIA Dislocated Worker funds of $16.1 million largely served to 

replace the drop in formula funds.

E. Outline of the Remainder of the Report

Chapter II of the report describes the general approach states have taken to administering 

their Recovery Act funds. Chapter III describes how WIA Adult and Dislocated Worker 

Recovery Act funds were administered and used. In Chapter IV, the Wagner-Peyser Act is 

discussed. Chapter V provides a description of how the funds allocated for Reemployment 

Services for UI claimants were used. This is followed by a discussion in Chapter VI of the Trade 

Adjustment Act. Chapter VII describes state initiatives in other areas of interest, such as green 

jobs initiatives, labor market information, and TANF-financed jobs for low-income individuals. 

Conclusions and a discussion of next steps are provided in Chapter VIII. Chapter IX provides a 

progress report on the research plan for the UI section of the report.
39

CHAPTER II

STATE APPROACHES TO THE RECOVERY ACT

This chapter examines the general approach that states and local workforce agencies took 

in planning and initiating workforce investment activities with Recovery Act funding. As 

discussed in this chapter, states and localities were strongly encouraged by USDOL to begin 

spending Recovery Act funding quickly after they were notified of their allocation – and to make 

certain that expenditures adhered to Recovery Act requirements and provided long-term benefits 

to worker and employer customers of the public workforce system (i.e., through the WIA, 

Wagner-Peyser/ES, and TAA programs). This chapter describes early planning and start-up of 

Recovery Act funded activities, organizational and staffing responses to the availability of 

Recovery Act funding, technical assistance and training activities involved in initiating Recovery 

Act-funded employment and training activities, and early patterns of states’ expenditures of 

Recovery Act funds.

A. Early Planning and Start-Up

All state and local workforce agency officials mentioned that the time they had to plan 

and initiate Recovery Act-funded activities from the time when the President signed the 

Recovery Act into law in February 2009 until they first began spending Recovery Act resources 

on employment and training services (as early as April 2009) was very short. States had to move 

very quickly from the point at which they were notified of their Recovery Act funding allocation 

(in March 2009) to begin spending Recovery Act funding (within a matter of weeks). There was 

also strong pressure on states and local workforce agencies to spend Recovery Act funding 
40

rapidly (if possible, front-loading expenditures within the first year of the two years available) 

and, at the same time, to spend the resources wisely. In particular, states and local areas 

indicated that they were under intense pressure to plan and implement WIA summer youth 

programs, which in many localities had either not been operational or were serving small 

numbers of youth because of lack of funding for summer youth programs. These programs had 

to ramp up and be fully operational (and capable of serving in some urban areas thousands of 

youth) within several months (by no later than June 2009). For many states and localities, this 

meant recruiting large numbers of organizations (government, nonprofit organizations, and forprofit firms) willing to hire youth temporarily for the summer, as well as outreaching to youth 

and certifying their eligibility to participate in the program. As is discussed later in this report, 

when asked about their greatest accomplishments with Recovery Act funding, many states and 

localities pointed to their rapid start-up of the summer youth program and their ability to place 

hundreds or thousands of youth in summer jobs so quickly. 

At the same time states and local workforce agencies were pushing quickly to initiate or 

expand their summer youth programs, they were trying to digest the rules and regulations for 

spending Recovery Act funds in other programs (e.g., the WIA Adult and Dislocated Worker 

programs, the Wagner-Peyser/Employment Service program, Reemployment Services (for UI 

claimants), and the UI program). For example, workforce programs were exploring ways to 

increase the number of customers receiving training; offer new and innovative training options in 

high demand occupations; expand services available to unemployed and underemployed 

workers; respond to surging volumes of customers in One-Stop Centers; and improve data 

systems to track Recovery Act expenditures and better report on program results. As noted later 

in the report, some states expressed concern that guidance from ETA was slower than they would 
41

have liked in a few instances. Exhibit II-1 provides several examples of the ways in which states 

responded quickly to the sudden availability of Recovery Act funding. 

One of the reasons states were able to respond quickly is that they had heard that 

Recovery Act funding might become available in early 2009, and governors and state workforce 

agency staff proactively began to plan how to react if funding did become available. Second, as 

soon as the legislation was enacted, state workforce agencies immediately identified agencies 

and staff (generally existing administrators) to be involved in planning the state’s response, and 

they formed steering committees to help with planning and overseeing Recovery Act

implementation. As discussed later in this chapter, states also relied upon and sought out 

training and technical assistance provided by the ETA national and regional offices, as well as 

guidance provided by national workforce associations. Because of the magnitude of the 

Recovery Act funding received (for example, WIA Adult and Dislocated Worker Recovery Act

funding under the Recovery Act often nearly matched the formula funds received for a single 

year), the scrutiny that this funding was likely to receive, and the speed with which Recovery Act

funding was to be spent, state and local workforce agencies felt a great deal of pressure to 

carefully plan their responses to the Recovery Act but at the same time to ―hit the ground 

running.‖ 

B. Organizational and Staffing Response

All states visited indicated that they worked within their existing organizational structure 

to both plan and implement Recovery Act activities. As noted above, states did not have the 

time to develop new or elaborate organizational structures in response to Recovery Act funding –

and because Recovery Act funding was temporary, states were reluctant to change 
Exhibit II-1: Several Examples of Start-Up and Planning Efforts Undertaken by States in 

Response to Recovery Act Funding

42

STATE OVERVIEW OF STATE START-UP AND PLANNING RESPONSE

Arizona Arizona began planning for Recovery Act funds prior to the signing of the law. Arizona Department of 

Economic Security officials (DES) maintain good relationships with USDOL officials at the national and regional 

levels. In addition, the then-head of Arizona’s Employment Administration served on a number of advisory 

committees and is active in (and the current President of) NASWA. These connections helped the state to stay on

top of Recovery Act legislation and to begin planning in advance. Officials noted that since the funding flowed 

through the governor’s office rather than directly to DES, there was some delay in receiving the funds while the 

governor completed strategic planning processes and prepared a website to track the funds. Arizona officials 

participated in a number of information and technical assistance forums, including webinars and conference calls. 

There were statewide meetings with local boards to discuss plan modifications and other requirements.

Colorado The start-up time was very short for the state with regard to learning about and beginning to spend Recovery Act

funds. The agency learned about Recovery Act funding under the Recovery Act in TEGL 1-08 (issued by 

USDOL in late February 2009). Recovery Act WIA and WP funds were allocated and made available to the 

workforce regions within the state on March 6, 2009 and, with the exception of RES funds, were targeted for total 

expenditure by June 30, 2010. Recovery Act -funded Summer Youth Employment programs were launched 

between May 1 and July 1, with 70 percent of WIA youth funds targeted for use by September 30, 2009. Local 

workforce areas were encouraged to spend their youth funds during the first summer in which Recovery Act

funds were available. 

Florida As soon as discussion began about the federal stimulus effort, Florida officials knew that the key was to move 

quickly and to get the local WIBs involved. The day following receipt of the funds from USDOL in March 2009,

the funds were distributed to the local WIBs. State staff also attended many meetings in Washington, with 

NASWA and with USDOL, and they communicated everything they learned to the local WIBs. The state agency 

held regional meetings with the local WIBs, quickly set up a website and posted Qs and As on the site and set up 

a separate website for the Florida Back to Work program. They established several teams (e.g., for RES, Summer 

Youth, Workforce Florida, and agency and regional workforce boards), to be sure the information got out as well 

as conveying the urgency to spend funds wisely. Through conference calls and lots of communication, the local 

WIBs knew everything the state knew. Out of this process,the state developed extensive plans, program 

guidance, and training. They had an experienced workforce investment systemthat was prepared to deliver 

services, and had no need for additional training. They pushed the local WIBs to spend as much money in the 

first year as possible and required all local WIBs to submit their plans for implementing the Recovery Act by late

August. They also required all local WIBs to submit a plan modification for the Recovery Act just as USDOL 

required of the state. The state distributed funds in March 2009.

Louisiana State officials heard about the Recovery Act as soon as the President signed the bill. Within a few days,they 

were informed of their funding amounts from the USDOL Regional Office (RO), who inquired about whether 

they had a plan, and they started planning immediately, before the funds were in fact awarded. Similarly, they 

initiated conversations with the local WIBs in order to get their planning started. The state in turn provided some 

training to the LWIBs consisting of one major meeting and weekly conference calls, principally focused on the 

summer youth program. For example, state staff helped one LWIB develop their recruitment approach.

Wisconsin The start-up time was very short for the state with regard to learning about and beginning to spend Recovery Act

funds. The time line was as follows:

 2/09 - Recovery Act passes; 

 3/09 – USDOL informs states about funding, rules, and regulations for Recovery Act; 

 4/09 – Wisconsin plans and begins to expend Recovery Act funds; 

 6/09 – the state makes substantial expenditures of Recovery Act funds on WIA summer youth program.

Prior to the Recovery Act enactment, the Governor pulled together his Cabinet to initiate planning for activities 

and rapid start-up (and expenditure) of stimulus funds; there was also a statewide committee, the Office of 

Recovery and Reinvestment was (ORR), formed which met beginning in December 2008 to begin planning 

Recovery Act activities and spending so the state ―could hit the ground running.‖ Two state staff persons were 

assigned to work full time to help plan and coordinate Recovery Act activities. The Department of Workforce 

Development established a cross-divisional steering committee with various internal workgroups, which planned 

activities and aimed at both maximizing funding and getting funds out the door as quickly as possible. The state 

staff accomplished this planning effort (under tight time constraints) without help from vendors.

Note: Exhibit is based on site visits conducted to states between December 2009 and June 2010.
43

their organizational structure, add new units or permanent staff, or build new infrastructure 

(except modernizing data systems) that would have required funding when Recovery Act support 

was no longer available. In addition, states already had the substantive experience within 

existing organizational units and programs to plan and implement Recovery Act-funded 

employment and training activities. A further impetus to maintaining organizational structure 

was that the Recovery Act did not create any new programs, and funding flowed directly to 

existing programs.

Despite making no discernable changes to organizational structures of their workforce 

systems, all states—and to varying degrees local workforce areas—used Recovery Act funding 

to add new staff to respond to Recovery Act mandates to provide additional/enhanced services 

(e.g., expansion or creation of Reemployment Services) and/or to meet the rapidly rising tide of 

newly unemployed or underemployed workers flooding One-Stop Career Centers. Because 

Recovery Act funding was temporary in nature, the main staffing strategy implemented by states 

and local areas was to bring on temporary staff to fill new positions. Hiring occurred at both the 

state and local levels. For example, states distributed much of the WIA Recovery Act funds by 

formula to local workforce investment areas, where hiring did occur, much of it by LWIBs or 

contractors (e.g., to staff resource rooms in One-Stops or to provide intensive/training services). 

The number of staff hired at the local level—particularly those hired by contractors—could 

generally not be estimated by state workforce agencies. Some hiring of new, usually temporary, 

staff also occurred at the state level. Often this staff was hired to augment state staff involved in 

administering Wagner-Peyser/ES activities, Re-employment Services, and Trade Adjustment 

Assistance (TAA). Often these temporary, Recovery Act-funded state Wagner-Peyser/TAA staff 

operated out of One-Stop Career Centers, providing direct customer services – staffing resource 
44

rooms, conducting a wide variety of workshops (e.g., orientations, job readiness workshops, RES 

sessions, job clubs, etc.), and providing staff-assisted (case managed) services. 

Several state and local workforce agencies indicated that they had experienced some 

difficulties or delays in bringing on new staff (even temporary staff hired with federal funding) 

due to state or local hiring freezes; this occurred in spite of requests from ETA to exempt from 

hiring freezes positions funded with federal Recovery Act fund. 

Also, in some states, at the same time new hiring was occurring using Recovery Act

funding, regular staff may have been experiencing furloughs or layoffs. State and local 

workforce officials were in agreement that given the very sizeable increase in the volume of 

One-Stop customers, the availability and use of Recovery Act funding to add additional staff to 

meet escalating demand for services at all levels (i.e., unassisted, staff-assisted, intensive, and 

training services) was critical. In some local areas, workforce agencies indicated that they 

needed even more staff than Recovery Act funding would permit to meet the surging number of 

customers. Additionally, some state and local workforce agencies indicated that mandates to 

spend WIA Recovery Act funding primarily on training cut down on their flexibility to add 

additional staff to work in the resource room and provide assessment and other intensive services 

required before individuals could enter training. Exhibit II-2 provides estimates (at the time 

when site visits occurred) of the number of staff added by the states with Recovery Act funding. 

Additionally, Exhibit II-3 provides additional detail to illustrate the approaches that states and 

local areas took toward staffing with added Recovery Act resources.
Exhibit II-2: Estimates of State-Level Hiring of New Staff with Recovery Act Funds

45

STATE ESTIMATES OF STATE FULL-TIME EQUIVALENT STAFF ADDED DUE TO THE 

RECOVERY ACT (INCLUDING WIA-ADULT, WIA-DW, WIA-YOUTH, WP)

Arizona Added 20 ES staff , 25 RES staff, and 7 TAA staff

Colorado 1 FTE (full-time Green Jobs Coordinator)

Florida 9 FTE (full time/temporary)

Illinois 53 FTE – RES/ES (full-time/intermittent/temporary)

Louisiana 11 FTE (for Youth, RES, WIA) + 60 FTE RES for Career Centers 

All temporary (note: state has hiring freeze includes federal funded positions)

Michigan 2 FTE (full-time Green Jobs Specialist and Summer Youth Coordinator)

Montana 23 FTE – WP/ES

Nevada Added staff 7.5 temporary and 9 permanent RES staff

New York 194 FTE – (New staff for RES and Rapid Response activities)

North Dakota Added 5 RES, 8.73 ES, and 4.63 WIA staff

Ohio 100 FTE – WP/ES (temporary)

Pennsylvania

110 FTE (permanent hires in state’s planning, monitoring, fiscal, rapid response, grants, and 

performance management units)

50 FTE (permanent hires for RES using UI Recovery Act funds)

Texas Added 325 ES staff 

Virginia 18 FTE (state-level ES/UI temp, some rehires may be made permanent) 

75-80 FTE (local ES/UI)

Washington Added staff (No estimate)

Wisconsin 50 FTE (WP/RES; temporary) and 21 FTE (TAA) 

Note: Exhibit is based on site visits conducted to states between December 2009 and June 2010. In Colorado and 

Michigan, the hiring of ES staff was at the local level. The figures provided in the exhibit are estimates provided 

during interviews and might not be precise.
Exhibit II-3: Examples of State Approaches to Hiring New Staff with Recovery Act Funds

46

STATE STATE APPROACHES TO STAFFING USING RECOVERT ACT FUNDING

Arizona Prior to the Recovery Act, Arizona was not struggling for workforce funds. State-level budget issues, however, 

restricted hiring, and DES was not able to fill many permanent positions, particularly in the ES. The Department 

was able to get UI positions exempted in order to handle the increased claims, but has had to request critical 

needs waivers from the state Department of Administration to spend Recovery Act funds on other staffing. The 

waiver process adds about one month to the hiring process. DES has been able to fill 20 se asonal ES positions 

that had been vacant. The department also added 25 temporary RES staff for the reemployment centers; these 

workers will be funded by formula ES funds when the Recovery Act expires. In addition, the department added 

seven Trade Counselors to the staff of five in order to handle the expected 35 percent increase in TAA activities. 

In all, DES added approximately 25 percent to its staff size. The WIA program still has vacancies to fill, but has 

not yet received a hiring freeze waiver.

Colorado The state workforce agency did not add staff for Recovery Act planning and implementation; rather, the state 

used existing state staff (which had to work very hard and, in some cases, work overtime). The one exception 

was that the state hired a Green Jobs coordinator with Recovery Act funds to oversee the many green job 

initiatives ongoing and starting up in the state. Staff was overloaded at the state office for a while through 

planning and early implementation of the Recovery Act. Existing staff charged part of their time to Recovery Act

administrative funding, allowing more non-Recovery Act funding to be released to workforce centers. The state 

had several other new grants to absorb some additional staff costs. Most staff with additional work demands was

exempt from required overtime pay. Limited overtime was granted to non-exempt staff. The state (and some 

local areas) were involved in implementing the Recovery Act at the same time that the state was being very 

cautious about new hires and had furloughs. Recovery Act funding was dispersed to local workforce areas, in the 

form of ―staffing grants.‖ Local areas were encouraged to hire additional temporary staff to meet increased 

demand for services in the One-Stop Centers.

Illinois At the state level, the Department of Commerce and Economic Opportunity added one new staff member to 

coordinate state level planning for and disbursement of WIA discretionary funds. LWIBs made staffing decisions 

on their own, though they were encouraged not to staff up with permanent hires given the one-time nature of the 

funds. In the Illinois Department of Employment Security, 52 additional staff was added to help administer and 

carry out Reemployment Services. These staff members were hired in an ―intermittent‖ category – a job 

classification that limits hours to 1,500 under an initial contract, with the possibility to move into a permanent 

position. Intermittents can also be re-hired in a subsequent year for another 1,500 hours. RES hires were crosstrained to be able to provide ES services. No new ES, UI or TAA staff was hired.

Louisiana The state was able to use some of the Recovery Act funds to hire additional staff that had been lost due to the 

WIA rescissions. They used the Recovery Act funds to hire 11 staff (for youth services, RES, and WIA 

programs). In addition, the state hired 60 new temporary staff with Recovery Act funds to handle RES in the 

career centers. The governor instituted a freeze in hiring except for those on federal funding. They may have to 

lay off or furlough some personnel. The Office of Workforce Development alone might lay off 40 or 50 staff of 

their 250 statewide total. Because of the constant reduction in WIA and WP funds, Recovery Act funding 

permitted them to postpone what the state would have had to do to respond to shrinking funding.

Ohio Most WIA Recovery Act funds were distributed by formula to local workforce areas. Local areas were 

encouraged to use funding to support training rather than building infrastructure or hiring new staff. Many local 

areas faced hiring freezes of new staff that limited their ability to bring on new staff. Recovery Act WagnerPeyser funding was used to hire 100 intermittent (temporary) ES/Wagner-Peyser staff, which was deployed 

throughout the state at One-Stops to handle increased volume of customers and to conduct Reemployment 

Services orientations. Some additional temporary staff was hired by local areas to administer and staff the 

Summer Youth program.

Wisconsin About 50 new full-time workers have been added to the Wagner-Peyser ranks to provide RES. A total of 21 new 

state ES workers are being hired to provide TAA case management services. The overall approach to meeting 

staffing needs with regard to Recovery Act funding was to hire temporary full-time staff and authorize overtime 

(especially for UI). There was little contracting out and no outsourcing. The main challenge with regard to 

staffing has been to get new staff trained and productive on the job. Aft er Recovery Act funding is exhausted, the 

state expects few layoffs within DWD. Finally, the state has imposed furloughs for all state staff – 8 days/year, 

which amounts to about a 3 percent pay cut.

Note: Exhibit is based on site visits conducted to states between December 2009 and June 2010.
47

C. Technical Assistance and Training in Response to the Recovery Act

With states and local workforce agencies under tight time constraints and intense pressure 

to plan and begin spending Recovery Act funding, they sought help in understanding Recovery 

Act requirements and in planning Recovery Act-funded activities from a variety of sources. In 

particular, states looked to ETA – both the national and regional offices – for guidance and 

technical assistance. In planning for Recovery Act implementation, states carefully reviewed 

ETA’s Training and Employment Guidance Letters (TEGLs), Training and Employment 

Information Notices (TEINs), and Training and Employment Notices (TENs) as they were 

released. States also participated in a series of ETA-sponsored webinars that provided technical

assistance on the Recovery Act guidelines (e.g., tied to the issuance of a TEGL). For example, 

of particular interest early on was the guidance and technical assistance provided on 

implementation of the Recovery Act-funded Summer Youth Employment Program. Some states 

reported that it was difficult to get clear guidance on countable activities as well as how to assign 

customers and activities to Recovery Act or formula funding. 

Several state agency officials observed that ETA guidance related to reporting came out 

late in some instances, but these state agency staff understood that USDOL had very little time to 

produce this guidance given the short time frame between when the Recovery Act was enacted 

and when states and localities were to begin spending Recovery Act funding. State agencies also 

indicated that the guidance provided in TEGLs, TEINs, ―Questions and Answers,‖ and webinars 

was helpful. In addition, the ETA regional office staff was available (both in-person and by 

telephone to answer questions and provide additional guidance), and state workforce agencies to 

varying degrees relied upon these offices for help. State workforce agencies indicated that they 

had received useful guidance from national workforce associations (including the National 
48

Governors Association and the National Association of State Workforce Agencies), as well as, in 

some instances, talking with other state workforce agencies. Overall, most states—particularly 

in light of the very tight time constraints that ETA (as well as the states) faced—believed the 

training and technical assistance provided was useful for implementing the Recovery Act 

requirements, but some states mentioned technical assistance as one of the overall challenges in 

implementing the Recovery Act. Some states indicated that they would have appreciated more 

timely guidance on fiscal reporting requirements. 

Once state workforce agencies had received ETA guidance and attended training 

workshops, they provided guidance to local workforce areas. State workforce agencies passed 

along ETA guidance (e.g., TEGLs and TEINs) and made certain that local workforce agencies 

were aware of their existence and content. States also generally conducted webinars of their own 

for local workforce agencies, and they issued state policy guidance letters to local workforce 

areas on fiscal reporting, the summer youth employment program, and other related Recovery 

Act issues of importance. States also conducted technical assistance sessions with the One-Stop 

directors and operations managers, financial managers, and management information system 

(MIS) coordinators, as well as youth program coordinators. Finally, like ETA, state workforce 

agency officials were available at any time for technical assistance.

D. Plans for Spending Recovery Act Funds and Early Expenditures

During site visits, states both discussed their plans for spending Recovery Act funds and 

provided assessments of early expenditure patterns and, in a few instances, of actual 

expenditures. As noted previously, the site visits were spread over a fairly long period—

December 2009 through July 2010—which was relatively early in the Recovery Act period. 
49

About one-half of the states interviewed, seven of 16 states, experienced some delays in 

spending Recovery Act funds. Delays resulted from a range of factors including hiring freezes in 

place at the state level (e.g., Arizona) or local level (e.g., Colorado), delays by the legislature in 

approving spending of Recovery Act funds (e.g., Illinois and Montana), slow civil service hiring 

processes (e.g., Colorado, Illinois, and North Dakota), and ETA not renewing waivers that 

permitted states to transfer funds from the WIA Dislocated Worker program to the WIA Adult 

program (e.g., Colorado and Florida).8 During the site visits, state and local areas were generally 

optimistic about their ability to spend the Recovery Act funds rapidly once they overcame the 

barriers mentioned above. In tracking spending of the Recovery Act funds, the Department of 

Labor finds 90 percent of the 20 states in the research sample are projected to achieve federal 

outlays of 70 percent or more of their WIA Adult Recovery Act funds by September 30, 2010, 

and 70 percent of the states are projected to have outlays of 70 percent or more of their 

Dislocated Worker funds by September 30, 2010.

 

8

ETA staff indicated that waivers to transfer WIA funds from the dislocated worker program to the adult 

program were subject to greater scrutiny because of Congressional intent for the funds, the severe economic climate, 

and the large increase in dislocated workers.
50

CHAPTER III

WIA ADULT AND DISLOCATED WORKER PROGRAMS

The Adult and Dislocated Worker Programs under Title I of the Workforce Investment 

Act of 1998 are designed to provide quality employment and training services to assist eligible 

individuals find and qualify for meaningful employment, and to help employers find the skilled 

workers they need to compete and succeed in business.9 The goals of the WIA program are: 

 To increase employment, as measured by entry into unsubsidized employment;

 To increase retention in unsubsidized employment;

 To increase earnings received in unsubsidized employment for dislocated workers; and

 To enhance customer satisfaction for participants and for employers.

Services under the WIA Adult and Dislocated Worker programs are usually provided through 

One-Stop Career Centers. There are three levels of service: (1) core services – which include

outreach, job search and placement assistance, and labor market information available to all job 

seekers; (2) intensive services – which include more comprehensive assessments, development 

of individual employment plans, and counseling and career planning; and (3) training services –

where customers learn skills for job opportunities in their communities, through both 

occupational training and basic skills training. In most cases, customers are provided a voucherlike instrument called an ―individual training account‖ (ITA) to select an appropriate training 

program from a qualified training provider. Supportive services, such as transportation, 

childcare, housing, and needs-related payments, are provided under certain circumstances to 

 

9

This description is based on background on the WIA program provided on the Department of 

Labor/Employment and Training website, at http://www.doleta.gov/programs/general_info.cfm accessed on January 

20, 2011. This website includes additional background information and details about WIA.
51

allow an individual to participate in the program. ―Rapid Response‖ services at the employment 

site for employers and workers who are expected to lose their jobs as a result of company 

closings and mass layoffs are also available. 

States are responsible for program management and oversight, and operations are 

delivered through local workforce investment areas (LWIAs). Under the WIA Adult program, 

all adults 18 years and older are eligible for core services. Priority for intensive and training 

services must be given to recipients of public assistance and other low-income individuals when

funds are limited. In addition to unemployed adults, employed adults can also receive services to 

obtain or retain employment that allows for self-sufficiency. States and LWIAs are responsible 

for establishing procedures for applying the priority and self-sufficiency requirements. 

Under the WIA Dislocated Worker program, a ―dislocated worker‖ is an individual who: 

 Has been terminated or laid off, or has received a notice of termination or layoff from 

employment;

 Is eligible for or has exhausted UI;

 Has demonstrated an appropriate attachment to the workforce, but is not eligible for UI

and is unlikely to return to a previous industry or occupation;

 Has been terminated or laid off or received notification of termination or layoff from 

employment as a result of a permanent closure or substantial layoff;

 Is employed at a facility where the employer has made the general announcement that the 

facility will close within 180 days;

 Was self-employed (including employment as a farmer, a rancher, or a fisherman) but is 

unemployed as a result of general economic conditions in the community or because of a 

natural disaster; or

 Is a displaced homemaker who is no longer supported by another family member.

The Recovery Act provided additional funding to support employment and training 

activities provided by states and LWIAs under WIA. The Act included funding aimed at helping 

states and local areas respond to increased numbers of unemployed and underemployed
52

customers entering the One-Stop system, as well as some specific provisions (discussed in 

greater detail later in this chapter) that were intended to enhance services provided under WIA. 

The sections below synthesize findings from site visits conducted to 16 states with respect to 

how key Recovery Act provisions have been implemented and affected WIA Adult and 

Dislocated Worker program services and operations. The following issues related to Recovery 

Act provisions are covered in this section: (1) assessment and counseling, (2) changes in training 

requirements and policy, (3) links to apprenticeship, (4) Pell Grant usage and issues, (5) 

relationships with institutions of higher education, (6) targeting on low-income individuals, (7) 

supportive services and needs-related payments, and (8) expectations when Recovery Act

funding is exhausted. The findings reported in this chapter are based on site visits conducted 

between December 2009 and June 2010, and so reflect early implementation experiences of 

states and local workforce areas. 

A. Assessment and Counseling

Under the Recovery Act, the workforce system is to place more emphasis on long-term 

training, reemployment, and linking workers to regional opportunities in high growth sectors. To 

this end, TEGL 14-08 advised states to consider how assessment and data-driven career 

counseling can be integrated into their service strategies to support WIA participants in 

successful training and job search activities aligned with areas of anticipated economic and job 

growth. The NASWA survey of all state workforce administrators on early implementation of 

the workforce provisions of the Recovery Act found that the Recovery Act has had some early 

effects on assessment and career counseling services provided by states and local workforce 

programs:
53

 Survey results suggest that the percentage of WIA and Wagner-Peyser Act customers 

receiving assessment and career counseling services has increased in the majority of 

states – about three quarters of states reported increases for the WIA Adult and WIA 

Dislocated Worker programs.

 The majority of states indicated they had made moderate or substantial enhancements to 

assessment and career counseling services provided to WIA and Wagner-Peyser Act 

customers – for example, nearly three-quarters of the responding states indicated they 

have enhanced their triage processes and tools; their skills assessment processes and 

tools; staff training in areas of triage, customer assessment, and skills transferability 

analysis; and the availability and use of labor market information.

As discussed below, a slightly different and perhaps more nuanced picture emerges from 

the site visits conducted under this study. Similar to the survey, a majority of states visited 

indicated that they had seen an increase in the number of individuals receiving assessment and 

career counseling. This increase, though, was only partially attributable to Recovery Act 

funding. Much of the increase in customers receiving assessment and counseling services was a 

function of the large increase in the numbers of unemployed and underemployed workers 

coming into the One-Stop system in search of job leads and training to enhance skill levels. 

Thus, the Recovery Act funds enabled the sites to respond to the increased demand for services. 

In addition, the Recovery Act provided additional funding that states were encouraged to 

use to expand the number of individuals receiving both short- and long-term training (see Section 

B for details). In order to receive training, all states required WIA Adult and Dislocated Worker

customers to first be assessed and to go through intensive services; hence, with the elevated 

numbers of customers coming into the One-Stops and greater numbers of WIA Adult and 

Dislocated Worker customers entering training, it is not surprising that a majority of states 

indicated (in the survey and during our site visits) that they had experienced an increase in the 

number of WIA participants receiving assessment and career counseling. 
54

However, when asked whether they had experienced a change in the percentage of WIA 

Adult and Dislocated Worker customers who receive assessment and career counseling services, 

states generally indicated (during our visits) that there had been no change. In fact, several states 

indicated that because the system had been so deluged by unemployed and underemployed 

customers as a result of the recession, that they believed that the percentage receiving counseling 

and assessment may have declined slightly (though not due to the Recovery Act or a desire on 

the part of the workforce agency to decrease assessment and counseling activity).

During site visits, state workforce agency officials were asked, ―Since enactment of the 

Recovery Act, has your state issued new policies or requirements on assessment and career 

counseling under the WIA Program?‖ Nearly all states indicated that they had not issued new 

policies or requirements on assessment or career counseling under WIA since receipt of 

Recovery Act funding. The states that issued new policies said that it was not a result of the 

Recovery Act, but rather was the product of recent or ongoing efforts to enhance assessment and 

career counseling. Several states indicated that in the year or two prior to the Recovery Act, they 

had initiated statewide efforts aimed at improving assessment services, usually around improving 

the testing methods used by local workforce agencies. 

Exhibit III-1 provides examples of several states that had initiated changes in assessment 

and counseling procedures, though in each state these changes had been started before receipt of 

Recovery Act funds. State workforce agencies indicated that while the state typically set the 

tone with regard to assessment policies/procedures and provided guidance around possible 

assessment tests and procedures that could be used within the state, local workforce areas had 

considerable discretion around the specific tests used. A key observation of several state 

workforce agency officials was that the Recovery Act provided additional resources that helped 
55

to continue and even expand or accelerate the use of new assessment procedures within their 

states. For example, several states—including Colorado, Louisiana, Michigan, Ohio, 

Pennsylvania, Washington, and Wisconsin—were at the time of receipt of Recovery Act funding 

already in the process of implementing or expanding use of WorkKeys/KeyTrain and National 

Career Readiness Certification (NCRC) to enhance assessment procedures. These efforts were 

aimed at providing workers an extra credential that would be recognized by employers. Several 

states indicated that they were disseminating information to employers to increase knowledge of 

NCRC and attempting to make such certification an increasingly important criterion upon which 

employers select workers to fill job openings.
Exhibit III-1: Examples of Assessment Policies and Procedures in States Visited

56

STATE EXAMPLES OF ASSESSMENT POLICIES AND PROCEDURES IN STATES VISITED

Colorado The state has issued no new policies or requirements on assessment and career counseling under WIA in response 

to the Recovery Act. Under WIA, the state (and LWIAs) have always placed strong emphasis on assessment, and 

WIA participants had to be carefully assessed to qualify for WIA training. Because of the emphasis in Colorado 

on local control/autonomy, there is quite a bit of flexibility with regard to how and when assessment is used by 

local workforce areas. Prior to the Recovery Act, the state had launched a statewide initiative to emphasize use of 

the Career Readiness Colorado Certification (CRCC), which is based on the National Career Readiness 

Certificate (NCRC). The Recovery Act funding has helped to continue the state’s and local workforce regions’ 

emphasis on use and expansion of CRCC. Because more individuals are entering training using Recovery Act

funds,in sheer numbers there have been more WIA participants assessed since Recovery Act funding arrived (a 

step that precedes entry into training). Overall, the Recovery Act has not brought about changes in assessment 

policies, procedures, or the overall percentage of individuals receiving assessment.

New York In October 2009, the state issued revised policies relating to assessment and counseling. Current policy is that all 

One-Stop customers are to receive an initial assessment. The only exceptions are customers using self-help or 

informational services only and UI claimants who are ―work search exempt‖ (e.g., part of a union with union 

hiring arrangements or those temporarily laid off or on seasonal layoff). The new policies were not issued as a 

result of the Recovery Act -- the state’s position is that assessments should be conducted for all customers as a 

first step to determining which services should be offered.

Ohio The state has issued no new policies or requirements on assessment and career counseling under the WIA 

program in response to the Recovery Act. Local workforce areas determine the specific assessment tests used and 

policies/procedures. Under WIA, prior to the Recovery Act, the state (and local workforce areas) placed 

emphasis on assessment, and WIA participants had to be carefully assessed to qualify for WIA training. Among 

the assessment tools used are the TABE and WorkKeys (which was the case prior to Recovery Act funding). State 

officials were unsure whether any local workforce areas had used Recovery Act funding to initiate new 

assessment procedures or tests. Overall, while assessment policies and procedures have not changed in response 

to the Recovery Act, because there has been an increase in the numbers of individuals receiving WIA training, the 

number receiving assessment has increased significantly within the state (though the percentage assessed has 

decreased slightly).

Pennsylvania Prior to the Recovery Act, the state began working with the LWIAs to improve assessment activities. Two 

LWIAs began enhancing their assessment tools and were experimenting with WorkKeys, KeyTrain, and WIN. 

Another LWIA expanded efforts to assess the workforce needs of the economically disadvantaged. From the 

success of these local efforts, the state and the LWIAs recently agreed to jointly purcha se WorkKeys to implement 

its use in assessment statewide. All staff, including WIA, RES, WP, and TAA, is being trained by one of the 

local WIBs to conduct the WorkKeys assessment and read and interpret results. Prior to the Recovery Act, the 

state also changed policy to ensure that eligible PA CareerLinks customers saw a career specialist and had a oneon-one assessment and counseling session. Customers previously participated in group counseling sessions or 

workshops. The nature of the customers coming into the PA CareerLinks has posed some challenges for 

assessment and counseling. First, getting customers, especially UI claimants, in the door can be challenging. 

Many wait to exhaust their benefits before seeking assistance. Second, many customers are resistant to 

participating in training activities. They often just want a job and do not like school. Many customers have basic 

education needs and have to take prerequisite classes before being able to enroll in a training program. However, 

WIA does not cover the prerequisites to enter into a training program. 

Washington In Washington, the majority of core services are delivered by ES staff using mostly WIA funding ; however, local 

areas make decisions on resources, money, design, etc. The Framework Initiative is intended to eliminate some 

of the confusion that is created by having so many variations. New policies exist around basic front-end triage to 

determine immediate needs using an initial assessment. The initiative has included training staff on assessment 

tools and developing local service targets. Very little of the policy development was directly related to the 

Recovery Act; however, as the changes were already underway when the funding became available. Recovery 

Act funds simply pushed the changes farther along than they would otherwise have been at this point given the 

lack of other resources. Recovery Act funds were used to make the KeyTrain assessment available for statewide 

use in the One-Stop centers. The only mandated assessment tool is CASAS (Comprehensive Adult Student 

Assessment Systems) for ABE and youth. CASAS was selected as it is the tool used for ABE students in the 

community college system. The biggest impact on the system has been the increased numbers of customers due 

to the recession. The number being served and the number referred to training are up substantially . 

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010
57

B. Changes in Training Requirements and Policy

Under the Recovery Act, states are expected to use the additional workforce funding to 

substantially increase the number of customers served and to substantially increase the number 

and proportion of customers who receive training. Training services provided with Recovery 

Act funds include occupational skills classroom training, on-the-job training (OJT), programs 

that combine workplace training and related instruction including registered apprenticeship, 

training programs operated by the private sector, skills upgrade and retraining, entrepreneurship 

training, job readiness training, adult education and literacy training, and customized training. 

These funds can also be used to support adult basic education (ABE) training, including English 

as a Second Language (ESL) training. The NASWA state survey probed states on several issues 

related to how Recovery Act funding may have affected training policies and practices. Findings 

from the NASWA survey with respect to training include the following: 

 Every state reported encouraging or requiring local areas to increase investments in 

WIA funded training – with two-thirds of states reporting significant staff efforts to 

encourage training.

 About one-half the states reported having set aside or requiring LWIAs to set aside a 

certain percent of WIA Recovery Act funds for training.

 Nearly three-quarters of states reported substantial increases (greater than 10 percent) 

in the number of customers enrolled in training through the WIA Adult and WIA 

Dislocated Worker programs.

The site visits to states confirmed these key findings and provided some additional depth and 

examples of how Recovery Act funding affected training policies, number trained, and types of 

training provided under the WIA Adult and Dislocated Worker Programs.
58

All state workforce agencies visited as part of this study indicated that they had 

encouraged (in their guidance, technical assistance, and discussions) LWIAs to use WIA 

Recovery Act funding specifically to support and expand training for unemployed and 

underemployed workers served under both the WIA Adult and Dislocated Worker programs. In 

their discussions with local workforce agency staff, state workforce agency officials typically 

underscored the fact that WIA Recovery Act funding was a one-time event (i.e., temporary in 

nature), should be spent quickly and prudently, should not be used to build infrastructure or 

permanent staff, and should be devoted to training. For most states, the Recovery Act funding 

represented additional funding to support training and other WIA activities. In a few states, 

however, a portion of the WIA Recovery Act funding replaced funding that had been lost due to 

a recent decrease in the state’s WIA Dislocated Worker formula allocation. Wisconsin, for 

example, indicated that the Recovery Act WIA Dislocated Worker funds primarily brought the 

state back to its prior level of funding.

In most states, local workforce agencies were encouraged to obligate and spend Recovery 

Act funds to the extent possible within the first program year (of the two years for which 

Recovery Act funding was available). Obligating funding to support training activities was 

generally not an issue or challenge for most workforce areas, as many One-Stops were 

overwhelmed with customers who were both interested in and met requirements for training 

assistance. A few state agencies indicated that expenditures of Recovery Act funding on training 

lagged in some local workforce areas (mostly for the WIA Dislocated Workers program) because 

(1) some unemployed workers were primarily interested in finding work and were reluctant (at 

least until their UI benefits were exhausted) to enter training; (2) there were waiting lists 

(sometimes lengthy ones, especially for training for certain occupations in health careers) that 
59

made it difficult to get some individuals into occupational training that related to their interests; 

and (3) faced with very high customer volume in One-Stop Career Centers, some One-Stops 

lacked staffing and resources to provide the assessment and other intensive services required 

prior to approval of training. 

It should also be noted that several states had waivers in place that allowed for the 

transfer of 100 percent of funds between the WIA Adult and Dislocated Worker programs in 

prior years, which had allowed for substantial flexibility in terms of how funding was actually 

spent on training between these two programs; several states indicated that ETA limited their 

ability to transfer funds from the Dislocated Worker program to the Adult program for the 

Recovery Act WIA funds.10

As shown in Exhibit III-2, states adopted varying policies – some more explicit – to 

encourage local workforce agencies to allocate resources to training versus other allowable 

activities under WIA. States implemented four basic approaches to encouraging use of Recovery 

Act funding for training activities: (1) set no specific threshold or percentage that local 

workforce areas had to spend on training, but encourage (through guidance, technical assistance, 

and ongoing discussions) LWIAs to use Recovery Act funding for training (e.g., states such as 

Michigan and Washington used this approach); (2) require local workforce agencies to spend at 

least as much on a percentage basis on training with Recovery Act funding as they have spent in 

the past with their regular WIA

 

10 USDOL staff indicated that the waiver policy was changed in PY 2009 to ensure that the needs of both 

low-income workers and dislocated workers were being met while still giving states and locals some flexibility to

tailor their programs to their local needs. USDOL allowed all states to transfer up to 30 percent of their Recovery 

Act and WIA formula funds between the Adult and Dislocated Worker programs, and allowed states with a waiver 

to transfer up to 50 percent of WIA formula funds. 
Exhibit III-2: Examples of Varying Approaches by States to 

Encouraging Use of Recovery Act Funds on Training

60

STATE STATE POLICY GUIDANCE ON USE OF RECOVERY ACT FUNDS FOR TRAINING

Arizona Local areas in Arizona have considerable autonomy in setting training standards and determining training 

expenditure levels. Prior to the Recovery Act, training was not a high priority in most local areas. Under the 

Recovery Act, Arizona has encouraged local areas to do more training but did not establish a statewide standard 

or target for training expenditures. Some local areas identified an increased training emphasis in their local plan 

modification, but not all. One change as a result of the Recovery Act is that individuals can access training mo re 

quickly, after only a brief connection with core and intensive services. Each local area also sets its own ITA 

spending cap for individuals. In larger areas, such as the City of Phoenix, the training cap is set at $4,000 per 

person and also requires a participant in-kind match, which might include a Pell Grant, federal student loan, or 

personal savings.

Colorado The state requested that local workforce regions spend a higher percentage of Recovery Act WIA funds on 

training activities than had been spent in the past for WIA formula funds, but the state did not specify a specific 

percentage. The WIA Recovery Act funding for WIA Adult and Dislocated Workers represented about the same 

level of funding as had been received by local workforce areas under the formula program.

Illinois The state implemented its own policy in 2007 that required local areas to spend at least 40 percent of their Adult 

and Dislocated Worker allocations on training. This policy provided incentive funds to those local areas meeting 

this requirement and imposed sanctions on those that did not meet them. Initially there was a period of 

negotiations for lower limits for some of the local areas, but as of PY 2009, all LWIAs are required to meet the 

40% minimum. This policy was continued and reinforced with Recovery Act funding. Illinois reports it has seen 

a dramatic increase between 2007 and 2009 in the overall percentage of WIA funds spent on training, as well as 

the number of LWIAs that have been able to meet the minimum levels.

Michigan There is no state policy requiring a certain percentage of Recovery Act funds be used for training – it is left to 

local areas to determine what portion of Recovery Act funds are used for training. The state let it be known that a 

high proportion (if not all) Recovery Act funds should be used for training (in the form of ITAs) and that local 

areas should not use Recovery Act funding to build staff or infrastructure. Local areas were also told to spend 

money quickly and prudently. The state has also placed a strong emphasis on providing long-term training and 

assisting workers to obtain certificates and associate’s, bachelor’s, and post-graduate degrees. Additionally, the 

state’s No Worker Left Behind initiative, which is funded in part by the WIA program and ARRA, provides for 

up to 2 years of training for anyone in the state with family income below $40,000 at a community college or 4-

year institution, with a cap of $10,000. The state has also used ARRA funding to establish the ―No Worker Left 

Behind (NWLB) - Greens Jobs Initiative.‖ The goal of this ARRA-funded initiative is to focus on high 

demand/high growth occupations with an emphasis on green jobs. As a result of the ARRA, the NWLB Green 

Jobs Initiative is enabling One-Stop customers to gain increased access to training opportunities in a range of 

renewable energy and energy efficiency programs focused on: alternative energy production and effic iency, 

green building construction and retrofitting, and organic agriculture and natural resource conservation.

Pennsylvania The state has strongly recommended that LWIAs spend at least 60 percent of their Recovery Act funds on 

training. Workforce Guidance Memo #3 states that spending 30 to 40 percent on training is unacceptable. The 

memo also notes that the ultimate goal for training must be a recognized skills certification, academic credential, 

and/or employment and that the state agency recommends that all Recovery Act funding be used to prepare and 

move customers into demand-driven training, post-secondary education, and/or employment. It also urges 

LWIAs to keep administrative costs to a minimum.

Texas Texas has mandated that 67 percent of Recovery Act funds be spent on training, including expenditures on 

support services and needs-related payments. Due to the emphasis in the Recovery Act legislation that the 

―majority‖ of the funds be spent on training, and because USDOL did not establish a specific standard, TWC 

determined that 67 percent would provide an aggressive focus on training while still allowing the Boards to meet 

other needs with Recovery Act funds. Unlike formula funding, Recovery Act funding specifically defined the 

activities that count as a training expenditure.

Wisconsin The state policy requires that 70 percent of Recovery Act WIA Dislocated Worker and Adult funds be spent on 

training. This is double the expenditure requirement for training for regular WIA formula funds (set at 35 

percent). State officials noted that Recovery Act funding was mostly a substitute for the 40 percent reduction in 

WIA Dislocated Worker funding that hit the state this year. State officials expect that it will be difficult to 

maintain the 70 percent expenditure requirement once Recovery Act funding is exhausted. Most likely, the state 

will maintain the 35 percent requirement for regular WIA formula funds – though a lot will depend on when and 

if WIA is reauthorized (and requirements set forth in WIA reauthorization should it be enacted).

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010.
61

formula funds (e.g., Colorado); (3) apply the same threshold requirement being mandated for 

regular WIA formula funds (e.g., that 50 percent of WIA formula funds be spent on training) for 

the Recovery Act funds (e.g., Illinois and Florida); or (4) mandate that local workforce areas 

expend at least a minimum percentage of Recovery Act funds received (ranging as high as 70 

percent in states visited) on training or on training and supportive services (e.g., Montana, Texas, 

and Wisconsin). 

For example, Texas mandated that 67 percent of Recovery Act funds be spent on training, 

including expenditures on support services and needs-related payments. Due to the emphasis in 

the Recovery Act legislation that the majority of the funds be spent on training, and because 

USDOL did not establish a specific standard, the Texas Workforce Commission (TWC)

determined that 67 percent would provide an aggressive focus on training while still allowing the 

local boards to meet other needs with Recovery Act funds. TWC has examined data on 

expenditures and customers served monthly to ensure that local boards are meeting training and 

expenditure benchmarks.

During site visits, states were asked whether they anticipated a ―change by the end of 

2009 in the number and/or percent of WIA Adults and Dislocated Workers receiving training as 

a direct result of the Recovery Act funding and policy.‖ At the time of the visits, states had 

completed only a portion of the first year of Recovery Act experience (and in some of the early 

visits, fewer than six months). As a result, states could not provide a definitive response to this 

question – some provided qualitative assessments of the estimated numbers of customers 

receiving training services, and others were able to provide some early data comparing the first 

few quarters of the current program year (ending in June 2010) with the first few quarters of the 

previous program year. In their more qualitative assessments of the number of individuals 
62

receiving training services, similar to the results of the NASWA survey, states indicated that they 

had increased the numbers of individuals in the WIA Adult and Dislocated Worker programs 

entering training. In the states where it was possible to obtain some very preliminary estimates 

of the number of WIA participants entering training, the numbers entering training were 

considerably above what had been reported the previous year or when added to the numbers 

trained under formula funds represented a substantial increase. For example, Ohio was able to 

provide some preliminary counts of WIA participants entering training; the numbers revealed 

about a one-third increase in the number receiving training over what the state was able to train 

under its WIA formula funds. State officials observed that because of a lack of job openings, job 

seekers were more open to training – some customers were in a sense buying time until the job 

market became more favorable. Over a one-year period (between March 2009 and February 

2010), across the 20 local workforce areas in Ohio, stimulus funding paid for training for 5,849 

WIA Adult and Dislocated Worker participants (which compares to 16,289 WIA Adult and 

Dislocated Worker participants receiving training funded by formula funds). Ohio workforce 

officials noted that though there was about a one-third increase in the number of participants 

receiving training services (so far) versus the numbers trained using regular formula funds, the 

percentage of WIA participants receiving training did not change much (about one-half of all 

WIA Adults and Dislocated Workers received training – 51.6 percent during this period). 

Overall, it is too early (based on the site visit results) to determine the extent to which 

Recovery Act funding has affected the proportion of WIA participants going into training, but 

early and anecdotal evidence suggests that states have increased (and in some instances, 

substantially increased) the number of WIA participants entering training. The next round of site 

visits, which will enable analyses of participant data for an entire program year, will provide 
63

more definitive results on both the number of WIA participants trained and the types of training 

provided.

During site visits, states were also asked to identify the types of training provided with 

Recovery Act funding and whether the Recovery Act has made a difference in moving state and 

local workforce areas to offer new and improved types of training. The NASWA survey results 

suggest that Recovery Act funding has been used to provide a variety of types of training, with a 

particular emphasis on using individual training accounts (ITAs) to provide classroom training. 

For example, survey results indicated states used Recovery Act funds to provide the following 

types of training under the WIA Adult program (with similar percentages reported for the WIA 

Dislocated Worker program): individual training accounts (95 percent of states); contracts with 

community or technical colleges (69 percent); on-the-job training (67 percent); registered 

apprenticeships (49 percent); contracts with community-based organizations (31 percent); 

customized training (31 percent); and contracts with four-year institutions (15 percent). 

Generally, the site visits confirmed the general findings of the NASWA study with respect to the 

types of training being provided and suggested that some states were using Recovery Act funds 

to emphasize (and expand) use of certain types of training, including OJT and customized 

training. Exhibit III-3 provides several illustrations of the ways in which states have utilized 

Recovery Act funds for training. States indicated that Recovery Act funding was being used in 

most instances to support the same types of training – particularly ITAs for classroom training –

at similar training institutions (off the state’s eligible list of providers) as were being used under 

the regular (formula) WIA Adult and Dislocated Worker programs. It should also be noted that 

some states have used Recovery Act funds to expand training opportunities – particularly with 
64

respect to providing increased OJT and customized training (for example, see Wisconsin in 

Exhibit III-3).
Exhibit III-3: Examples of State Approaches to Using Recovery Act Funding to Support 

Training Activities

65

STATE VARIOUS STATE APPROACHES TO USE OF RECOVERY ACT FUNDS TO SUPPORT TRAINING

Arizona Arizona is continuing to use the same Eligible Training Provider List (ETPL) for both Recovery Act and formula 

funding. State workforce staff held a training conference to help establish new relationships between the local 

area staff and training providers on the ETPL. The intent was to improve connections between the workforce 

system and local training providers, with the ultimate goal of fostering more training approvals in some local 

areas. There have also been sessions for One-Stop directors to encourage more diversity in terms of providers 

and types of training offered. 

Florida The majority of training funds in Florida are used for ITAs, and the number of ITAs has increased substantially 

because of Recovery Act funding. 

Illinois Illinois used Recovery Act funds to support all of its training services and placed special emphasis on: (1) class 

size training contracts to increase the capacity of training institutions to provide sector-based training for 

customers; (2) bridge training programs to prepare low-education/ low-skill customers for degree/certification 

based training programs by bridging the gap between their current knowledge base and the expectations and 

requirements necessary to enter a degree/certification training program; and (3) strengthening its incumbent 

worker program (keeping people in jobs and advancing their careers). 

Michigan The state has placed a strong emphasis on providing long-term training and assisting workers to obtain certificates

or associate’s, bachelor’s, and post-graduate degrees. The Recovery Act funding mostly has been spent on ITAs 

– and there has been very little difficulty spending all of the Recovery Act resources rapidly (and mostly on 

training) because of the very high level of need for training and re-training throughout the state.

New York Most of the Recovery Act funds spent on training are for Individual Training Accounts (ITAs). Many LWIAs 

were able to increase their ITA amounts due to the extra funding available under the Recovery Act. LWIAs are 

also funding non-ITA training such as on-the-job training and customized training. Although the Recovery Act

permits states and localities to enter into contracts for classrooms of training with higher education providers or 

other providers on the Eligible Training Provider List as long as customer choice is not limited, there was not a 

strong response to this flexibility, in large part due to the recession. State workforce officials noted that there are 

not many industries or sectors seeking enough newly trained workers in an occupation to fill a classroom. 

Funding classes through the community colleges was considered to be a good idea for growth sectors such as 

healthcare, but because Recovery Act money will expire and likely not be replaced, developing a curriculum and 

hiring staff appear to be a roadblock at the community college level. In addition, flexibility in program design 

and timing varies from school to school across the state

Ohio State officials indicated that there have been no changes in the types of training provided due to Recovery Act

funding. There is emphasis on providing ITAs, but other types of training are also provided. The caps on ITAs 

(the same for Recovery Act or regular formula funding) are set by LWIBs (and range from $5,000 to $20,000, 

with an average of $13,000). One concern of the state is that many LWIBs have had to establish waiting lists for 

entry into training even with the additional Recovery Act funding. As of February 22, 2010, 35 of Ohio’s 88 

counties had waiting lists for adults and dislocated workers of 25 or more customers – the total on waiting lists 

within the state for WIA Adult and Dislocated training was 4,493 customers (2,703 Adults; 1,790 Dislocated 

Workers). There is some concern that with economic conditions only slowly improving and UI claimants 

exhausting their extensions, there will be increasing demand for training in the coming months.

Texas Texas officials noted an expansion of training in terms of the number of contracts, the types of training, and the 

industries of focus. Recovery Act money has supported training in renewable energy, increased nurse training 

capacity, and facilitated regional collaborations. For example, the Concho Valley Board used Recovery Act

funds to implement a training program at Howard College that was previously unavailable due to a lack of work 

stations. Concho Valley’s contract for classroom training provided the resources needed to purchase the 

necessary equipment. This purchase also improves the college’s capacity to provide similar training in the future.

Wisconsin The Recovery Act funding has been mostly spent on ITAs, though there has also been a recent push by local areas 

to use Recovery Act funding to sponsor classroom-size training programs. This is in part because there has been 

an onslaught of unemployed individuals that have sought out training at the state’s technical colleges and 

community colleges – creating waiting lists for entry into some training programs. In addition, classroom-size 

training has the advantage of being flexible in terms of when training begins and ends (i.e., it does not need to be 

timed to semester start dates/end dates), offers the possibility of shortening training periods and tailoring 

curriculum to needs of employers and workers, and results in rapid expenditure of funds over the short term 

(without future commitments to fund training in the next program year).

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010. 
66

C. Links to Apprenticeship

One training strategy suggested by USDOL in TEGL 14-08 was for states and LWIAs to 

use Recovery Act funding for establishing new linkages and to expand existing linkages between 

WIA and registered apprenticeship programs. The site visits conducted under this study 

indicated that the availability of Recovery Act funding had, as yet, little or no effect in terms of 

fostering new linkages between WIA and registered apprenticeship programs. A number of state 

workforce agencies indicated that while they had tried to establish or expand linkages with 

apprenticeship programs, such efforts in the face of the recession proved to be largely fruitless. 

An important factor underlying the difficulties in increasing ties to apprenticeship stems from the 

steep declines in employment in the construction sector, which accounts for an important share 

of apprenticeship opportunities. The experiences of several of the states in attempting to link 

with apprenticeship programs suggests that while efforts at such linkages have not been met with 

tangible results, when economic growth returns (especially within the construction sector) 

partnering efforts may be met with improved success:

 Colorado. With regard to apprenticeship, the Recovery Act has not fostered new 

linkages with registered apprenticeship programs to date. However, the state has been 

promoting apprenticeships. The state has built a website (not with Recovery Act

funding) that provides staff, employers, and job seekers with easy access to all registered 

apprenticeships in the state. The state has used Recovery Act funding to create a 

brochure that promotes apprenticeship. Finally, several of the green jobs initiatives 

funded under the Recovery Act had links to apprenticeship programs.

 Michigan. The state has set aside $1 million in Recovery Act funds for training provided 

in registered apprenticeship programs. Because many within the construction industry 

are unemployed, there is not a lot of recruitment or hiring of apprentices. Spending of 

Recovery Act funds on apprenticeships has been slow. If expenditures of Recovery Act

funding on apprenticeships continue to lag, the funds will be used to support other types 

of training.

 Ohio. The availability of Recovery Act funding has had little or no effect on linkages 

with registered apprenticeship programs to date (though such links existed prior to the 

Recovery Act). However, a portion of the Governor’s 15 percent discretionary Recovery 
67

Act funds has been used to fund a pre-apprenticeship program for youth, an initiative 

called ―Constructing Futures.‖ The goal of the Constructing Futures Initiative is to train 

Ohioans of historically underrepresented populations in the building trades so that they 

may excel in a career in construction, ultimately leading to a family-sustaining wage and 

occupation. The state is using $3.2 million from statewide Recovery Act workforce 

funds to award grants to provide pre-apprenticeship training. Funded programs are 

required to help trainees attain careers in construction occupations by preparing them to 

enroll and succeed in registered apprenticeship programs in those occupations. A 

competitive request for proposals was released statewide to workforce investment boards

(allowing for two or more workforce boards to apply together). Grant awards ranged 

from $400,000 to $1,000,000 to four organizations from Cincinnati, Columbus, and 

Toledo, with programs running from January 2010 to June 30, 2011. Eligible activities 

for grant funds include outreach to targeted populations, supportive services (including 

both pre-apprenticeship and during apprenticeship), basic literacy and GED attainment 

through University System of Ohio institutions, training stipends for pre-apprentices 

while in classroom work, and eligible tools and equipment.

D. Pell Grant Usage and Issues

Under the Recovery Act, to maximize the reach of WIA Adult formula funds, One-Stop 

Career Centers are to help eligible customers take advantage of the significant increase in Pell 

Grant funds also included in the Recovery Act. Also, subsequent to passage of the Recovery 

Act, the Administration sent guidance to the states11 encouraging them to notify UI beneficiaries 

of their potential eligibility for Pell Grants by letter, and to broaden their definition of ―approved 

training‖ for UI beneficiaries during economic downturns (UI beneficiaries con continue to 

receive UI benefits while in training if the training is considered ―approved training‖ under state 

laws and policies). 

 

11 U.S. Department of Labor, Employment and Training Administration, Training and Employment 

Guidance Letters (TEGLs) 21-08 (May 8, 2009) and 2-09 (August 26, 2009).
68

1. Results from NASWA Survey on Pell Grants and Approved Training for 

UI Claimants

As part of a NASWA 50-state survey12 conducted after the Recovery Act and the 

Administration’s guidance, state workforce agencies were asked about their experiences with 

respect to sending out a ―model‖ letter (developed by USDOL) to UI claimants to inform them 

about the Pell Grant program and explaining that beneficiaries could continue to receive UI 

benefits while in training with the state’s approval. They also were asked about changes to their 

policies on approved training for UI. Key findings from the survey were the following: 

 Thirty-nine of 49 states (80 percent) reported sending Pell Grant letters to claimants. One 

additional state was about to send out letters, and four other states wrote they provided 

the information in a different format. Of the remaining 5 states, 1 state reported current 

workloads prohibited sending the letter, 3 reported current UI policies on degree track 

programs were inconsistent with the Pell Grant initiative, and 1 reported an insolvent 

trust fund prohibited a benefit expansion. Few states measured response rates, but 

roughly 10 states reported a heavy response. 

 The types of actions states took to implement the initiative included: partnering with 

higher education to provide workshops; bringing in community college personnel to give 

staff and customers a better understanding of the Pell Grant process; hosting a special 

phone line to answer general questions regarding school attendance and UI; hosting a 

designated training session for local UI staff; contracting with a nonprofit to provide 

workshops and Pell Grants and financial aid through the Career One-Stops; and phasing 

the mailing of letters. 

 States also provided some feedback about the ―model letter‖ provided by USDOL to 

assist states in informing UI claimants about Pell Grants, including: suggestions to craft 

the letter to make it clear that no additional UI benefits would be received as a result of 

training and no financial aid was guaranteed as a result of the letter; suggestions the letter 

was too general and did not include enough substance; and suggestions to stagger 

mailings. 

 Forty percent of the states reported expanding the definition of ―approved training‖ 

through law or interpretation since the Recovery Act.

 

12 National Association of State Workforce Agencies, “NASWA Survey on Pell Grants and Approved 

Training for UI: Summary and State-by-State Results,” March 22, 2010.
69

2. Findings from Site Visits

Overall, during our site visits, states reported little change in policies or use of Pell 

Grants as a direct result of the Recovery Act, mostly because local workforce areas were already 

working under requirements that they make WIA training participants aware of and help them 

apply for Pell Grants. Similar to the findings of NASWA’s state survey, during site visits some 

states indicated that they had experienced challenges with respect to the ―model‖ letter they 

distributed to UI claimants informing them about Pell Grants (see below). 

Prior to ARRA, several state workforce officials observed, the WIA program had a 

requirement that WIA participants enrolling in training apply for Pell Grants and use such grants 

first to pay for training expenses. Under program requirements, the WIA program is to be the 

last payer for training after Pell Grants and other forms of student assistance. Workforce agency 

officials noted that while LWIA program staff notifies WIA participants of the need to make 

application for Pell Grants (if they are attending institutions that are qualified to receive such 

grants), they do not usually get involved in the application or processing of Pell Grants. In some 

One-Stop Centers visited as part of this study, community college staff was out-stationed fulltime or part-time to the One-Stop Center, which greatly facilitated WIA participants’ application 

to both the community college and for Pell Grants. Local workforce agency officials indicated 

that they are apprised of the results of Pell Grant applications by schools after a decision is made. 

When the educational institution reports back on whether an individual is to receive a Pell Grant 

and the amount of the grant, the tuition portion of the Pell Grant is offset against the amount of 

tuition paid by the WIA program. From the perspective of local workforce agencies, the receipt 

of Pell Grants helps to spread what are often limited WIA funds so that it is possible to serve 

additional WIA participants (than would otherwise have been served). Several examples of state 

workforce agency experiences with Pell Grants are provided in the examples below:
70

 Michigan. Prior to ARRA, the WIA program already had a mandate that WIA 

participants should apply for Pell Grants and use such grants first to pay for training 

expenses. WIA funds are to be used as the last resort for paying for training (i.e., after 

Pell Grants and other sources). The WIA programs (and local workforce development 

agencies) are very closely linked with community colleges and other educational 

institutions. Many One-Stops have community college representatives co-located at the 

One-Stop – these representatives conduct recruitment of WIA (and other One-Stop 

customers) into their schools and can help customers prepare applications for enrollment 

and Pell Grants right at the One-Stop Centers. With regard to Pell Grants, the state does 

not have readily available data on the number or percentage of WIA participants 

receiving such grants. 

 Montana. There is a sense that Pell Grants have been more widely used than prior to the 

Recovery Act in combination with WIA funds to cover both tuition (for which the 

preference is to use WIA) and living expenses (using Pell Grants). 

 New York. One-Stop customers are routinely provided information about how and 

where to apply for Pell grants. Counselors in One-Stop Centers identify Pell grants as a 

source of educational assistance for qualifying postsecondary education programs and 

include it in an individual’s training plan for approval. In addition, UI customers are 

mailed letters encouraging them to consider training and highlighting the recent changes 

regarding Pell Grant eligibility. 

 Ohio. With regard to Pell Grants, the WIA program already had a requirement that WIA 

participants should apply for Pell Grants and use such grants first to pay for training 

expenses. The process of applying for Pell Grants is largely under the purview of the 

educational institutions individuals attend, so local workforce areas do not usually get 

that involved in the process. Community colleges outstation staff to comprehensive OneStop Career Centers in the state, which facilitates application both to training programs 

held at community colleges and for Pell Grants. 

Finally with respect to Pell Grants, several states visited indicated they had encountered 

some challenges with respect to the model letter developed by ETA (and sent to states for 

dissemination) that was intended to notify UI claimants of the availability of increased Pell Grant 

funds and new rules pertaining to dislocated workers that provide for a potential reconsideration 

of income (i.e., providing for a ―look forward,‖ rather than a ―look back‖ at earnings that could 

potentially help dislocated workers qualify for Pell Grants). For example, according to one state 
71

agency, when it was distributed to UI claimants this model letter resulted in some confusion and 

difficulties for UI claimants. Some dislocated workers called the UI office to inquire about the 

possibility of obtaining Pell Grants to offset costs for education/training they were currently 

enrolled in – which set off questions about being ―ready and available‖ for work. This, in turn, 

set in motion reconsiderations for UI benefits for some claimants, and potential eventual loss of 

UI benefits (and need to repay benefits that had been paid out to the claimant). Several state 

agencies indicated that before sending this letter out they had made some relatively minor 

modifications to clarify language and make sure claimants fully understood Pell Grant changes.

E. Relationships with Institutions of Higher Learning

Under the Recovery Act, to increase state, regional, and local training capacity, the Act 

gives states the authority to enter into contracts with institutions of higher education, such as 

community colleges, to facilitate training in high-demand occupations, so long as the contract 

does not limit customer choice. About one-third of the 16 states visited indicated that they had 

awarded additional contracts to institutions of higher learning since receipt of Recovery Act 

funding. Seattle-King County Workforce Development Council officials noted that the 

contracted classroom training ―has been the most exciting, frustrating, and likely most impactful 

aspect of the Recovery Act. This was a real change to the system.‖ At the time of the site visit, 

10 classes with approximately 200 adults had gone through class-size training. In addition, the 

Washington State Legislature provided incentives for use of Recovery Act funds for class-size 

training by awarding WDCs seventy-five cents for every Recovery Act dollar spent on this type 

of training. 
72

For the most part, state and local workforce agencies indicated that relationships with 

institutions of higher education were well established prior to the Recovery Act. Because local 

workforce agencies issue ITAs for WIA participants for coursework at these institutions, the 

primary linkages with institutions of higher learning occur at the local level. Several states used 

Recovery Act funding to create customized, class-size training programs at community colleges 

or technical schools, which featured more flexible scheduling (i.e., not always tied to a semester 

or term schedule) and careful tailoring of curriculum to the needs of employers in high growth 

industry sectors. Such class-size programs generally led to some form of certification. Exhibit 

III-4 provides examples of how linkages between WIA programs and institutions of higher 

education have been affected by availability of Recovery Act funds, including several examples 

of special training initiatives undertaken in collaboration with educational institutions. 
Exhibit III-4: Examples of Approaches of WIA Programs Linking with Institutions of 

Higher Education

73

STATE VARIOUS APPROACHES TO LINKING WITH INSTITUTIONS OF HIGHER LEARNING

Colorado The relationship between the state’s community colleges and the workforce system pre -dates the Recovery Act, 

and there has been no real change in linkages as a result of the Recovery Act. The state has issued sector-based 

training grants using some Recovery Act funding. A $1.1M sector training RFP was issued, under which training 

provided must be in high growth industry sectors and the curriculum/training used must be industry driven. 

Recovery Act funding has also been used to provide scholarships for distance learning -- payments of up to 

$3,000 per class are made for training that is provided remotely (via distant learning) that leads to industry 

approved-certification, for example, in nursing and various IT certifications.

Illinois Illinois state workforce staff report that they have had a strong relationship with institutions of higher education, 

especially around their sector-based efforts. With the Recovery Act, some local areas have entered into class-size 

training contracts. Illinois has plans to continue its class-size training beyond the Recovery Act.

Montana At the state level, Montana made no special arrangements with training providers or other institutions of higher 

learning to increase their offerings and/or size. At the local level, the Helena Center for Technology offered a 50 

percent reduction in tuition for dislocated workers on a seat-available basis. In Kalispell, the Flathead Valley 

Community College increased both its class offerings and its class sizes. It also began a special welding track in 

conjunction with Stinger Welding in Libby, Montana where an expected 250 jobs are opening up.

Ohio The relationship between the state’s community colleges and the workforce system pre -dates the Recovery Act

and has been strong. Community colleges are particularly involved in providing ITA-funded training and also are 

part of several special training initiatives funded with Recovery Act funds, including the Recovery Act-funded 

Project Hometown Investment in Regional Economies (HIRE). Project HIRE provides enhanced job matching 

strategies linking employers and job seekers. Project HIRE includes hiring fairs and other outreach activities

which bring employers and dislocated workers together. State and local workforce investment specialists

coordinate Project HIRE events and activities. Ohio Learning Accounts (OLA) are flexible training accounts of 

up to $6,000 for eligible dislocated workers who require training or certification as a condition of accepting a 

bona fide job offer in a targeted industry or demand occupation. Training may be in the classroom at an 

institution of higher education (e.g., community college), at the workplace, or a combination of both. Up to $7 

million is available to match 1,400 One-Stop Center customers with hiring employers. Customers are enrolled in 

learning accounts once there is a commitment to employment and the customer requires additional short-term 

training as a condition of the employment. 

Virginia Moving the responsibility for WIA from the Governor’s office to the Community College system is expected to 

eventually improve the coordination between the workforce system and the community colleges. The transition 

at the state level is still in process, however. The new On Ramp Career Pathways initiative is also expected to 

improve coordination and collaboration. State Recovery Act 15% funds are being used to fund the On Ramp 

initiative, including establishing some new staff positions for Career Pathways Counselors. There is a recognition 

that the priority in One-Stop Centers has long been on employment and reorienting the system to training will 

take time. Community colleges have struggled with understanding the workforce system and knowing how to

connect to that system. The Recovery funds have allowed the state agency to speed up and enhance the direction 

that was already beginning to place more emphasis on training and credentials.

Washington The state legislature wanted to emphasize the importance of training, enacting the Washington State Engrossed 

Senate Substitute Bill (ESSB) 5809, which set aside $7 million in general revenue funds to incentivize local 

councils to use Recovery Act funds for training, particularly ―cohort training.‖ For every $1 a council invested in 

cohort training, it leveraged $0.75 from the state. For every $1 invested in an ITA, the council leveraged $0.25 

from the state. After the legislature established this seed money, the Governor also used Recovery Act funds to 

make an additional $5.5 million available for training incentives. This created intense interest in training across 

the state. 

The Recovery Act has had a particular impact on the system’s relationship with the community colleges due to 

the implementation of ―cohort training.‖ Prior to the Recovery Act, the biggest area of coordination with the 

community colleges was for incumbent worker training. To date, there have been approximately 100 cohort 

classes statewide in a range of industries – healthcare, business administration, IT, manufacturing/construction, 

energy/green energy, and forestry—much of which is using the I-Best model that contextualizes basic and 

occupational skills. Through March 2010, 1,258 individuals participated in cohort training (and more than 7,800 

have been trained overall using Recovery Act funds). 

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010. 
74

F. Targeting on Low-Income Individuals

Under the Recovery Act, priority use of WIA Adult funds must be for services to 

recipients of public assistance and other low-income individuals. States are particularly 

encouraged to provide training opportunities to these individuals. The NASWA state survey 

found that the vast majority of states reported that recipients of public assistance and other lowincome individuals receive priority of service for WIA Adult services, including training. The 

visits to states and LWIAs confirmed this survey finding. During interviews with state and local 

workforce agencies, officials in nearly every office indicated that the Recovery Act did not usher 

in much of a change with regard to providing services for low-income individuals because there 

had always been emphasis on providing priority of service for low-income individuals within the 

WIA Adult program. 

State workforce agencies passed along Recovery Act requirements with regard to 

providing priority for low-income individuals and requested that local plans reflect this priority. 

States typically left it up to local areas to set their own specific policies with regard to when 

priority of service requirements for low-income came into effect. However, some states were 

more prescriptive about such policies. For example, in Illinois, prior to the Recovery Act, the 

state required that 51% of WIA funds be spent on low-income individuals. With the Recovery 

Act, Illinois issued a state policy requiring local areas specifically to include plans to address the 

workforce training and placement needs of low-income, low-skilled and other target 

populations.

13

 Several other states had state policies that were explicit about providing services 

to low-income individuals, but differed from the Illinois policy – for example, in North Dakota, 

 

13 Policy Letter 08-ARRA-02, Local Plan Modifications Related to the American Recovery and 

Reinvestment Act of 2009.
75

once 70 percent of WIA Adult funds are obligated, the remaining funds must be used for 

providing services to low-income individuals. 

In most states visited, the specific policies on serving low-income individuals were left to 

local workforce areas to determine. Prior to the Recovery Act, local workforce areas already had 

such policies in place, which usually established priority for low-income individuals when 

funding became ―limited‖ under the WIA Adult program for intensive and training services. 

Most state and local workforce officials indicated that such policies changed little or not at all in 

response to the Recovery Act, though in some states more funding became available, which 

allowed for providing WIA-funding services targeted on more low-income individuals. Several 

state and local workforce officials noted that co-locating TANF and Supplemental Nutrition 

Assistance Program (SNAP) employment and training programs at One-Stops can make a 

difference in terms of facilitating and expanding enrollment of low-income individuals into the 

WIA Adult program.14 

Overall, as reflected in Exhibit III-5, state workforce agencies viewed the Recovery Act

as not leading to much change in policies or practices at the state or local workforce levels 

related to serving low-income individuals—WIA Adult programs already were targeted on and 

serving substantial numbers of low-income individuals. One exception is Montana, which raised 

the income cutoff for being considered low-income to 100 percent of the state’s self-sufficiency 

standard to assure that the state could spend its WIA funds. The Recovery Act did, however, 

bring additional resources to WIA Adult programs, which enabled local workforce areas to serve 

(at least temporarily) more low-income customers and/or to fund special initiatives focused on 

disadvantaged individuals.

 

14 SNAP was formerly called the Food Stamp Program.
Exhibit III-5: Examples of State Approaches to Targeting WIA Adult Services on LowIncome Individuals

76

STATE VARIOUS STATE APPROACHES TO SERVING LOW-INCOME INDIVIDUALS

Arizona In Arizona, local areas determine the emphasis on services to low-income individuals. In those areas where 

TANF Employment & Training is co-located in the One-Stop Center, there is a higher emphasis on serving lowincome customers. Local plan modification guidelines required Boards to declare either limited or unlimited 

funding status. With limited funding, Boards are required to focus on and provide priority to low-income

individuals, while with unlimited funding Boards have more service flexibility. In an environment that 

emphasizes meeting performance measures and qualifying for incentive funds, there can be a disincentive to 

serving low-income customers. 

Florida Recovery Act funds give priority to low-income individuals and welfare recipients, and the regions were 

specifically notified of that. Otherwise, there are no target goals for serving low-income individuals. Florida has 

a federal waiver that allows WIA staff (rather than human services agency staff) to provide services to SNAP

recipients as well as TANF recipients including eligibility determination and application for additional programs.

Michigan In Michigan, there has always been priority of training services for low-income customers when funding becomes

scarce. Many LWIBs face scarcity of funds and so target WIA Adult intensive services and training on lowincome individuals. Because One-Stops are service locations for the TANF employment and training program, 

sizable numbers of TANF recipients are co-enrolled in WIA. The Recovery Act has not had any overall effect on 

the extent to which low-income individuals are served under the WIA program.

Montana Prior to the recession, Montana had prioritized WIA Adult services to those customers who fell below 80 percent 

of Montana’s self-sufficiency standard. With the Recovery Act, Montana raised this threshold to 100 percent of 

the self-sufficiency standard to make more people eligible for training. Montana set up a separate program that it 

called WIA Adult Recovery Act for these enrollments. Montana officials also sought to co-enroll eligible 

participants in both what it called its Recovery Act program and its regular Adult and Dislocated Worker 

programs in order to carry customers through training and supportive services once the period of the Recovery 

Act had ended.

Nevada The implementation of the Recovery Act has not changed the priority of service to low-income individuals. 

There is enough money currently to meet all training needs that have a good possibility of employment. 

New York Since 2008, the provision of services to low-income workers has been a priority for New York; therefore, the 

implementation of the Recovery Act has not changed that priority, although the additional funding resources have 

allowed the state to expand those opportunities. The state was already actively engaged in assisting this group 

through the WIA Adult program and through a variety of state-sponsored initiatives like the weatherization 

project funded through the State Office of Temporary and Disability Assistance (OTDA) and the Emerging and 

Transitional Worker Training program. Low-income workers are targeted in most of the other economic 

development training programs supported by state and federal grants. Local workforce areas were advised of the 

Recovery Act -mandated priority of service for the WIA Adult program through local planning guidelines and 

were required to explain how they were implementing the delivery of intensive and training services for lowincome individuals. 

Ohio There has been no change with respect to providing services to low-income individuals in the WIA Adult 

program. There is a ―limited funds policy‖ whereby after local areas hit a certain percentage of expenditure of 

WIA Adult funds, low-income individuals have priority for training and intensive services. There is a strong 

commitment to targeting training on low-income adults and youth; for example, one program implemented with 

Recovery Act funding is the Urban Youth Works program. The state workforce agency awarded $6.7 million of 

Recovery Act funding for urban youth programs as part of the Urban Youth Works competitive grant program. 

The grant addresses the needs of urban youth to successfully participate in education and training programs that 

will ultimately lead to a self-sufficient wage and occupation based on labor market demand. Grantees include 15 

organizations representing 12 nonprofit organizations, two local workforce investment areas, and one state 

agency. Organizations represent low-income youth in seven counties: Cuyahoga, Franklin, Hamilton, Lucas, 

Mahoning, Montgomery, and Stark. More than 1,500 youth will be served from October 2009 to December 31, 

2010.

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010.
77

G. Supportive Services and Needs-Related Payments

The Recovery Act emphasizes the authority to use Recovery Act funds for supportive 

services and needs-related payments to ensure participants have the means to pay living expenses 

while receiving training. Supportive services include transportation, childcare, dependent care, 

housing, and other services that are necessary to enable an individual who is unable to obtain the 

services from other programs to participate in activities authorized under WIA. Needs-related 

payments may be provided to adults who are unemployed and do not qualify for or have ceased 

to qualify for unemployment compensation, for the purpose of enabling such individuals to 

participate in training. LWIAs can take advantage of the availability of these payments so that 

customers can pursue their career goals, rather than their short-term income needs determining 

the length of their training. 

In the NASWA survey of states, many states reported moderate (up to 10 percent) or 

substantial (10 percent or more) increases in WIA-related spending on supportive services since 

the Recovery Act on the following types of services: transportation (81 percent of states 

reported a moderate or substantial increase in expenditures); child care (81 percent); housing (39 

percent); dependent care (36 percent); and other services necessary for participation (78 percent). 

In comparison to supportive services, far fewer states provided needs-related payments (45 

percent) before the Recovery Act. According to this survey, slightly fewer than half the states 

reported increasing funding moderately or substantially under the WIA program for needsrelated payments (45 percent of states for the WIA Adult program and 47 percent for the WIA 

Dislocated Workers program). 

Site visits to states indicated that states and local workforce areas had made little change 

in policies with respect to supportive services or needs-related payments in response to the 
78

Recovery Act. Exhibit III-6 provides several illustrations of the varying policies with regard to 

supportive services and needs-related payments across the states visited as part of this study. At 

the time the site visits were conducted, it was too early to determine whether there have been 

increases in expenditures for supportive services or needs-related payments as a result of the 

Recovery Act. Anecdotal evidence from the site visits suggests that in some states, because of 

an increase in number of participants flowing through One-Stop Career Centers and the WIA 

program (as a result of the recession and availability of Recovery Act funding) there has been at 

least a modest increase in expenditures on supportive services. State and local workforce 

agencies indicated that amounts spent on supportive services and needs-related payments both 

before and since receipt were a relatively small part of overall WIA expenditures (and represent 

only a fraction of total amounts expended on training and intensive services). 

State agencies for the most part allowed local workforce agencies considerable discretion 

with respect to setting supportive services and needs-related payments policies and procedures. 

For example, in terms of types of supportive services, local workforce agencies could to a large 

extent determine which supportive services are offered, under what circumstances such services 

would be provided and to whom, caps on such services, and overall amounts of funding that

would be devoted to supportive services. State workforce agencies required local workforce 

areas to document in their local plans policies on providing supportive services and needs-related 

payments. In most states and local areas visited, most of the budget for supportive services 

covered expenses related to transportation, childcare, clothing/tools, rent, and other emergency 

payments. Local workforce agencies also looked to One-Stop partners and other human service 

agencies where possible to pick up costs related to supportive services in order to devote limited 

WIA funding primarily to provision of training and other intensive services.
79

Regarding needs-related payments, there was little evidence of change in policies or 

procedures at the state or local levels in response to the Recovery Act. State agencies made 

needs-related payments an option available to local workforce areas. In many of the states 

visited, because of limited WIA funding, local workforce areas elected not to offer needs-related 

payments, or if they did make them available, to spend very few resources for such payments. 

Some local workforce agency officials indicated that such payments could quickly dissipate 

available WIA funding and that there were clear trade-offs between providing training (and other 

intensive services) versus making available needs-related payments to cover living expenses. 

Local workforce officials indicated that they mostly looked to other programs and partnering 

agencies to cover needs-related payments. For example, in some instances, individuals entering 

training had Pell Grants to cover living expenses, had remaining weeks of UI, or could obtain 

temporary assistance from TANF, SNAP, housing programs, or other human service programs. 

Overall, both with regard to supportive services and needs-related payments, state and 

local workforce agencies changed little with respect to policies and the types or extent of 

assistance provided to WIA participants. 
Exhibit III-6: Examples of State Approaches to Providing Supportive Services and 

Needs-Related Payments

80

STATE VARIOUS STATE APPROACHES TO SUPPORTIVE SERVICES AND NEEDS-RELATED 

PAYMENTS

Arizona In Arizona, the array of supportive services prior to the Recovery Act included transportation and emergency 

assistance. Since the Recovery Act, housing and needs-related payments have been added to the options,though 

not all local areas are participating. The state has started to emphasize a wrap-around approach to addressing a 

customer’s multiple needs. 

Colorado Within Colorado, there has been no change since the Recovery Act in the types or amounts of WIA funds spent

on support services. Workforce regions have considerable autonomy with respect to setting policies and 

payments on support services, which can cover a wide range of supports (e.g., transportation, tools, work clothes, 

childcare, etc.). It is anticipated that supportive services will be cut back in some workforce regions in the 

coming year (PY 2010), because Recovery Act funding will be largely exhausted. Both before and after the 

Recovery Act, there were and continue to be no expenditures made for needs-related payments. 

Florida There has been no policy change with regard to supportive services or needs-related payments under the 

Recovery Act. The state has encouraged regional directors to provide supportive services, but they have gotten 

little response because the directors want to avoid such services becoming viewed as an entitlement , and many are 

reluctant to set a precedent since after the Recovery Act they will not be able to afford generous services. The 

state has discussed needs-related payments with local WIBs, but that is at local discretion and most have chosen 

not to provide needs-related payments, mainly because of limited funding.

Michigan There has been no change since the Recovery Act in the types or amounts of WIA funds spent on support 

services. LWIBs within the state may cover any allowable support services, and what is covered is left to local 

workforce areas to decide. The state reports that there has been no discernable change in exp enditure patterns 

with regard to support services. The decision of whether to provide needs-related payments is left to local 

workforce areas. Only a few local areas provide needs-related payments. 

Montana Montana has always allowed supportive service and needs-related payments but has not used them often, finding 

them too costly. With the extension in UI benefits during the recession, there has not been as strong a demand for 

such payments, though local One-Stops have issued them on an occasional case-by-case basis. There is no set 

cap to the amount of dollars a person might be able to draw down.

Ohio There has been no change since the Recovery Act in the types or amounts of WIA funds expended on support 

services. LWIBs provide the support services as appropriate, including transportation, work clothing, 

tools/equipment, and childcare. Officials estimated that about 10% of WIA funding was spent on support 

services (compared to about 50% on training). Both before and after the Recovery Act, there were virtually no 

expenditures of WIA funding on needs-related payments within the state. The problem with needs related 

payments is that they consume available funding quickly and, as a result, less is left to provide training and other 

services. Only one or two LWIBs in the state have ever provided needs-related payments.

Washington Washington emphasized the need for local areas to leverage community supports in addition to federal and state 

resources available to provide wrap-around services to customers. Most of the local programs have long-term 

relationships with community organizations and resources for supporting customers. The only new guidance as a 

result of the Recovery Act was to clarify the policy on needs-related payments; however, few areas are offering 

that service. Only the Northwest Workforce Development Council (located in Bellingham, WA) is offering 

needs-related payments, which they also offered prior to the Recovery Act. One issue in Washington is that 

needs-related payments are calculated against UI benefits, while other support services are not. Another issue is 

that most LWIAs do not have the capacity to issue weekly checks; they are better set-up to manage emergency 

payments.

Wisconsin Within Wisconsin, there has been no change since the Recovery Act in the types or amounts of WIA funds 

expended on support services. LWIBs within the state spend only a very small proportion of their WIA allocation 

on support services such as transportation, childcare, dependent care, and rent. Data is not tracked at the state 

level on expenditures for various categories of support services. Both before and after the Recovery Act, there 

were and continue to be no expenditures made for needs-related payments. Only one LWIB within the state has 

made provision for payment of needs-based payments for WIA participants, but this LWIB has not had the 

available funds to make such payments. Sometimes Pell Grants that WIA participants receive cover needs-related 

expenses.

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010
81

H. Expectations When Recovery Act Funding Is Exhausted

Even though at the time of the visits states were less than half way through the two-year 

period available to spend Recovery Act funds, they were already anticipating and planning for 

when this temporary source of funding would no longer be available to support training and 

other activities within the state. One of the main concerns expressed across states is that 

Recovery Act funding will be winding down at a time when unemployment rates still are likely 

to be elevated, so One-Stop Career Centers (and the various employment and training programs, 

especially WIA and Wagner-Peyser) likely will continue to be flooded with unemployed and 

underemployed workers and may lack adequate resources to meet the employment and training 

needs of these workers. As shown in Exhibit III-7, most states indicated that once Recovery Act

funds are exhausted, WIA participant and expenditure levels would likely revert to pre-Recovery 

Act levels. Nearly all states and local workforce agencies indicated that they had not built new 

infrastructure, or had added few (if any) permanent workers to avoid laying off permanent staff. 

However, in some instances, Recovery Act funds have been used to fund temporary workers to 

staff One-Stop resource rooms and otherwise provide services for WIA customers. State and 

local workforce agencies were hopeful that at least some of these temporary staff would be 

absorbed as permanent staff retired and through normal attrition. None of the states or localities 

visited envisioned substantial layoffs of permanent staff after the Recovery Act. A key concern, 

though, was whether adequate levels of resources would be available to both staff resource 

rooms and meet what is still expected to continue to be very high levels of demand for services 

and training. There was also some concern that funds could become scarce to support long-term 

training started with Recovery Act funds. Several states also expressed concern that WIA 

funding could remain flat or even be cut back – with particular concern for WIA Dislocated 
82

Worker funding (which can fluctuate much more year-to-year because there is no hold harmless 

clause as there is under the WIA Adult program). Several states indicated hope that other 

funding sources might quickly fill in the gap left by loss of Recovery Act funding, for example, 

added funds from an ETA competitive grant or a National Emergency Grant (NEG). Several of 

the concerns and challenges for the future expressed by state workforce agencies are highlighted 

below in Exhibit III-7.
Exhibit III-7: State Expectations of What Will Happen to the WIA Program When 

Recovery Act Funds Are Exhausted

83

STATE STATE EXPECTATIONS OF WHAT WILL HAPPEN TO THE WIA 

PROGRAM WHEN RECOVERY ACT WIA FUNDS ARE EXHAUS TED

Arizona Return to pre-Recovery Act levels.

Colorado Return to pre-Recovery Act levels.

Florida Return to pre-Recovery Act levels.

Illinois

Return to pre-Recovery Act levels -- Illinois officials, particularly those in Chicago 

where nearly all WIA money was spent by March 2010, are very concerned about 

what happens when Recovery Act funding is exhausted and no other funding source is 

available to replace it. 

Louisiana

Concern that they will return to pre- Recovery Act staff levels, hence program levels 

off when money ends, but needs continue to increase because they will still have high 

unemployment.

Michigan

Return to pre-Recovery Act levels -- with uncertainty about the upcoming year’s WIA 

formula allocation (and Recovery Act funding already largely obligated or spent), 

there is concern funding will not be available for a second year of training for 

customers in long-term training.

Montana

Because of the large number of job losses in timber and related industries, Montana is 

expected to receive a 25 percent increase in WIA Dislocated Worker funding for 

2011, though this will not come close to keeping pace with recession-related demands 

for service. Montana officials are particularly worried about having to ―close the 

front door‖ to new registrants (whose numbers have yet to slow) as additional funding 

will be needed to continue to support those already registered and receiving training 

(and who are staying in services longer than in the past). One official noted: ―We’re 

concerned about what happens come July 1, when we have folks currently enrolled in 

training and will have to carry them; this may mean we have to take fewer numbers at 

the front end.‖

Nevada

Given the economy in Nevada, they anticipate that formula funding will be 

significantly higher than in pre-Recovery Act periods so they will be able to continue 

to serve increased numbers of WIA Adult and DW customers.

New York Return to pre-Recovery Act levels.

North Dakota Return to pre-Recovery Act levels or lower given that funding does not account for 

state cost of living increases for workers.

Ohio

Return to pre-Recovery Act levels -- There is concern Recovery Act funding will run 

out with a continued surging demand for services at One-Stop Career Centers. State 

administrators noted that not only would Recovery Act funding end, but the state’s 

allocation for formula funds (particularly for WIA Dislocated Worker funds) the 

coming year would be cut (note: WIA formula funds to the state were cut from 

$140M in PY 2009 to $127M in PY 2010).

Pennsylvania Keep new staff; work with state legislature to fund grant projects and Industry 

Partnerships; maintain one-on-one counseling and assessment.

Texas Return to pre-Recovery Act levels.

Virginia Many functions of new VEC offices may be incorporated into One-Stops or VEC 

Workforce Centers – some new offices will continue for a while if possible.

Washington Return to pre- Recovery Act levels.

Wisconsin

Return to pre- Recovery Act levels -- State officials expect that it will be difficult to 

maintain the 70 percent training expenditure requirement once Recovery Act funding 

is exhausted. Most likely, the state will maintain the 35 percent requirement for 

regular WIA formula funds – though a lot will depend on when and if WIA is 

reauthorized (and requirements set forth in WIA reauthorization should it be enacted).

Note: Exhibit is based on site visits conducted to states between December 2010 and June 2010.
84

CHAPTER IV

WAGNER-PEYSER EMPLOYMENT SERVICES

A. Background

The Wagner-Peyser (WP) Act of 1933 established the Employment Service (ES), 

sometimes called the Job Service, which provides labor exchange services for workers and 

employers. Services for workers include job search assistance, placement assistance, job fairs, 

and labor market information. Services for employers include labor market information, 

employee recruitment, job fairs, development of job descriptions, and assistance during layoffs

and closings. The Employment Service has also traditionally provided job search assistance for 

UI claimants, and served migrant and seasonal farm workers, youth, individuals with disabilities, 

ex-offenders, older workers, and other special populations. In 1998, the Act was amended to 

make the Employment Service part of the One-Stop delivery system with the objective of having 

all workforce development activities easily accessible and often in the same location.15

Prior to enactment of the Recovery Act, the Employment Service functions had steadily 

diminished due to sustained periods of federal funding cuts and steady state funding. The ability 

of the WP- funded staff to provide one-on-one assistance to all job seekers had all but 

disappeared in the early 1980s. To continue to serve job seekers, innovative modes of service 

delivery were developed. Today there are resource rooms for self-directed services, allowing 

customers to use computers with Internet access for reviewing job listings, developing resumes, 

and researching labor market information for any area in the country. In cases where customers 

 

15 http://www.doleta.gov/programs/wagner_peyser.cfm
85

are less skilled in the use of Internet tools, a second level of service includes the service of a 

resource room attendant. One-on-one services are available to customers needing an assessment 

of skills, abilities, and aptitudes, as well as career guidance or counseling if a career change is 

being considered. In addition to these kinds of services, many Employment Service offices and 

One-Stop Career Centers with ES services offer workshops where job search techniques are 

discussed or where resume preparation assistance is provided. Customers seeking job training 

are often scheduled into workshops where different training programs are discussed and 

eligibility requirements are explained.

B. Operating Policies/Changes as a Result of the Recovery Act

1. General Operational Structure

State agencies administer ES services, and those services are provided by state employees

in all but two states in the study, Colorado and Michigan, which operate demonstrations 

approved by USDOL that allow non-state public employees to deliver Wagner Peyser services at 

the local level. The majority of study states have all ES services integrated into their One-Stop 

systems. Of the 16 states visited prior to June 1, 2010, 11 did not have any separate ES offices, 

and all WP services were delivered in a One-Stop setting. One-Stops in several of these states 

were managed by the Employment Service, with WIA being a partner. In the remaining 5 states, 

there were some with stand-alone ES offices, but all of these states have One-Stop operations 

with ES, WIA, TAA, and other workforce development programs under one roof in at least one 

One-Stop Career Center in each local workforce investment area, as required by the WIA statute. 

Colorado and Michigan have longstanding demonstrations in which ES/Wagner-Peyser 

staff is not required to be state employees. Under the demonstration rules, ES staff can be 
86

employees of local public agencies such as local education authorities, city government, or 

community colleges. In addition to providing Wagner-Peyser services (including staffing of 

One-Stop resource rooms), staff in these states is responsible for providing direct customer 

services under the Trade Adjustment Assistance (TAA) and Reemployment Services (RES)

programs.

With the advent of the Recovery Act, no states reported any changes to their existing ES 

service delivery structure. However, Arizona and Virginia opened new offices with Recovery 

Act funds to accommodate increased need. There was also no change in services offered in these 

new locations, but because of additional staff, it was possible to reduce wait times for services.

2. Co-Enrollment Policies

A majority of states do not automatically co-enroll ES customers in WIA. Customers 

coming into the One-Stop or Employment Service Office are normally first offered core services 

in the self-help resource rooms where they are enrolled in ES. If customers are only seeking 

more self-directed services such as research on labor market information, information on 

available jobs, or assistance in the development of a resume, enrollment in WIA is typically not 

automatic. Because this is the primary pattern of service across the states visited, most WIA 

customers are co-enrolled in ES as ES services are the first offered to visitors to ES or One-Stop

offices.

3. Assessment and Counseling

All 16 states visited reported that they did not change their policies on assessment and 

counseling as a result of the Recovery Act. According to some states, the addition of staff in the 

local offices, often hired using Recovery Act funds, resulted in more customers being 

encouraged to complete enrollment documents and consider utilizing the assistance of staff 
87

because the wait time for assistance in the resource room and for counseling was less daunting. 

Several states reported that at the beginning of the recession, there were lines of people out the 

door waiting to start the process and that using the resource room had to be on a scheduled basis. 

Where possible, some One-Stop offices had evening hours to accommodate the demand. 

In the NASWA Survey on the Workforce Provisions of the Recovery Act, 75 percent of 

states reported an increase in the number of customers being assessed or counseled. This number 

is consistent with comments made during the site visits, but in the site visits the increase was 

attributed to an increase in customer demand and not a change in policy. It is the policy of most 

states to do an assessment and offer counseling if needed, but the availability of staff to conduct 

these services was limited, sometimes resulting in customers not taking advantage of the service. 

Increased assessment and counseling numbers can also be partly attributed to the services 

provided as a result of Reemployment Services (RES) funding rather than WP increases. A full 

discussion of RES services is covered in the next chapter of this report.

Several states enhanced their assessment and counseling activities by purchasing 

proprietary programs to assist in determining customer skills, knowledge, and abilities for career 

counseling and job placement. Some of the systems mentioned were: 

 WorkKeys

16: a three-step assessment and training program matching individuals to 

jobs and training. The first step includes assessments to measure cognitive abilities 

such as applied mathematics, reading for information, and locating information

(foundational skills), and assessments to predict job behavior (personal skills). The 

second step is conducting a job analysis, and the third step is training. The training 

module matches the skills of the worker with selected occupations to determine if 

there are gaps which can be addressed by training. This final step includes KeyTrain, 

which offers curriculum details to address the skills gaps. Once a customer has 

completed the assessment, a certificate of proficiency is obtained from WorkKeysthat 

is then used to facilitate job search activities. 

 

16 This is based on http://www.act.org/workkeys/ accessed July 15, 2010.
88

 TORQ17: the Transferable Occupation Relationship Quotient is a single measurement

that defines "transferability" of an individual’s skills between occupations. The tool

links occupations based on the abilities, skills, and knowledge required by workers in

occupations using the O*NET database. This is both a job search and counseling 

tool.

 Smart 201018: artificial intelligence software used in New York that analyzes a 

customer’s resume for skills, work experience, and related talents. The software 

compares the content in resumes submitted against the content in job orders, sorting 

through words and similar themes. The system then recommends a number of job leads 

drawn from the New York State job bank. These job leads are emailed directly to the 

customer by One-Stop staff. The appeal of this tool is that it continues to generate job 

leads until the resume is removed. Changes can be made to the resume, which, in 

turn, will change the focus of the search.

 Job Zone19: an online resource that includes a career exploration section, a selfassessment section, and resume preparation assistance. The user may view

occupations, training program information, and information on colleges. The selfassessment includes a review of career interests and work values as well as skill 

surveys. The resume preparation section not only includes information on how to 

construct a resume, but allows the user to develop and store multiple resumes that can 

be used for different occupations. The system also includes a job search journal.

Some states had already implemented these programs prior to the receipt of Recovery Act 

funding, but Recovery Act funds allowed for increased customer usage because some 

assessments such as WorkKeys have per-person charges. The states also reported that having 

these systems in place will be very useful once Recovery Act funds for staffing disappear.

4. Staffing

According to the states visited, planning for Recovery Act implementation for WP/ES 

was conducted by existing staff. States generally elected to use the majority of the Recovery Act 

funding to increase staffing at the One-Stops or local ES offices. When central office staff was 

hired using Recovery Act funds, generally the functions performed included program oversight, 

labor market information development, or special projects such as Recovery Act liaison, business 

 

17 Source is See http://www.workforceassociates.com/torq.html accessed July 15, 2010.

18 Information on SMART 2010 is based on interviews with state and local respondents. 

19 Source is http://www.labor.state.ny.us/stats/PDFs/jobzone_fact_sheet.pdf accessed July 15, 2010.
89

development, or green jobs. States generally hired temporary full-time, part-time, and 

intermittent workers, so Full-Time Equivalent (FTE) information does not tell the whole story 

regarding numbers of new people working in WP/ES. Because the WP/ES implemented RES in 

all but one state visited, hiring statistics cited by the states often comingled the numbers for RES 

and WP/ES. The following are examples of WP/ES hires reported by the states:

 Arizona filled 20 seasonal ES positions and added 25 temporary RES staff. These 

workers will be funded by formula ES funds when the Recovery Act funds are 

exhausted for at least one additional year. 

 Texas hired 325 temporary ES staff to help meet the demand for services at One-Stop 

centers. 

 Colorado staff stated that the Recovery Act provided extra resources that enabled 

some workforce regions to hire and deploy additional staff to One-Stop resource 

rooms to deal with the surge of job seekers coming into One-Stops for assistance.

 Florida hired four staff for monitoring and performance measurement in WP/ES who 

they hope to move into permanent positions. 

 Michigan’s Department of Energy, Labor, and Economic Growth officials observed 

that Recovery funding was spent through existing programs (such as WIA and the

ES) and distributed via formula as quickly as possible to the 25 local areas spread 

across the state. The state agency urged local areas to spend Recovery Act funds 

quickly (within the first year), and not to build infrastructure or hire permanent staff.

 Montana’s Department of Labor and Industry added 23 temporary employees to meet

increased demand for WP/ES services. They plan to move these employees into 

permanent positions through vacancies and attrition.

 Virginia hired 4 statewide coordinators and 12 regional specialists for newly 

established Business and Economic Development Specialist positions. They also 

hired 2 staff in the Registered Apprenticeship program agency. 

In states such as New York, Texas, and Florida where there is full program integration 

between WIA and ES, core services traditionally associated with WP/ES may be carried out by 

WIA funded staff, so making a distinction regarding WP and WIA staffing (and funding for ES 

services) is almost impossible.

The challenge facing states related to WP/ES staffing is that the WP/ES positions are 

generally covered by state civil service. According to some states, this meant that the hiring 
90

process for positions could take several months. For a program with a one-year duration, four 

months could be spent in the hiring process, not to mention the additional time needed for 

training. If there was a vacancy toward the end of the program year, there was no point in 

attempting to refill the spot. Many of the states also faced hiring freezes, and although they were 

ultimately able to move forward with recruitment, getting waivers from the appropriate state 

authority added additional time to the process. Some states were able to promote ES staff to fill 

higher level positions for one-on-one assessment and counseling and hire temporary staff to 

provide some staff-assisted services. 

In states with high unemployment rates, finding quality staff was relatively easy, whereas 

in low-unemployment states like North Dakota, the state was in competition with a healthy 

private sector, which could often offer better pay and benefits. Several state officials mentioned 

that the recession had helped them attract better quality staff than in periods of full employment 

because of the larger pool of available high-skilled workers. 

C. Challenges

Not surprisingly, the major difficulties faced by the states in the ES/WP program were

staffing and turnover. As mentioned earlier, the challenges were due to operating within the 

confines of civil service requirements and dealing with hiring freezes. Exhibit IV-1 provides a 

sample of challenges cited by the states.
91

Exhibit IV-1

Challenges in Implementing Wagner-Peyser Programs Under the Recovery Act

CHALLENGES STATE COMMENTS

Staffing Arizona – The hiring freeze required the agency to obtain specific waivers to spend 

Recovery Act funds on ES staff, adding about a month to the process.

Florida – Hiring additional WP/ES staff was a challenge, as was the need to train 

new staff.

Illinois – There were hiring delays for new, intermittent WP/ES staff, and once hired, 

the staff could only work for 1,500 hours.

Montana – Bringing on and training new WP/ES staff at the same time Job Service 

was deluged with new claimants was very difficult.

North Dakota – At the same time North Dakota was attempting to increase the 

number of WP/ES staff, their Human Resources Department experienced 100 % staff 

turnover. In addition, North Dakota’s unemployment rate is the lowest in the nation 

which means that finding people willing to accept temporary work, or keeping 

temporary staff on, is more problematic than in most other states.

Ohio – Bringing on 100 intermittent staff was inherently difficult. (WP and RES 

staff)

Pennsylvania – The hiring process was challenging for the state because they had to 

obtain exceptions to the hiring freeze and hire permanent merit staff, which was a 

lengthy process.

Texas – The state had difficulty in hiring and experienced turnover in the temporary 

ES positions funded by the Recovery Act.

Virginia – The state experienced delays in bringing on new WP/ES staff which, 

when coupled with the need to train all new staff, resulted in staff shortages at the 

local level. The state cited background checks as a problem in the hiring process. 

Washington – Hiring and training of WP/ES staff was a challenge for the state.

Funding Illinois – Respondents were concerned about what will happen once Recovery Act 

funds are spent, especially as the need for WP/ES services has not abated.

Louisiana – State officials expressed a need for additional funding for more staff 

development to deal with harder to serve populations and continued long-term 

unemployment.

Office Space Florida – The state needed to find space without opening new centers to deal with an 

increase in customers.

New York – Customers at some centers experienced wait times to access computers 

in resource rooms, waits for appointments with counselors, and crowded orientation 

meetings. Some locations were able to secure donated space or short-term leases for 
92

CHALLENGES STATE COMMENTS

temporary extra space, but in some areas of the state such arrangements were not 

possible. The major issue was that given the temporary nature of Recovery Act 

funding, long-term lease arrangements were not possible.

Other Issues Illinois – State procurement process in purchasing new automated labor exchange 

program is cumbersome.

Nevada – Serving large numbers of clients—10,000 as of 4/30/2010.

New York – Not only were there large increases in the numbers of customers coming 

into the One-Stop, but the characteristics of ES customers have changed. Individuals 

with long work histories but little experience in job search activities tended to need 

more assistance searching for a job and in some cases demanded more attention.

 

North Dakota – Serving large numbers of clients is a major challenge.

Texas – Officials were concerned about the impending layoff of workers on Sept. 

30, 2010. 

D. Major Achievements

The major achievement cited by most of the state and local respondents was their ability 

to serve many more customers. Some states reported that they were better prepared to meet this 

challenge because of changes to policies (e.g., co-enrollment in WIA) or their workforce systems

(e.g., integrating ES and WIA services, computerized self-assessment tools) they had 

implemented prior to the Recovery Act. For example, New York officials reported that the 

state’s integration of programs at the state agency and at One-Stop offices allowed them to scale 

up to serve the increased number of customers. The state has cross-trained all One-Stop staff, so 

ES and WIA staff could be deployed where needed. Other major accomplishments included 

improving business services and the introduction of additional labor market and assessment 

tools. Exhibit IV-2 provides a sampling of the accomplishments cited by the states.
93

Exhibit IV-2

Achievements in Implementing Wagner-Peyser Programs under the Recovery Act

ACHIEVEMENTS STATE COMMENTS

Serving More Customers Colorado – The Recovery Act provided extra resources to hire and deploy 

additional WP/ES staff to One-Stop resource rooms to deal with the surge of job 

seekers.

Montana – The Recovery Act enabled the state to have a major expansion of 

services without increasing the ―size of the business.‖ 

Nevada – Lines, which had once snaked around the buildings, were eliminated

due to additional WP/ES staffing.

Ohio – The hiring of 100 intermittent WP/ES staff helped One-Stops deal with 

huge surges in customers and expand RES orientations for UI claimants.

Pennsylvania – The Recovery Act funding allowed the Department of Labor and 

Industry to become more strategic in how they focused their workforce 

development investments. The key was to invest in increasing the service level 

(e.g., increased staffing, one-on-one assessments), not in facilities, equipment, or 

websites. There were greatly increased service levels because of Recovery Act 

money.

Virginia – New Virginia Employment Commission and UI express offices 

increased the number of access points for ES customers and returned to one-onone assessments.

Program/Service 

Enhancements

Washington – The state implemented a new approach to business services with 

Recovery Act funding. The vision has shifted from engaging employers in the 

One-Stop to actively working with employers to find jobs that match the 

inventory of skills of the customers in the system.

New York – Use of technology tools enabled the state and LWIAs to manage 

workforce and UI programs and better serve customers. The SMART 2010 

technology was appropriate for serving customers with Internet access, and 

JobZone has been successful for career exploration by adults, especially for those 

who may need skills upgrades and need to plan for training.

 North Dakota – Purchased TORQ software which is used to develop STA 

 (Skills Transferability Analysis) reports for those occupations affected 

 by layoffs. These were provided to One-Stop Offices to be used in 

 rapid response events and working with laid off workers. 

One Stop Enhancements Arizona – Used ES funds to improve the infrastructure of One-Stops including 

redesigning lobbies and resource rooms, increasing the size of some locations, 

and adding new television screens for videos and looped information.

Texas – Opened new One-Stop centers in Dallas, Tarrant County, and Alamo

Other Successes Nevada – Officials believed they were in a better position to implement the 

Recovery Act due to the existing structures in place in JobConnect Offices and in 

the LWIB structure. They did not feel the need to change procedures to 

accommodate Recovery Act demand.

7- Nevada – Being able to direct Recovery Act resources into business services 

which have the potential to enhance job opportunities
94

E. After the Recovery Act

Many states are not optimistic about their ability to maintain the level of services 

established with Recovery Act funding. Most states hired temporary or intermittent staff for ES 

positions, knowing that once the Recovery Act funds were spent, the formula monies would not 

be sufficient to support the additional positions. In most cases, states did indicate that they 

would keep staff if positions became available through normal attrition. Three states were 

somewhat positive about retaining staff after Recovery Act funding was exhausted. 

Pennsylvania hired staff in ―permanent‖ positions, which further demonstrated their commitment 

to retain staff. Three other states were more pessimistic about retaining any staff past the initial 

funding cycle. Those states that have implemented additional self-help tools believe that they 

will be able to continue to support those activities. 
95

CHAPTER V

REEMPLOYMENT SERVICES

This chapter presents findings on Reemployment Services (RES) from site visits 

conducted in 16 states and 32 local areas between December 2009 and June 2010. Following a 

brief introduction to Reemployment Services and the changes introduced in the Recovery Act

and TEGL 14-08, the chapter summarizes policy and operational changes, staffing, and reporting

in the 16 states visited. 

A. Introduction

Reemployment Services (RES) funded under the Wagner-Peyser Act typically are 

provided by the Employment Service (ES) to UI claimants to accelerate unemployed workers’ 

reconnection in the labor market.20 Services available include targeted job search assistance, 

counseling, assessment, and employment referrals, as well as other ES activities normally funded 

by the Wagner-Peyser Act. RES funds may be used to provide more one-on-one, intensive case 

management than is allowed under ES funding. Specific grants for RES were last distributed to 

the states in Program Year (PY) 2005. 

Through the Worker Profiling and Reemployment Services (WPRS) system, states have 

developed a range of models, statistical and other, to identify specific groups of UI claimants 

targeted for Reemployment Services. Under the 1993 Amendments to the Social Security Act 

contained in P.L. 103-152, claimants who are identified as most likely to exhaust UI benefits and 

 

20 The description in this section is based on background information available on the ETA website at 

http://www.doleta.gov/programs/Wagner_Peyser.cfm and http://www.doleta.gov/programs/wprs.cfm (last accessed 

06.30.10) as well as TEGL 14-08. 
96

who are most in need of Reemployment Services to transition to new employment are targeted 

for RES. Some states have developed models to target RES at other groups of claimants, such as 

those most likely to find new employment quickly. Most states provide RES in One-Stop 

Centers and/or at state ES offices. 

1. RES and Reemployment and Eligibility Assessment Grants

Beyond RES, many states have received Reemployment and Eligibility Assessment 

(REA) grants from ETA. The program, which began in 2005 and has 34 active grantees in 2010, 

targets services at UI claimants based on a range of factors including benefit week, location, 

likelihood to exhaust, and others. 21 Claimants receiving REA services were originally required 

to ―attend one-on-one interviews in person, [including] a review of ongoing UI eligibility, 

provision of current labor market information, development of a work-search plan, and referral 

to Reemployment Services and/or training.‖22

The Employment and Training Administration expanded REA requirements in 2010. 

Targeted claimants are now required to participate in REA activities, including: developing a

reemployment plan (rather than work-search plan) and completing work search activities (e.g., 

accessing services at a One-Stop center, attending an orientation, registering with the state job 

bank). Thus, REA grants have stronger requirements for claimants than the RES requirements in 

the Recovery Act. REA and RES activities often aligned during the Recovery Act period and are

noted below as appropriate. Of the states visited, Florida, Montana, Nevada, and North Dakota 

 

21 The description in this section is based on the Jan. 2010 Reemployment and Eligibility Assessment 

webinar, available at http://www.workforce3one.org/view/5001002247077825152/info. (Last accessed 07.08.10).

22 Benus, Jacob, Eileen Poe-Yamagata, Ying Wang, and Etan Blass. Reemployment and Eligibility 

Assessment (REA) Study, FY2005 Initiative: Final Report. Impaq International: March 2008, p. i.
97

have REA grants that were described as linked with Recovery Act RES activities. Arizona noted 

that its REA grant was starting after the project site visit. 

2. Reemployment Services in the Recovery Act

In the Recovery Act, a total of $250 million was allocated for Reemployment Services 

activities. In Training and Employment Guidance Letter (TEGL) 14-08, ETA described 

expectations for RES. Allowable activities for RES funds include ―job search and other 

employment-related assistance services to UI claimants‖ (p. 19). States are also advised to 

explore technological improvements that might increase their capacity to serve UI claimants. 

Recommended RES strategies include increased collaboration between the ES, UI, and labor 

market information (LMI) offices at the state and local level. Another recommended strategy is 

to provide access to a full Recovery Act array of services including activities funded by WIA, 

such as job clubs, targeted job development, identification of transferrable skills, development of 

individualized reemployment plans, and soft skills training. ETA also advised states to institute 

or expand statistical worker profiling models to ―identify the most effective mix of interventions 

and services for different groups of UI claimants,‖ including claimants most likely to exhaust 

benefits (p. 21). Recommended strategies for upgrading information technology under the 

Recovery Act include updating the statistical profiling model; improving communication and 

data sharing between UI and the One-Stop system – particularly ES/RES staff; implementing 

occupational coding software; integrating LMI in the service delivery model; and upgrading 

infrastructure to improve efficiency. 
98

B. State Approach to Recovery Act RES Funding

The vast majority of states visited by researchers reported that they will obligate all 

Recovery Act RES funds by September 30, 2010. Local areas in Colorado, Florida, Michigan, 

and Texas have significant control over policy, operation, and funding decisions for multiple 

workforce programs, including Recovery Act RES programs, but these states do not anticipate 

any expenditure issues. Eight states reported that additional federal funding resources were used 

to supplement RES activities, including: UI Administrative funds (OH, WA, and WI); REA 

grants (FL, MT, ND and NV); WIA Rapid Response (OH); ES Administrative funds (WA); and 

TANF Recovery Act Emergency Contingency funds (TX). 

Several states (CO, OH, TX, and WA) have invested state general revenues to provide 

additional RES services, including training, for UI claimants. Colorado’s Enhanced Approved 

Training Program provides additional UI benefits to claimants in a regular state claim who are 

enrolled in approved training. Ohio has also directed $540,000 in state general revenue funds to 

support RES activities. In Texas, the state legislature appropriated $15 million from state 

general revenue funds, plus additional TANF Recovery Act Emergency Contingency Funds, for 

a Back-to-Work Initiative that places low-income UI claimants in subsidized employment with 

private sector employers. Washington State invested both Recovery Act WIA training funds and 

state-funded training initiatives to serve UI claimants, including the Training Benefits (TB) 

Program, Worker Retraining Fund, and Commissioner-Approved-Training. Participation in the 

TB program exempts UI claimants from work search and helps them connect more quickly with 

longer-term training to take advantage of current UI benefits extending up to 99 weeks. 

Wisconsin chose to target its Recovery Act Wagner-Peyser funds ($7.2 million) and UI 

Administrative funds ($3.6 million) at substantially expanding RES services for UI claimants, 
99

including fundamental changes in the way UI claimants are served by the One-Stop system. 

Wisconsin uses a profiling model to identify those most likely to exhaust and least likely to 

exhaust, and the state serves both groups. Prior to Recovery Act, there were about 10 RES 

weekly orientations statewide. Recovery Act funding has allowed the program to expand to 80 

sessions per week, with 1,300 claimants scheduled and 700-900 showing up. 

Some states have struggled to spend their Recovery Act funds. Louisiana did not 

immediately create a program to spend its RES funds, and ultimately the state had only six 

months to spend the $2 million (of a total of $32 million) in Recovery Act monies. (Similar 

delays in spending occurred for Louisiana’s other Wagner-Peyser and WIA Recovery Act

funds.) Arizona also had issues spending Recovery Act funds, given the state’s hiring freeze and 

other budget issues. Arizona plans to use the flexibility-for-expenditure correction to assign 

some activities funded prior to receipt of Recovery Act funds to its Recovery Act expenditures. 

In North Dakota, the RES program was slow to start, in part due to delayed temporary staff 

hiring, as well as RES and ES implementation delays due to workload issues. 

C. Claimants Served as a Result of Recovery Act RES Funding

More than half of the states visited reported that the share of claimants receiving RES had 

increased under the Recovery Act. Two states with active RES programs prior to the Recovery 

Act (PA and WI) reported that the proportion of UI claimants receiving RES increased with 

Recovery Act funds. In five others (AZ, CO, IL, MT, and ND), there was no active RES 

program prior to the Recovery Act. Each of those states developed a new RES program, 

resulting in more claimants connecting with the workforce system. In Louisiana, all UI 

claimants have been required to come into One-Stop Career Centers since 2007. In New York, 
100

the only claimants not required to participate in RES are those who are exempt from work search 

requirements; thus, the increasing unemployment in the state has led to increased RES. 

These findings are similar to results reported from the NASWA survey on RES: more 

than half of the states (16 of 28) surveyed indicated that the proportion of claimants receiving 

RES services in their state had increased.

The majority of states visited by researchers (12 of 16) use the WPRS system to 

statistically profile UI claimants for Reemployment Services. Eleven of these states (AZ, CO, 

MI, MT, NV, ND, PA, TX, VA, WA, and WI) use profiling to identify claimants most likely to 

exhaust benefits, while Illinois profiles those most likely to remain on the caseload for an 

extended period of time; Washington and Wisconsin identify those most likely to exhaust and 

those least likely to exhaust. 

Washington calls in approximately 60 percent of new claimants to the One-Stop Center 

during their first claim week, including those profiled as most likely and least likely to exhaust

benefits. Washington made one change to its WPRS system, extending the number of weeks a 

claimant is in the profiling pool from 5 weeks prior to the Recovery Act to 52 weeks in the 

extended UI benefit period. 

Many states take additional factors into account when determining which clients to call in 

for RES. Illinois also targets veterans and ex-offenders for enhanced services with Recovery Act

RES funds. In Nevada, the profiling list is prioritized based on veteran status, rapid response 

efforts, and other factors. In North Dakota, residents in only five counties are targeted for RES 

because the rural nature of the state would make it difficult for rural claimants to comply with inperson meeting requirements. Colorado profiles claimants most likely to exhaust and sends lists 

to local regions, which make decisions on whether or not to use the profiling list or to make RES 
101

mandatory (most do not require RES). Florida’s WPRS system currently allows each local area 

to draw two groups based on a state formula: one is assigned to group activities, while the other 

participates in one-on-one sessions. 

The profiling models in two states (AZ and TX) were updated since 2008 to address 

changing economic conditions, while others (FL, LA) are currently developing new models. 

Texas reevaluates its profiling model every two years. Though Louisiana has called in all UI 

claimants since 2007, state officials are exploring options to restart their profiling system. 

Louisiana State University is currently developing a new profiling model to identify those who 

need more intensive services.

State and local administrators in Washington indicated that they would like to update the 

profiling model to better identify those claimants who may need more intensive services. 

Washington’s Olympic Workforce Development Area includes a number of Navy shipyards and 

submarine facilities. However, the state’s profiling model does not call in recently separated

veterans. State ES administrators assigned to the local area use two strategies to make up for this 

feature. They partner with Veterans Employment and Training Services to provide a Vet 

Orientation/Job Club. They also partner with the Military Transition Assistance Program to 

provide information about One-Stop Centers and services to new veterans. In addition, the area 

supports a Disabled Veteran Outreach Specialist (DVOP) to provide services at transitional 

housing and VA facilities. 

Three states visited by researchers do not use a statistical profiling model to identify 

claimants for RES services. As indicated above, New York and Louisiana call in all claimants, 

and Ohio uses a characteristic screening that looks at six characteristics associated with 

exhausting UI benefits rather than a statistical profiling model. 
102

These findings are similar to findings reported in NASWA’s survey. Eighty percent of 

the surveyed states reported that the primary mechanism for targeting RES is a statistical model 

to identify UI claimants. One-third of the states indicated that RES Recovery Act funding would 

be used to update or modify the state’s profiling model.

D. Services and Service Delivery under the Recovery Act RES Program

1. Changes in RES Services Provided

Reemployment Services programs reflect the policies and workforce development 

philosophy of their state. Claimant experiences in RES vary widely in intensity, level of 

personal interaction, and opportunities to connect with other services and programs. Officials in 

most states visited by researchers remarked on the surge in claimants served and services 

provided as the recession deepened and programs changed (i.e., extended unemployment 

compensation benefits, TAA). 

In some states, there was also a change in policies and services, while in others policies 

and services remained similar to what had existed before the Recovery Act. In Florida and 

Virginia, the state increased the number of claimants called in for face-to-face services. While 

Nevada did not change the state’s mix of RES, they have noticed that claimants are taking more 

advantage of various services in the One-Stop Centers. Ohio used Recovery Act funding to 

support additional RES orientations and case managed services. Pennsylvania administrators 

indicated that the numbers of claimants receiving assessment and counseling services is up 60 to 

70 percent over pre-Recovery Act activities. 

The increase in the number of claimants receiving RES and the proportionate increase in 

the share that received assessment and counseling is confirmed by the NASWA survey of states. 
103

Almost two-thirds of the states (62 percent) responding to NASWA’s survey of workforce 

administrators reported that all UI claimants are referred to a One-Stop Career Center. Seventyfour percent of the surveyed states listed as their number one priority use for Recovery Act RES 

funds the expansion of services to UI claimants identified through the WPRS profiling system. 

The majority of workforce administrators reported that RES Recovery Act funds were being 

targeted at increasing the number and/or variety of job search assistance workshops (72%); 

providing assessment and career counseling services (56%); and/or making referrals to training 

(54%).

2. RES Service Delivery

States use a range of approaches for delivering RES. Five states visited by researchers 

(AZ, CO, IL, MT, and ND) did not have active RES programs prior to the Recovery Act. In 

Illinois, the state revived and strengthened an approach to RES it had used successfully under a 

2005 REA pilot program. Arizona’s RES program is new under the Recovery Act, and the state 

has opened three reemployment centers in counties with high unemployment. The state had 

previously operated a separate RES program in the 2005-2006 program year. Prior to the 

Recovery Act, Nevada was on the verge of eliminating its state-funded RES program due to 

funding constraints.. 

Virginia’s RES Recovery Act funds were used to establish 11 Re-Employ Virginia!

centers and nine UI Express offices to deal with the great increase in customers seeking UI and 

Reemployment Services. Texas opened three One-Stop Centers for RES, while Colorado opened 

a joint RES/TANF office with RES funds. In Wisconsin, RES activities are being offered at 

approximately 80 community locations across the state, in addition to services available in OneStop Centers. Recovery Act funding is also being used to open temporary ―overflow‖ centers 
104

across Ohio (including Cincinnati, Akron, and Cleveland) at which additional RES orientations 

and case management services are offered to claimants. 

Reemployment services in North Dakota are delivered primarily by phone. These 

services include job search planning, case management, and job search assistance. The RES 

program is under UI administration, and while claimants are referred by the UI office to the OneStop centers in order to attend the Interview Skills Workshops, visit the resource room, and 

explore training opportunities, their case managers are not on the staff of the One Stop. OneStop managers estimate that 55% of customers in the resource rooms are UI claimants.

E. Information Technology and Labor Market Information for RES through 

the Recovery Act

Eleven states visited by researchers reported that RES Recovery Act funds were used to 

improve or expand LMI and/or other information technology systems and infrastructure. Exhibit

V-1 below highlights each state’s investment. 
105

Exhibit V-1

Recovery Act RES Investments in Assessment, Information Technology,

and Labor Market Information

State Investment

Arizona

 Modified the AIRSNET system 

 Issued a RFP for new case management and reporting system

 Upgraded equipment in One-Stop Center resource rooms 

 Upgraded staff software and computer systems

Florida

 Purchased access to Help-Wanted Online (HWOL) for real-time job postings 

and Transferable Occupation Relationship Quotient (TORQ) for real-time LMI

 Developed new MIS/job matching system Employ Florida Marketplace for staff, 

employers, and customers. 

 Increased bandwidth and storage capacity in the state system

 Conducted a Job Vacancy/Hiring Needs Survey to collect information by 

industry and by workforce region to assist with reemployment analysis and job 

training needs

Illinois  Replacing Illinois SkillsNet with a system based on America’s Job Link Alliance

(AJLA)

Louisiana

 Received $2.3 million LMI Improvement Consortium Award in 2010 to upgrade 

LMI; project in planning phase

 Purchased laptop computers for temporary RES offices

Nevada

 Invested 16% of Recovery Act RES funds in IT

 Purchased identity card validation equipment

 Purchased 20,000 Layoff to Employment Action Planners

 Updating system to merge WPRS modeling for RES and REA programs

 Purchased video equipment and LCD monitors to improve efficiency of

communications with One-Stop Center customers 

New York

 Developed a Re-Employment Operating System (REOS), a scheduling and 

appointments tracking system that allows One-Stop staff to access information 

about UI customers on a daily basis

North Dakota

 State-developed enhancements to internet-based application for Reemployment 

Services, including appointment scheduling and other claimant tools

 Purchased access to Transferable Occupation Relationship Quotient (TORQ) to 

identify transferability between occupations for projects and target groups

 Improved database to store and analyze data from Dislocated Worker Survey 

 Supporting several LMI research projects

 Integrating ES and UI information technology to better serve UI claimants

Ohio

 Purchased Barriers to Employment Success Inventory (BESI), a web-based 

assessment used in job search planning

 Purchased laptops and other IT equipment to establish overflow RES centers 

Virginia  Improved and expanded WIA/Wagner-Peyser internet-based LMI/labor 

exchange/case management system to also include UI and TAA

Washington  Purchased KeyTrain

 Conducting an analysis of extended unemployment claimants 

Wisconsin  Purchased WorkKeys and KeyTrain

 Promoting WorkKeys National Career Readiness Certification 
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Illinois views its investment in information technology as a major accomplishment 

attributable solely to the infusion of Recovery Act dollars. The state is seeking a number of 

improvements in functionality, a national network for support and linkage, and reduced longterm operating costs. The biggest challenge they face is in getting expenditures for the new 

system approved through the state procurement system. Officials remain hopeful that they will 

be able to do so within the Recovery Act expenditure window. 

North Dakota and Washington are using Recovery Act funds to support LMI and other 

research projects. North Dakota has three projects; one involves longitudinal studies of workers 

affected by major layoff events. Another examines births and deaths of businesses in the state. 

A third explores the relationship between oil and gas prices and North Dakota-based 

employment in that industry. In Washington, the state is conducting analysis of extended 

unemployment claimants to identify what services might have helped exhaustees and what needs 

to be done in an extended claim status to keep individuals engaged in the system. 

In Wisconsin, the state is supporting attainment of the National Career Readiness 

Certification, which documents math, reading, and information location skills. State workforce 

agency staff and local programs have been promoting recognition of the certificate in the 

employer community.

Findings reported in NASWA’s survey also indicate that Recovery Act RES funds are 

being used for enhancements to assessment systems, information technology, and infrastructure. 

Sixty percent of state workforce administrators reported that Recovery Act RES funds were 

being used to integrate and improve communication and/or data transfer of UI claimant data 

between the UI information system and the One-Stop or Wagner-Peyser information system. 

Almost half (49%) were integrating LMI into strategic decision-making. 
107

Two states visited by researchers leveraged other funding to enhance Reemployment 

Services technology and labor market information systems. Colorado used non-RES 

discretionary funds to purchase WorkKeys for RES, WIA, and ES customers. Nevada used UI 

Administrative funds to upgrade interactive voice response phone systems to remind customers

of appointments and required activities, and follow-up on job referral results.

F. Staffing for Reemployment Services through the Recovery Act

Thirteen states visited by researchers reported that Recovery Act RES funds were used to 

hire staff (AZ, IL, LA, MT, NV, NY, ND, OH, TX, VA, WA, WI, and TX). The majority of 

these staff was hired as temporary employees, as Recovery Act funds for staffing end on, and 

payroll cannot be obligated after, September 30, 2010.

23

 Texas reported that all of its RES 

Recovery Act funds were used to hire 325 temporary employees providing services to UI 

claimants. Illinois added 53 intermittent staff to run Reemployment Services. Intermittent 

workers in Illinois are limited by a collective bargaining agreement to 1,500 hours per year, with 

the possibility to move into a permanent position if one should open up. Nevada hired both 

temporary and permanent RES staff using Recovery Act RES funds. Pennsylvania used UI 

Recovery Act funds to hire 50 permanent staff to provide RES in One-Stop centers. 

Several states indicated that staffing was a significant challenge due to state and local 

government hiring freezes, bureaucratic civil service systems, need for staff training, and 

temporary status positions. Arizona, for example, had to request critical needs waivers from the

state’s Department of Administration to spend Recovery Act funds on RES and other staff, 

 

23 RES services other than labor exchange services, e.g., case management, can be delivered through 

contracts. If the contract was in place by September 30, 2010, RES services provided through such contracts can be 

provided through June 30, 2011, when all RES funds must be expended.
108

adding about one month to the hiring process. Hiring temporary Recovery Act staff was also 

difficult in Washington given the state’s existing civil service system and ongoing hiring freeze. 

Washington officials further reported that there has been significant turnover in these temporary 

positions, some of which are no longer being refilled. Despite the challenges, states consistently 

reported that the staff members hired were high-quality candidates, and a number have been 

hired into permanent ES or other workforce positions. 

Findings from the site visits are also reflected in the findings from NASWA’s RES 

Survey. Twenty-seven of the surveyed states reported that Recovery Act RES funds were used 

to hire RES staff, the majority of which were hired on a temporary basis. In Minnesota, the state 

legislature prohibited the use of Recovery Act RES funds for anything other than staff for OneStop Centers. Five surveyed states (IA, MS, NE, OK, and WV) report that all RES staff hired 

under the Recovery Act will become permanent employees. 

G. Major RES Recovery Act Accomplishments

Many of the states visited by researchers (AZ, CO, FL, IL, OH, and WI) included RES 

activities among their major achievements under the Recovery Act. In Arizona, Recovery Act 

funds allowed the state to launch a new RES program across the state, including three dedicated 

reemployment centers in counties with significant unemployment. Colorado noted that its efforts 

under the Recovery Act have helped bring the UI and workforce systems closer together; staff on 

both sides is more knowledgeable about the other’s programs and more willing to collaborate. 

Florida officials also viewed their RES program as an accomplishment, particularly the new

emphasis on intensive staff-assisted services. Illinois successfully re-launched its RES program, 

last offered in 2005, with Recovery Act funding.
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In Ohio, with local workforce agencies facing budget cuts and hiring freezes, the 

additional Wagner-Peyser and RES Recovery Act funding enabled the state to bring on 100 

intermittent (temporary, full-time) staff, which have been deployed in One-Stops across the state 

to handle burgeoning numbers of customers. This additional funding also helped to expand the 

numbers of RES orientation sessions and one-on-one case management services available to UI 

claimants.

One of the biggest accomplishments in the Wisconsin workforce system that has resulted 

from the Recovery Act is that there has been a substantial expansion in RES services. WagnerPeyser Recovery Act funds ($7.2 million) and UI Recovery Act administrative funding ($3.6 

million) – for a total of nearly $11 million – were used to expand and fundamentally change the 

way in which UI claimants are served by the One-Stop system. State officials noted that the 

Recovery Act provided the resources needed to re-engineer and make fundamental changes to 

the way in which RES is provided for UI claimants. Wisconsin’s Career Pathways model, 

developed several years ago through a Joyce Foundation grant, is now being applied to UI 

claimants with Recovery Act RES funds.

These findings are echoed in NASWA’s survey. Almost half of the survey respondents

(46%) reported that their state’s RES program or the UI/Workforce system partnership in their 

state was an achievement of the Recovery Act implementation. Only 27% of those states, 

however, reported that their achievements in RES were sustainable. 

H. Next Steps and Post-Recovery Act Priorities

Recovery Act funding must be obligated by September 30, 2010 and fully spent by June 

30, 2011. A key issue explored during state site visits concerned what the states expect will 
110

happen to their RES programs when Recovery Act funds are fully spent. In ten of the 16 states 

visited (CO, FL, IL, NV, MT, ND, OH, TX, VA, and WI), administrators expect that RES 

programs and staffing will be cut. Eight of those indicated that cuts would likely be to preRecovery Act levels. Washington state was still analyzing its options at the time of the site visit 

(March 2010). 

North Dakota launched an Intensive Reemployment Project with Recovery Act funding 

in spring 2010. The project includes staff training and an updated web page. The state is also 

exploring contracted language translation services for reemployment participants. Enhancements 

currently under development will allow North Dakota RES staff to tailor services to claimants 

based on individual needs identified during the assessment process. 

In Pennsylvania and New York, RES programs will continue to operate after the

Recovery Act, as both states provide state funds for RES. New York’s contribution to the RES 

program is funded through UI employer taxes, while Pennsylvania’s contribution is funded 

through non-Recovery Act state funds. 

Arizona is the only state to indicate that it plans to sustain its new service and staffing 

levels beyond the Recovery Act period. Arizona has sufficient Wagner-Peyser formula funds to 

continue its RES program for at least one more year. Nevada also plans to continue its RES 

program though likely on a smaller scale once the Recovery Act funds expire. Nevada officials 

believe that ―the annual savings to Nevada's Trust Fund have demonstrated that assisting UI 

claimants with their reemployment efforts has been beneficial to both Nevada’s employer 

community and those claimants who need assistance finding employment.‖ 
111

CHAPTER VI

TRADE ADJUSTMENT ASSISTANCE PROGRAM

The Recovery Act substantially altered the nation’s Trade Adjustment Assistance (TAA) 

program by including the provisions of the Trade and Globalization Adjustment Assistance Act 

(TGAAA). Since the Trade Act of 1974, TAA has provided a range of benefits and employment 

services to workers who lose their jobs due to foreign competition or imports. The primary 

services are: 1) monthly cash benefits similar to, and coordinated with, UI; 2) access to 

employment and training services; and 3) other services and benefits including relocation 

assistance and a tax credit to cover costs of health insurance. Over the years, Congress has 

modified TAA several times, often in response to changing economic conditions.

24

The trade provisions in the TGAAA of the Recovery Act represent the latest reforms to 

TAA. In addition to some changes to the technical provisions governing determining eligibility 

and approving employers for TAA, several important programmatic changes were made that 

expanded eligibility and increased benefits:

 More employers are eligible for TAA. The employers in which workers are eligible for 

TAA was expanded to include service sector companies, public agencies, and workers 

whose jobs were off-shored to any country. Previously, eligibility was more targeted on 

specific trade-affected jobs losses, mainly in the manufacturing sector.

 Expanded reemployment services. There is more funding and emphasis on services to 

help workers become reemployed, including assessment, testing, counseling, and early 

employment assistance.

 More emphasis on training. The emphasis on and funding for job training was greatly 

expanded, and workers are given a longer time (26 weeks after layoff) to begin training. 

Workers in training can also receive TAA payments for a longer period: 136 weeks, and 

 

24 ETA issued new guidance for the TAA program in TEGL 22-08, dated May 15, 2009.
112

156 weeks if they are in remedial education. Training can be either full-time or parttime. Previously the training period was 104 weeks and 130 for remedial education, and 

the training supported by TAA had to be full-time.

 Higher subsidy for health insurance. The Health Coverage Tax Credit for workers was 

increased from 65% to 80% of their monthly insurance premium costs.

The new TAA provisions went into effect in May 2009. Workers and employers in 

companies whose TAA petitions are approved after May 17, 2009 are subject to the new rules. 

Firms and workers who qualified under the previous law continue to receive benefits under the 

old rules, with the exception of the expanded Health Coverage Tax Credit, which applies to all 

participants. Thus, states are required to manage the program under two sets of rules because 

some ongoing participants are subject to the old rules, while employers and workers approved

after May 17, 2009 fall under the new law.

This chapter synthesizes findings from site visits conducted in 16 states between 

December 2009 and June 2010, with respect to how the new TAA provisions have been 

implemented. The following issues related to the new provisions are covered in this chapter:

(1) administrative changes made to implement the new provisions; (2) changes in the number 

and types of employers and workers participating in TAA, (3) changes in the types of services 

and training individuals receive, and (3) accomplishments and challenges in implementing the 

TAA changes.

A. Administrative Changes for Implementing the TAA Provisions

A number of important changes in the TAA provisions required states to modify policies, 

procedures related to eligibility, services, and operations. Before discussing state 

implementation of the eligibility and services changes, two administrative issues of particular 
113

significance are briefly summarized, as state agencies devoted considerable time and resources to 

them in 2009 and 2010: (1) reprogramming information technology and data systems to track 

both the old program and the new program; and (2) ensuring compliance with the federal 

regulations requiring state merit system personnel to deliver TAA benefits and services.

1. Reprogramming Data Systems

In all the states visited, administrators described the extensive data system 

reprogramming required to meet new TAA program reporting and cost accounting regulations. 

A few of the states (all with very small programs) were still in the process of modifying systems, 

but the vast majority (80 percent) of states studied had completed necessary reprogramming by 

the time of the fieldwork. In fact, as noted below, successfully making the administrative data 

system changes for TAA was often mentioned by state workforce agency administrators as one 

of their greatest accomplishments in implementing all the changes required by the Recovery Act.

However, while the reprogramming has been successfully completed, administrators and 

staff spoke of the enormity of that task. In every state, administrators explained that the short 

timeframe allowed for implementing the TAA rules was compounded because federal reporting 

guidelines were not issued until July 2009, one month after the first enrollments began under the 

new rules, and only a few weeks before the first new quarterly reports were to be submitted to 

the federal government. The most burdensome TAA reporting and data systems changes 

mentioned are: 

 The need to report accrued training expenditures per participant per quarter is 

considered burdensome.

 Systems had to be reprogrammed to accurately record and track individuals enrolling 

and receiving services under the old rules and those subject to the new rules.

 Data systems for the dual programs have to be maintained for several years because 

workers under the old rules may still have a period of eligibility for training.
114

 The number of records and data fields in the data systems has greatly increased. For 

example, states must now report data on applicants as well as participants and exiters 

(under the old rules, only exiters were reported). In one state, this reportedly 

increased the number of individuals in each quarterly data file about 30-fold, from 

1,200 exiters to about 30,000 applicants, participants, and exiters. Similarly, states 

now have to track cumulative trade readjustment allowances (TRA) payments over 

time, rather than just the payment amounts at each point in time. 

Although the reprogramming has been accomplished, some of the programmatic changes 

that were the subject of that reprogramming may continue to cause operational problems, as 

noted more in the following sections. For example, administrators and staff noted the challenges 

in having to track and report on two programs; explain two sets of rules to staff, employers and 

workers; and reconcile costs associated with the old and new rules. 

2. Merit Staff Rule

The second TAA administrative issue that is significant in some states concerns the 

recent ETA regulation requiring that personnel providing TAA benefits and services must be 

state staff covered by formal merit system policies. In the explanations and guidelines issued by 

ETA, federal officials explain that this is not really a new requirement, but a reinstatement of the 

long-standing rule in effect between 1975 and 2005, when the requirement was lifted. The 

rationale for reinstating the rule is that staff is representing the federal government in 

determination of eligibility for cash benefits and related services (as with UI) and that ―the use of 

[these] public funds require that decisions be made in the best interest of the public and of the 

population to be served. By requiring merit staffing, the Department seeks to ensure that benefit 
115

decisions and services are provided in the most consistent, efficient, accountable, and transparent 

way.‖

25

Two exceptions to the merit staff rule are allowed. Three states already operate 

demonstrations approved by USDOL which allow local merit staff to carry out Wagner-Peyser 

activities (Colorado, Massachusetts, and Michigan) and that authority will also apply to TAA. A 

second exception is a bit more nuanced, namely that staff in partner agencies and programs, 

including WIA, may provide services to TAA participants, provided there are appropriately 

integrated state policies and procedures in One-Stop Career Centers.

In the states included in this study, administrators are well aware of the reinstatement of 

the merit staff rule, and in most states there is little if any concern about the rule. Two states 

have the Wagner-Peyser merit staff waiver (Colorado and Michigan) and, in nearly all the other 

states, either state personnel already carry out TAA activities or the state has policies in place 

that will essentially meet the ETA allowable variation on the rule because of cross-program 

services.

Some states are restructuring their merit staffing to better integrate services and allocate 

costs across programs, which would meet the federal regulations. In three states visited, though, 

(Illinois, Louisiana, and Texas) administrators are still in the process of revising state rules and 

restructuring systems to come into compliance, since in all three states many local office staff

members who previously carried out some TAA activities were not state merit employees. 

In Texas, over 90 percent of staff providing TAA services before the new law was nonmerit. State personnel handle all eligibility determinations, TRA payments, and communicate 

 

25 U.S. Department of Labor, Employment and Training Administration, ―Questions & Answers - Trade 

Adjustment Assistance Final Rule on Merit Staffing of State Administration and Allocation of Training Funds to 

States,‖ https://www.dol.gov/regulations/taa-qa.htm(accessed July 1, 2010).
116

with employers about potentially eligible workers. However, local WIBs are responsible for 

service delivery as with WIA and other programs. A comprehensive state-local planning process 

is being followed to examine in detail whether WIA and TAA customer processing needs to be 

more integrated than it already is, and whether any other service delivery changes will be needed 

to comply by December 15, 2010, the implementation date set by ETA. 

In Illinois, the state employment security agency manages TRA benefits and LWIBs 

administer TAA benefits and services, except in Chicago where the LWIB contracts out TAA to 

a nonprofit organization. State and local administrators are continuing to consider policy and 

service delivery changes that might be required to meet the merit staff rule. 

In Louisiana, the state has established regional trade coordinators that work with local 

WIBs and One-Stops, and all applications are certified by these merit staff. In these three states, 

no final policies have been made as they await final ETA guidance, and there is continuing 

concern about how the merit staff rule will affect the TAA programs.

B. Changes in Employers and Workers in TAA

Perhaps the most important change introduced in the new law is the substantial expansion 

of eligibility for TAA, for both employers and workers. At the time of the site visits, the main 

message heard in the field was that while the numbers of employer petitions for TAA and the 

number of workers enrolled may be increasing (in some cases, substantially increasing), it seems 

that most of the increases are due to the recession, and only minimally due to the new eligibility 

provisions. There are some notable exceptions, as discussed below, and it is important to 

remember that the new changes had been in effect only a few months, so the early experiences 

may not necessarily reflect the long-term effects of the new provisions. There is reason to 
117

believe that future activity may increase, at least in part because ETA is now clearing the 

backlog of petition applications that had accumulated over the past year.

1. Numbers of Employers and Workers in TAA

While the numbers of employer petitions and TAA worker enrollments have generally 

increased, there is great variation across states. It is somewhat difficult to compare participation 

trends over time and across states in part because federal reporting rules have changed. For 

example, before the new law, states had to report to ETA the number of individuals who exit the 

TAA program, but not applications and enrollments. Some states in this field study were able to 

provide more detailed information, though, which, when combined with the statistics in the 

federal reports, suggests the following general patterns. More than half the states visited have 

experienced at least a 50 percent increase in petitions and active participant enrolments, but there 

is considerable variation across states—see Exhibit VI-1. Included in the group of states that has 

experienced the most substantial increases are four states that report their participants have more 

than doubled since 2007 (Florida, Ohio, Texas, and Virginia), and seven states where petitions 

have more than doubled (Florida, Michigan, Ohio, Virginia, and Wisconsin and two states with 

smaller programs, Montana and North Dakota). To give a sense of the scale, in Ohio, petitions 

increased from about 85 in 2007 to over 300 between May 2009 and May 2010, when several 

thousand individuals were reportedly active in TAA (including 1,700 from one GM plant alone). 

In Texas, the number of TAA participants being served increased from about 3,000 to over 

6,500. In Montana, a small state, the number of petitions rose from 6 in 2007 to 30 in the first 

twelve months of the new program; while in two other small programs (Nevada and Arizona) 

there has been little or no change in activity.
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Exhibit VI-1: Percent of Study States Visited Where Administrators Reported Increased 

TAA Activity in the First Year After Enactment of the Recovery Act

Reported Change Compared to 

Prior Years

Number of TAA 

Petitions

Number of TAA 

Participants Enrolled

Small or no change (< 10%) 10% of states 10% of states

Moderate increase (~10%-50%) 40% of states 40% of states

Substantial increase (~50%-200%) 50% of states 50% of states

State and local administrators sense these increases in petitions and enrollments primarily 

reflect the continuing economic recession, and little of the increases can yet be attributed to the 

changes in the law. But they also note that this could change in the coming year for various 

reasons. Administrators in several large states, including New York, expect to see the petition 

numbers increase in 2010. Administrators in nearly all states also explained that once ETA 

clears the current backlog of petitions, the number certified will also increase, as will the number 

of workers from the certified employers. (At the time of the fieldwork, state officials indicated 

on average it was taking 9-10 months for a decision on petitions.)

Part of the increase in TAA in some states, however, also reflects new concentrated 

efforts to market the new rules to employers. A few states are developing marketing and public 

information campaigns to reach out to potentially eligible workers and employers. Florida, for 

example uses its data system to generate phone calls to specific employers [see box].

State TAA Outreach Effort: Florida Marketing to Firms

To build its capacity to reach more TAA-eligible firms, the state purchased a 

module from Geo Solutions, the vendor that developed the Employ Florida 

Marketplace (EFM) integrated Labor Market Information and Job Matching 

program. The module generates lists for biweekly calls to firms that may be 

likely to petition or that already have petitioned, to make them aware of TAA 

services for firms and workers.
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2. Types of Employers and Workers

There is some indication that part of the increase may more directly reflect the changes in 

the statute, particularly the expansion of sectors eligible for TAA, which may be changing the 

mix of employers and workers in TAA. In general, there is little evidence in the first year of 

implementation that the increases in petitions are disproportionately from employers in the newly 

eligible sectors. However, in some states, there is an indication that service sector petitions and 

workers in those sectors are increasing in the TAA program. In Florida, for example, which has 

experienced a very large increase in TAA activity, administrators report that about one-third of 

TAA participants in 2010 are from the new sectors. In Wisconsin, there are 120 new petitions 

from service firms, and about 15 percent of all certifications are now from the services sector. In 

Illinois, nearly 2,000 service sector workers from 42 certified locations are receiving TAA 

benefits and services. And in Montana, where past activity came mainly from timber, 

transportation, and related industries, the expanded eligibility to service sector firms, along with 

the recession, has led to many more petitions and interest from firms than in the past, and an 

increase in the number of workers being actively served (700 in Kalispell alone). In contrast, in 

Pennsylvania, administrators indicate there are no service sector petitions yet, but state officials 

expect there will be and also note that some firms that have filed petitions may be mixed-sector 

(e.g., pharmaceutical companies). Officials in several other states noted that there are reports of 

some firms ―switching‖ their sector of record specifically to qualify for TAA. In any case, it 

may be too soon to know the effect of the expanded sector eligibility on petitions, but there is 

some evidence in some (but not all) states that service sector petitions are increasing.

In terms of the characteristics of workers in TAA, there is less evidence that this has 

changed due to the new law. A number of administrators report that the education level of TAA 
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enrollees is somewhat higher than in the past in states where service sector and government 

petitions have been certified. But in most states, administrators and staff report that the types of 

workers have not changed since the new TAA rules went into effect.

C. Changes in TAA Services

In many states, it is still too soon to determine precisely how services and training have 

changed under the new rules. However, there are some emerging patterns in the first year of 

implementation regarding two categories of services: (1) more counseling, assessment, and case 

management; and (2) more emphasis on training.

1. Counseling, Assessment, and Case Management

Given the emphasis on counseling and assessment and the legislative change that allows 

TAA funds to be used for these services, it is not surprising that in nearly every state visited, 

there is indeed more focus on these activities. There is also more emphasis on case management 

as required, but some ongoing confusion about what exactly counts as case management for 

TAA cost accounting purposes. Many states are reporting that they are starting the counseling 

and assessment process earlier, and a number are using new assessment and case management 

software technology or expanding what they already had for other programs to include TAA.

The new law also emphasizes counseling and assessment services up front to ―threatened 

workers.‖ Some states, like Illinois, are actively seeking lists of such workers to notify them of 

the benefits of the TAA program, but staff explains that such efforts are very challenging 

because it is difficult to get an accurate list of these workers. The plan is that they will be 

engaged sooner and provided with one of the several case management activities required in 
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TAA, including testing, assessment, developing an Individual Employment Plan, and 

employment counseling.

Even in states where there is little or no increase in the number receiving assessment and 

counseling, there is evidence that the new TAA changes have had the indirect effect of 

increasing overall counseling and assessment for the entire workforce system. This has occurred 

in large part because many states had been using other sources of funds (mainly WIA-Dislocated 

Worker and Wagner-Peyser funds) to pay for counseling and assessment, case management, and 

support services for TAA participants. Many staff and administrators explained that one of the 

main reasons they co-enrolled individuals into TAA and WIA-Dislocated Worker was to provide 

the TAA clients with counseling and assessment. The new rules mean that agencies can now 

distribute the costs across programs for individuals enrolled in multiple programs to more 

accurately reflect the costs of services. And the end result is that a larger number of individuals 

in total (across programs) are receiving testing, assessment, and counseling. [See box]

Administrators in several states asserted the new TAA rules have had a secondary effect 

of allowing the state agency to streamline and improve service delivery systems, such as 

assessment and case management, but also to improve their administrative and technology 

Counseling, Assessment, and Case Management in TAA: 

Perspective of One Administrator

―We always provided case management and related services [to 

TAA clients], and our standard expectation is that folks are coenrolled as Dislocated Workers. It’s great that funding is now set 

aside for case management in TAA...this has been a big change. We 

didn’t want to continue to rob Dislocated Workers to pay for case 

management for TAA clients. It’s allowed us to do a better job for 

TAA and to serve more Dislocated Workers.‖ 
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resources to support service delivery. This includes, for example, expanding the use of testing 

and assessment software and allowing the enhancements to integrated data systems that had 

already been underway but had not included TAA:

 Wisconsin enhanced its TAA intake and assessment process, including expanding its use 

of WorkKeys and KeyTrain for TAA participants, which leads to National Career 

Readiness Certification.

 Virginia improved its internet-based Labor Market Information/case management system 

already used in Wagner-Peyser and WIA programs to also include TAA and UI.

A few state administrators noted that even with the new TAA rules that allow the 

program funds to cover assessment and case management, the total amount of funding for these 

services across all programs is inadequate. One also suggested that ETA might revise the current 

allocation of funds for case management ($350,000 to each state) more equitably since some 

states have very high program levels and others have minimal programs. The interest in case 

management is especially high in nearly all states visited, although several administrators and 

staff said there is still confusion about what exactly can be counted as case management for 

reporting purposes. Given the expanding interest, states are looking for guidance in this area.

2. Training

In the states included in this study, administrators report that there has been an increase in 

the number of TAA participants entering training, including more who are in training of six 

months or longer. However, administrators are careful to note that most of the increase is 

consistent with the fact that the entire workforce investment system, including WIA, has also 

increased the emphasis on training, and that customer interest in training tends to increase during 

periods of high unemployment. They caution that it is not clear if the increase in training in 
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TAA (where it exists) is due to the changes in TAA (e.g., allowing longer term training and 

allowing a longer time to initiate training). 

There are a few issues related to training in TAA that are important to note. First, there is 

considerable variation in the types of training providers TAA participants can access to enroll in 

training, and in the maximum tuition that will be allowed. The new law not only allows a longer 

period of training, the training providers and institutions do not have to be limited to those on the 

state’s Eligible Training Provider List (ETPL), and there is no specific cap on the cost of training 

per participant. States have discretion, which leads to variation across the study sites. In some 

states, such as Arizona and Florida, TAA and WIA training use the ETPL established for WIA, 

usually allowing individuals to request to enroll in programs of providers not on the list. Most 

states visited, though, including Nevada, Texas, and Washington, do not limit TAA training to 

the ETPL. There is also variation in terms of the amount of tuition that can be covered by TAA; 

Washington State has a cap of $22,000-$25,000 (it was $12,000-$16,000 under the old rules), 

while Florida has no cap. 

Second, the delay in processing petition decisions at the national level is having an 

unintended and negative effect on training. The new rules allow and encourage programs to 

begin to work with participants as soon as possible and to encourage them to enroll in training. 

The new rules also allow TAA customers to obtain longer-term training, and they have a longer 

period of time after they are laid off to begin that training. However, during the transition to the 

new rules, approval of the petitions at the national office is taking several months (it was taking 

as long as 12 months, but by mid-2010 was averaging about 7 months). This means that 

individuals who exhaust UI benefits and then (once certified) begin receiving TRA and perhaps 

have begun long-term training, might exhaust their combined UI and TRA weeks of benefits 
124

before they complete their training programs. No cases have yet been in this situation, but 

several administrators and staff noted their concerns.

A third issue concerns the interest in training. While the emphasis and priority on 

training, especially long-term training, has increased in about two-thirds of the states visited, 

there is little evidence that there have been any changes in the level or length of training by TAA 

participants. In some of these states, the numbers in training have increased, but staff feels that 

parallels the total number in TAA, not an increase in the percentage that enter training. There is 

also no evidence that the duration of training they are entering is longer than in the past. In 

general, the length of training is about the same as before the TAA rule changes (averaging 6 

months to 2 years). Staff suggests this is partly because of continuing low interest in long-term 

training. Some states are beginning to ramp up on-the-job training (OJT) for TAA, and there 

may be more interest in this option. Again, it is too soon to know whether the new rules will 

result in a higher proportion of TAA participants entering long-term training.

In the other third of states visited, there is some evidence that training is increasing and 

that of those who are going into training, more are choosing long-term training. Pennsylvania, 

for example, has over 4,000 in training, and two-thirds of them are in long-term programs taking 

Unintended Effects on Training of Delays in Approving Petitions: 

State Concern

―[We are worried that] the delay in petition approvals, along with the natural 

inclination of some trade-affected workers to delay their decisions to enter 

training, will mean that some workers will run out of TRA benefits before they 

finish the training. They can run through their UI, which counts against their 

TRA weeks while their company’s petition is being approved, and then they 

might delay starting a program. The result could be that a TAA participant 

might run out of TRA also and still have 6 months or a year to go in their 

program.
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over 6 months to complete. In Montana, officials indicate that most TAA participants are 

entering training, and that over two-thirds of them are in long-term training, with many 

―...taking advantage of what they perceive to be a once-in-a-lifetime opportunity.‖ The story is 

similar in Florida, where state and local administrators indicate that training is increasing and 

most in training are in long-term programs (9-24 months usually). And the pattern is generally 

similar in Washington State, where officials further explain though that there is great variation 

by region (since LWIBs have discretion on many issues) and by type of worker. Workers in 

mining and timber, for example, are less interested in pursuing training or education than 

workers from services sectors. 

Thus, it is still too soon to know the exact effect of the new law on training and long-term 

training. In most states there is no major difference in training rates or types of training than in 

the past, but in a number of states there is a clear trend toward more training. And when there is 

more training, the tendency is for individuals to enroll in longer-term training than in the past. 

The trend will be clearer in the next two to three years as the new rules are fully implemented.

D. Accomplishments and Challenges

Both the number of employers petitioning for TAA and the number of workers enrolled 

in TAA have increased considerably among the study states. In about half the states, the activity 

levels are up substantially, and in several states the numbers of petitions and participants have 

more than doubled over the past two years. State and local administrators and staff feel that most 

of the increase is due to the economic recession and a small part, in some states, may reflect the 

changes introduced in the 2009 legislative amendments. In general, state administrators feel that 
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their greatest accomplishment has been handling the large workload increase in TAA, as in other 

workforce investment programs, much of which they attribute to the recession.

They also point out that implementing the TAA changes in the law over a very short 

period of time was a major accomplishment. The President signed the law in February 2009, and 

the first workers became eligible in May. The major effort for state agencies was to reprogram 

the data systems to accommodate the new changes for both determining eligibility and providing 

services and for complying with federal program and cost accounting reporting. This was a huge 

effort, made more challenging because states did not receive regulations and guidelines until 

after the first individuals and employers became eligible under the new rules. And both the data 

systems and reporting procedures had to be revamped to allow the parallel technology to be 

maintained and used for several years into the future. In nearly every state visited, the 

reprogramming has been accomplished; a few states with small programs are still refining their 

systems.

Despite the monumental reprogramming achievements, though, the same changes that 

had to be programmed also represent the most significant challenges state continue to face in 

implementing the new TAA law. Two separate programs have to be maintained in tandem—one 

for those subject to the new law (those who entered the program after May 2009) and one for 

those subject to the old law, many of whom will be eligible to continue with services for at least 

two or three more years. There continues to be uncertainty about some issues that affect the 

programs, including how to define and allocate case management costs, alternative structures 

that can meet the merit staff rule, and reaching the potential pool of employers and workers 

eligible for TAA to ensure they are aware of the services for which they are eligible. 
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Administrators in a number of states indicated they were awaiting final guidelines from ETA 

before formalizing new policies and operational procedures.
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CHAPTER VII

OTHER RELATED INITIATIVES: LABOR MARKET INFORMATION (LMI), 

GREEN JOBS, AND SUBSIDIZED EMPLOYMENT

The Recovery Act affected many aspects of the workforce investment system. This 

section summarizes provisions that were separate from but interacted with the Act’s provisions 

for WIA, Wagner-Peyser, TAA, and UI programs in at least some of the states included in this 

study. The three areas discussed here are: (1) labor market information (LMI) improvements, 

(2) Green Jobs initiatives, and (3) implementation of the subsidized employment programs 

authorized under the TANF Emergency Fund. The Recovery Act included provisions related to 

all three, and this chapter summarizes the main issues involved in these three areas in relation to 

the primary workforce development programs in the states included in the site visits and 

discussed in previous chapters.

A. Labor Market Information Systems Improvements

The Recovery Act, along with funding for the formula programs, provided either new 

resources or new motivation to improve, expand, or upgrade automated labor market information 

systems in many of the study states. A major motivation for the Recovery Act initiatives around 

LMI was to encourage states to upgrade their LMI systems and improve their overall workforce 

investment systems to better incorporate emerging or expanding green jobs occupations and 

industries related to renewable energy and energy efficiency. State Labor Market Improvement 

Grants funded by the Recovery Act were awarded to individual states and consortia of states to 

enhance and upgrade their LMI infrastructure in various ways as well as to improve the 

technology. Nearly all states included in this study received LMI grant funding in 2009. In 
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addition to the Recovery Act LMI grants, most states have been improving their automated 

information systems used for program management, job matching, and case management, using 

regular annual LMI grants as well as WIA and Wagner-Peyser funds.

Based on discussions with administrators and staff in the study states, several points can 

be made about green jobs efforts in the Recovery Act period. First, the 2009 LMI grants are 

being primarily used, as intended, to support research and analysis necessary for defining green 

jobs occupations, establishing a baseline number of current green jobs in the state, and upgrading 

forecasting models to project future demand for workers in green jobs. About one-third of the 

state workforce development agencies of the states in the sample are sponsoring surveys of green 

jobs, engaging in statistical analysis to develop or upgrade forecasting models, and/or conducting 

other research to define occupations and skills needed to integrate information on these jobs into 

existing LMI systems (Colorado, Illinois, Michigan, Montana, Ohio, Pennsylvania, and 

Washington). Michigan, for example, has conducted green jobs surveys, developed the 

Michigan Green Jobs Report, and is sponsoring a major conference on emerging green jobs and 

skills required of workers in the jobs. Louisiana and Illinois intend to conduct research and 

analysis to improve their LMI systems, including new forecasting analysis for Louisiana done by 

Louisiana State University researchers. However, at the time of the state visits, these efforts 

were still in the planning stages. Other states, such as Arizona, had intended to carry out 

research and analysis, but because of serious resource constraints including hiring freezes and an 

inability to obtain legislative approval, those plans have been delayed or placed on hold. 

Second, many states already had fairly sophisticated LMI systems due to the high federal 

and state investment in this area over the past decades (e.g. Texas, Florida, Wisconsin, Ohio, 

New York, Michigan). In general, administrators in many of these states indicated that little if 
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any Recovery Act or LMI grant funds are being used to improve the hardware or technology of 

those systems; in fact, Texas and Wisconsin are not receiving any funds under the 2009 LMI 

grants.

However, in several of these advanced LMI states, there are some notable examples of 

IT enhancements related to program services and management systems that are being made with 

Recovery Act funds or had been planned prior to the Recovery Act. In several states, 

improvements are now being accelerated because available resources have allowed investments 

in one-time upgrades, particularly for improving two-way job matching and integrating more 

programs into a single system. Some examples of these efforts are:

 Washington State is integrating green jobs components into its SKIES system, 

upgrading the link to UI systems, and upgrading data access and quality control 

procedures to allow businesses expanded job matching queries.

 Virginia has integrated TAA and UI into the Virginia Labor Market Connection 

web-based LMI/job matching/case management system already used for WIA and 

Wagner-Peyser.

 Wisconsin continues its ongoing improvements to link green jobs information 

with their LMI system and refine the online resume module for job matching.

 Florida, which also has an integrated LMI/case management system, used 

Recovery Act funds to increase its available bandwidth and storage capacity, 

refine two-way job matching, and integrate real-time LMI tools line staff can use 

in counseling customers.

 New York State received funds under three LMI Improvement Grants, 

participating in two multi-state consortia to develop forecasting methodologies 

and real-time supply and demand modules for green jobs and the skills required 

for the jobs. 

Several staff and administrators noted that such upgrades in the LMI systems are 

especially important now because many more higher-skilled customers are unemployed and 

seeking employment services than in the past. Having more sophisticated LMI tools allows the 

workforce investment system to better serve these customers.
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Along with the LMI improvements being made in nearly every state, several 

administrators discussed constraints that have affected some planned LMI-related initiatives. For 

example, a state hiring freeze in Arizona led the state workforce agency to revise its plan for 

conducting in-house most of the analysis to improve projections. And North Dakota had been 

notified by ETA that the state could receive an LMI green jobs grant, but the legislature voted 

not to accept the grant.

In summary, nearly every state in this study has made improvements in LMI systems to 

support services in workforce investment programs, such as career counseling, occupational 

assessment, case management, and job matching. And most states report making substantial 

progress in defining and incorporating occupational information on green jobs into their LMI 

systems. 

B. Green Jobs Initiatives

The national priority on energy efficiency and renewable energy sectors was reflected in 

the Recovery Act provisions that specifically authorized funds to develop the green jobs 

workforce. Over the past few years, the federal government has placed a high priority on 

increasing the number of workers who have the skills needed for various high demand 

occupations and industries, and green jobs are among the highest priority for industry-focused 

training. A number of ETA grant programs have been established to fund the development and 

implementation of skills training for jobs in these emerging and growing sectors. The main grant 

programs authorized in the Recovery Act that can be used to develop or expand green jobs 

training include:
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 State Energy Sector Partnership and Training Grants($190 million in 2010) for state 

workforce boards to establish partnerships to develop workforce strategies targeted to 

energy efficiency and renewable energy industries.

 Energy Training Partnership Grants ($100 million in 2009) for cross-agency 

partnerships to develop training and employment programs for individuals affected by the 

broader energy and economic situation, including workers formerly in the automotive 

sector.

 Green Capacity Building Grants ($5 million in 2009) to existing USDOL grantees for 

local green jobs training programs.

 Pathways Out of Poverty Grants ($150 million in 2009) for local programs and local 

affiliates of national organizations to expand training and employment services for-low 

income individuals to move into expanding energy efficiency and renewable energy jobs.

In all but one of the 16 study states, some funding was received under one or more of 

these grants programs (the exception is North Dakota). Over half of the state workforce agencies 

visited had received State Energy Sector Partnership and Training Grants, and in most states, 

some local WIBs or community-based organizations received Green Capacity Building or 

Pathways grants. Several national grantees also served areas in some of the study states, for 

example, grants to industry organizations such as the International Training Institute for Sheet 

Metal and Air Conditioning, and nonprofit entities with local affiliates like Goodwill Industries 

and SER-Jobs for Progress. Several states are using the LMI and Energy grants to develop or 

expand comprehensive integrated state energy workforce strategies (Arizona, Illinois, Nevada, 

and Florida).

A number of states are implementing major green jobs initiatives using a variety of 

federal grants and, in many places, WIA and state funds. It was not possible to visit every green 

jobs training program in the study states, and in some cases the programs were just beginning at 

the time of the fieldwork. However, interviews with state and local administrators and staff 

indicate that at least half of the states in this study have major statewide initiatives related to the 
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green jobs economy, and the Recovery Act funds are being leveraged to support and expand 

those initiatives. A few examples that illustrate how Recovery Act funds are being used for 

different green jobs efforts include the following:

 Montana is using federal Energy Training Partnership and LMI grants to expand the 

state's green economy efforts, particularly related to renewable energy. The effort 

started before the Recovery Act with WIRED grants and state funds. Montana was 

successful in its application for the Energy Training Partnership discretionary grant, 

which was developed with state Joint Apprenticeship and Training Committees 

representing 10 trades and will be used to prepare workers for green jobs in 

renewable energy and energy efficiency. Montana also led the consortium of six 

other western states in applying for a labor market information improvement grant 

that will be used to develop models to capture employer demand for renewable 

energy jobs and skills required.

 Wisconsin has set green jobs training as a priority for training under WIA for the 

Adult, Dislocated Worker, and Youth programs. State Energy Grant funds along with 

WIA funds and Governor’s WIA discretionary funds are being used, for example, to 

expand apprenticeship and pre-apprenticeship training programs as part of a statewide 

strategy established by the Governor.

 Ohio has a statewide focus on green jobs, particularly for youth, and is using the LMI 

and State Energy Grants to promote an integrated strategy, including establishing the 

Recovery Conservation Corps. The state agency is also encouraging and supporting 

collaborations between local WIBs and Energy Partnership Grants in the state, 

including several industry training and apprenticeship programs for youth and 

dislocated workers.

 Colorado is leveraging several funding sources for green jobs training as part of the 

state’s high priority New Energy Economy initiative (e.g., WIA Adult, Youth, and 

Dislocated Worker, State Energy Grant, and Governor’s discretionary funds). 

Recovery Act funds have been used to hire a state green jobs coordinator to facilitate 

cross-program partnerships and initiatives (e.g., workforce development, registered 

apprenticeship, economic development, and human services). Funds from several 

federal Recovery Act funds from ETA and the Department of Energy are being used 

to implement special projects (the Green Careers for Coloradans and the Denver 

Green Jobs Initiative).

 Pennsylvania is using various USDOL and Department of Energy grants plus state 

funds to strengthen its green jobs strategy begun several years earlier. The focus is on 

improving LMI, integrating green jobs information into case management, counseling 

with new tools, and establishing the Pennsylvania Center for Green Careers to 

coordinate research, planning, and training programs.
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 Texas has an increasing emphasis on green jobs, particularly in the area of wind 

power, and the state workforce agency is supporting several industry training 

partnerships with Governor’s discretionary funds as well as Recovery Act funds and 

grants.

 New York has placed very high priority on supporting the state’s green economy, 

making green jobs one of the three top sectoral priorities. There are at least 12 

Pathways, Energy Capacity, and Energy Training Partnership grants in the state, in 

which the state workforce agency collaborates and leads multi-agency state 

initiatives. Investments in green jobs training are occurring across agencies (labor, 

human services, transportation, and education). These efforts include new green jobs 

websites and cross-departmental collaborative grant programs, which are funding 

local programs such as the Green Jobs Corps and providing training and subsidized 

employment in green industries (using TANF Emergency funding).

 Michigan’s prior Green Jobs priorities are being expanded by using the new LMI data 

for planning and also using Recovery Act funds for new initiatives such as the Energy 

Conservation Apprenticeship Readiness program for minorities, women, and the 

disadvantaged.

Some state staff raised concerns about the push for green jobs to lift the state’s economy 

out of the downturn. While many believe it can be a viable long-term strategy, they do not see 

efforts to train and place customers in green jobs as an immediate solution to unemployment 

because there are few available jobs. Some state staff also mentioned the challenge of defining 

Recovery Act Funded Green Jobs Project: Michigan’s Energy Conservation 

Apprenticeship Readiness Program (ECAR)

ECAR is an effort to prepare women, minorities, and economically disadvantaged 

individuals for apprenticeship positions, weatherization projects, and other green 

construction jobs. ECAR builds off the Road Construction Apprenticeship Readiness 

(RCAR) Program, which was an earlier pre-apprenticeship program providing tuitionpaid fast-track customized training in job readiness skills, applied math, computer skills, 

blueprint reading, workplace safety, and construction trades. In addition to the 240-hour 

RCAR Program curriculum, the ECAR program has a 32-hour energy conservation 

awareness component that includes: training on lead, asbestos, and confined space 

awareness; mold remediation and safe working practices; principles of thermal 

insulation, geo-thermal energy, and solar energy; and principles of green construction. 

ECAR and RCAR both also offer supportive services, job placement assistance, and 

completion certificates. 
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green jobs, as what industries and occupations should be included in the definition can become a 

political issue. 

Based on the state visits, it seems clear that green jobs are a high priority in nearly every 

state visited and that the Recovery Act funds, which include special grants, WIA supplemental 

funds, and Recovery Act funds from other agencies (e.g., Energy and HHS) are being used 

strategically to both develop statewide approaches and, more commonly, to enhance and expand 

state green jobs initiatives that had begun before the recession. In addition, many of the projects 

and initiatives are focusing on providing training and apprenticeship opportunities for dislocated 

workers (especially from the automotive and steel sectors), minorities, women (in nontraditional 

occupations) and low-income youth. 

C. Subsidized Employment through the TANF Emergency Fund

The workforce investment system and the work programs associated with TANF have 

close linkages in some, but not all states. Recovery Act provisions for TANF, therefore, can also 

affect workforce agencies and local programs. One of the most significant Recovery Act 

provisions under TANF is the TANF Emergency Fund (EF). The scale of the program and its 

interaction with the workforce investment systems and the populations it may reach make it a 

central part of the story of the implementation of the Recovery Act. States are allowed to draw 

down up to 50 percent of the TANF block grant amount in Emergency Funds that can be used for 

three purposes: (1) to cover additional TANF benefit costs, (2) for one-time non-recurrent 

benefits, and (3) for subsidized employment. The subsidies are not limited to TANF recipients, 

but can be used to subsidize jobs for low-income parents with children under 18, with the states 

determining monetary eligibility requirements. Most states are using the same eligibility 
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requirements used for TANF services (aside from cash benefits), which is usually 200 percent or 

225 percent of poverty. 

Subsidized employment has been an allowable expenditure in TANF, but it was not a 

high priority at the federal or state levels because subsidized employment programs are usually 

cost-prohibitive. Thus, the Recovery Act guidelines and the amount of funds potentially 

available to states for subsidized employment created considerable interest. After enactment of 

the Recovery Act, states were encouraged to submit plans to the national TANF agency, the 

Administration on Children and Families (ACF) at the U.S. Department of Health and Human 

Services. States were required to submit their plans for TANF-EF subsidized employment to 

ACF for approval. 

This is a rapidly evolving program. Subsidized employment programs are ramping up 

nationwide, and some states are implementing extremely large programs. Some states (e.g., New 

York and Florida) submitted plans in late 2009, but most states submitted plans in early to mid 

2010. Much of the increased emphasis on TANF-EF subsidized employment occurred after 

January 2010 when joint guidance was issued to the field by ETA and ACF (TEGL 12-09). As 

of July 8, 2010, ACF had approved subsidized employment plans from 31 states, with potential 

expenditures ranging from $15,000 in Utah to over $190 million in Illinois. Fifteen of the 16 

states in this study have been approved by ACF to operate TANF-EF subsidized employment 

programs.

When the researchers for this study were in the field, most states had not yet begun their 

TANF-EF subsidized employment programs. A few of the study states had begun the subsidized 

employment program, including Florida, Texas, and New York. Where the program was 
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operational, it was a high priority and the workforce investment system and One-Stop Career 

Centers usually played a major role. Other states were in the process of beginning the program:

 Illinois announced its program, ―Put Illinois to Work,‖ two weeks after our visit 

to the state. Potentially, Illinois may have the largest subsidized employment 

program in the nation, able to draw down over $194 million and planning to 

subsidize 15,000 jobs statewide by September 30, and by hiring for short periods 

(e.g., three months); each job slot might potentially be filled over time by more 

than one worker. (As of June 2010, the state reports that over 10,000 workers 

have been placed in short-term subsidized jobs.)26 The initial enrollees into the 

program were individuals already enrolled in WIA. The program is administered 

statewide by Heartland Alliance, a large nonprofit agency with extensive 

experience operating Transitional Jobs programs particularly for ex offenders and 

homeless individuals. Many local WIBs and nonprofit program providers are 

subcontractors for the program.

 Pennsylvania Department of Labor and Industry administers the TANF-EF 

program and has issued the Request for Proposals from local WIBs interested in 

operating the program.

 New York Office of Temporary and Disability Assistance (OTDA) administers 

the state’s TANF-EF program, with a collaborative role for the Department of 

Labor. Locally, several WIBs in New York, along with several nonprofit 

organizations, received OTDA grants for TANF-EF funded subsidized 

employment programs in early 2010.

 In Florida, the state workforce agency, the Agency for Workforce Innovation 

(AWI) administers the TANF work program and also is responsible for the 

TANF-EF subsidized employment program called Florida Back to Work. WIBs 

operate the program locally. Eligibility for Back to Work jobs extends to those up 

to 200 percent of poverty with a dependent child. The subsidy model is similar to 

on-the-job training, with 100 percent of the wage subsidized, for a length of time 

determined by the local One-Stop Center (usually through September 2010). 

Individuals can apply for the program online at the Department of Children and 

Families (DCF) website, and DCF does a quick screen for eligibility (income and 

dependent children), making a conditional determination if possible. If not 

possible, the individual is asked to go to the Back to Work unit at the local OneStop Career Center where DCF and One-Stop staff will determine eligibility. All 

individuals are asked to attend an orientation at a One-Stop center, and center

staff conducts an assessment to determine an appropriate type of job. Individuals 

are referred to employers who have signed up for the program, and the employer 

selects which participant to hire. There is an expectation that private sector 

 

26 Illinois Department of Human Services, Press Release, 6/23/2010, ―Governor Quinn Calls on Employers 

to Sign Up at PutIllinoisToWork.Illinois.Gov.‖
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employers will attempt to retain the person after the subsidy ends; public and nonprofit employers do not have to make such a commitment.

Florida plans to have a total of 10,000 subsidized jobs by September 2010. AWI 

piloted the model in the fall of 2009, and the program was implemented statewide 

in January 2010. WIBs are marketing to and recruiting employers and as of May 

2010, over 900 employers, mostly in the private sector, had signed up for the 

program. About 800 subsidized job placements had been made.

 The Texas Back to Work program was authorized by the legislature in 2009 to 

subsidize jobs for UI claimants who previously earned less than $15 per hour. In 

collaborating with the Texas Health and Human Services Commission to plan the 

TANF-EF subsidized employment program, the Texas Workforce Commission 

modified the Back to Work program to also serve as the TANF-EF subsidized 

employment program, allowing the state to provide assistance to additional lowincome residents.

While it is too early to tell what the effect of the TANF-EF program will be on the 

employment of low-income individuals or in the workforce investment system, in the areas in 

which it is operating it is a very high priority. A few insights emerged from the visits to the 

study states as the new subsidized programs were beginning:

 In some states, the state workforce agencies have operational and administrative 

responsibility for the subsidized employment programs, as they do for TANF 

work programs. In states such as Florida, much of the responsibility for the 

success of the program falls to the workforce investment system. In several 

states, workforce development staff at the local level is carrying out this 

responsibility as instructed, but some confidentially raised concerns about 

whether enough employers will sign up to meet the goals set by the state agencies. 

Some staff resents having to shift priority to the new program when so many 

customers are seeking employment services in the local offices because of the 

recession.

 Many of the subsidy programs are similar to OJT. Some states, such as Illinois, 

have specifically incorporated provisions into the contracts whereby the employer 

agrees to provide some training. Some states, such as Illinois, have a cap on the 

wages that can be subsidized. In other states, the training may be implied but not 

in the contract per se, and there is no cap on the amount of the wage subsidy.

 In some states, such as Pennsylvania, the TANF-EF subsidized program is serving 

youth as well as adult participants by coordinating with the Summer Youth 

Program. A considerable amount of TANF-EF funds were used to supplement 
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and expand the 2009 Summer Youth Program, and this also may occur in the 

summer of 2010. 

No statistics are yet available on the scale of the programs, but according to administrators and 

staff in programs where the workforce development system is involved, the majority of 

individuals in TANF-EF funded subsidized jobs in 2009 were not TANF cash recipients; all were 

unemployed, and many were UI claimants or recent UI exhaustees. Some states have 

consciously made UI claimants the top priority for subsidized jobs, and staff noted off the record 

that it was considered a way to reduce the cost burden on the UI Trust Fund, even if it is only 

temporary.
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CHAPTER VIII

CHALLENGES, ACCOMPLISHMENTS, AND NEXT STEPS

This chapter of the report summarizes, from the perspective of administrators and staff in 

the states studied, the most significant challenges and greatest achievements in implementing the 

Recovery Act workforce provisions to date. The chapter also discusses the next steps for the 

project. During the site visits, state officials were asked their views on their greatest overall 

challenges and accomplishments in dealing with the Recovery Act, as well as challenges and 

achievements for specific programs. The previous chapters summarized challenges and 

accomplishments for specific programs, and this chapter describes the challenges and 

accomplishments most frequently noted by states visited. The chapter concludes with a 

description of the next steps for the project.

A. Challenges

An important objective of the site visits involved identifying early challenges that states 

and local workforce areas encountered in planning and implementing Recovery Act 

requirements. During site visits, states and local workforce areas were asked to identify and 

discuss their greatest challenges (as well as major accomplishments) with respect to the 

Recovery Act. It is important to note that the challenges cited were encountered during 

approximately the first six to 12 months of implementing Recovery Act provisions (depending 

upon when the site visit was conducted). The most commonly cited challenges are listed in 

Exhibit VIII-1 below.
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Exhibit VIII-1

Challenges Most Commonly Cited by States

Recovery Act reporting requirements

Funding issues

Staffing issues

Time issues

The bad economy

The most commonly cited challenge, mentioned by 14 of the 16 states visited, was 

dealing with the Recovery Act reporting requirements. Many of the comments by state 

workforce agencies focused on the fact that, with very little notice, they had to set up reports that 

were different from their regular reports in terms of schedule, and in some instances, content. 

The frequency of reporting -- monthly rather than quarterly – was also viewed by some states as 

burdensome. One state official indicated that reporting on jobs ―saved‖ or ―created‖ was 

difficult because it was difficult to know which jobs really fit into that category. Several state 

officials commented that they did not have enough time to complete the software programming 

to generate required reports; some of the initial definitions of data items were unclear to some 

states (Illinois and Montana), and at least in the case of TAA, states believe that ETA did not 

issue guidance sufficiently in advance of when the reports were due (Colorado, Michigan, and 

Ohio). Several of the specific concerns identified by states with regard to reporting are 

illustrated below: 

 Colorado. Reporting on Recovery Act expenditures has proved to be burdensome for the 

state. The state workforce agency had to scramble to set up a separate set of financial 

reports to meet Recovery Act requirements. This was because the timing for Recovery 

Act reporting was not the same as for reporting on other expenditures. The fiscal period 

for the state workforce agency usually cuts off 10 days after the end of the quarter. 

However, for Recovery Act fiscal reporting, the state had to develop an expenditure 
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report for Recovery Act funds as of the last day of the month at quarter’s end. This 

meant that the timing for producing the Recovery Act fiscal reports did not match with 

the timing of what the state normally uses for its regular reporting on other programs, 

such as the WIA programs. There was also not enough time to validate the data used to 

meet Recovery Act reporting requirements, as is normally the case with the regular 

reporting system. In addition, it was burdensome for the state to report on Recovery Act

expenditures by county and Congressional district. The state had to move very quickly 

with existing IT staff to meet the Recovery Act reporting requirements. This effort was 

further complicated because guidance from ETA on reporting requirements came very 

late. For example, guidance on financial reporting was issued in mid-September,and the

report was due to USDOL about two weeks later (September 30th). 

 Ohio. State workforce officials observed that guidance on reporting requirements was 

delayed and, in some cases, issued after reports were due to ETA. There were new data 

items to report on – in particular, there was quite a bit more burden to reporting on TAA. 

In addition, the state had to move quickly to make changes to its automated data systems 

to meet ETA reporting requirements. At times, IT resources were strained in making 

changes to systems to meet ETA requirements in a timely manner (especially for TAA).

 Wisconsin. The monthly reporting required under the Recovery Act meant double 

reporting for the state – continued reporting on its regular funds and separate reporting on 

Recovery Act activities, accomplishments (e.g., job creation), and expenditures. 

According to state officials, Recovery Act reporting differed somewhat from WIA 

Common Measures reporting – Recovery Act reporting was more process rather than 

outcome oriented – e.g., reporting on numbers served, services provided, and 

expenditures. In some instances, ETA provided last minute instructions on reporting 

requirements.

The next most frequently identified challenge with respect to the Recovery Act 

implementation was funding issues, mentioned by 10 of the 14 states visited. The specific 

challenges identified varied among the states. One state (Colorado) said that its procurement 

requirements led to delays in spending some of its Recovery Act funds. The state’s workforce 

officials observed that the state’s procurement process can be long and cumbersome and that 

trying to get Recovery Act funds out quickly and meeting procurement requirements can (in 

some cases) be a trial. Two states (Colorado and Florida) stated that they experienced 

difficulties spending Recovery Act funds because ETA adjusted their waivers and limited the 

amount by which they could transfer their WIA Dislocated Worker funds to the Adult program. 
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Many of the states visited expressed serious concerns about what would occur once the Recovery 

Act funds were spent. Some states mentioned that if customers were enrolled in long-term 

training, they might not be able to continue, or the following year’s enrollment would drop 

dramatically. Even a state like North Dakota, with the lowest unemployment rate in the nation, 

was concerned about the ―funding cliff.‖ A common refrain across states was that it was likely 

demand for employment and training services would remain elevated for at least one year after 

Recovery Act funding was dissipated and that One-Stop Career Centers would not have 

sufficient staffing and funding to provide the training and other services needed by unemployed 

and underemployed customers (as is reflected in the following examples from site visits):

 Louisiana. State workforce officials are concerned about whether the program 

systems and processes that they have developed in whole or in part with Recovery 

Act funds will be continued once Recovery Act funds are exhausted. State and local 

programs may instead fall back on what they are comfortable with, and put less 

priority on some of the newer initiatives. Newer state priorities funded by the 

Recovery Act, such as employer-based training, OJT, summer youth employment, 

long-term training, and developmental education could be dropped. This is 

particularly true if the recession continues and top priority will have to be placed on 

processing UI claims and working with recently unemployed customers seeking 

assistance. Some local areas are concerned about whether they will have enough 

funds to continue standard workforce development services. A few, for example, are 

beginning to consider incorporating with another WIB. The 60 staff members hired 

as a result of the Recovery Act are all temporary employees, and state administrators 

doubt that they will be able to keep them. Recovery Act funds have postponed the 

staff reductions the state was going to have to make because of its shrinking WIA and 

Wagner-Peyser funding, but the increasing fiscal pressure in the state may now 

require more staff cuts.

 Montana. Montana’s WIA allocations have fallen by more than half, from $15 

million in PY 2000 to about $6 million by PY 2008. The additional WIA dollars 

received through the Recovery Act (almost $6 million for Adults, Dislocated 

Workers, and Youth), when added to the annual allocation, just began to approach 

earlier levels. Because of the large number of job losses in timber and related 

industries, Montana is expected to receive a 25 percent increase in WIA Dislocated 

Worker funding in the coming program year, though this will not come close to 

restoring funding to 2000 levels or keep pace with recession-related demands for 

service. Montana officials are particularly worried about having to ―close the front 

door‖ to new registrants (whose numbers have yet to slow) as a larger percentage of 
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available funds will be needed to continue to support those already registered and 

receiving training (and who are staying in services longer than in the past). An

official observed: ―We’re concerned about what happens come July 1, when we have 

folks currently enrolled in training and will have to carry them, which may mean we 

have to take fewer numbers at the front end.‖

 Ohio. From the beginning, state workforce officials feared that Recovery Act

funding would be fully spent, but economic conditions would not turn around quickly 

enough in the state to dent very high unemployment rates experienced throughout the 

state. In addition, as state administrators look forward, they see that not only will

Recovery Act funding end, but the state’s allocation for formula funds (particularly 

for WIA-Dislocated Worker funds) the coming year will be cut. (WIA formula funds 

to the state have been cut from $140M in PY 2009 to $127M in PY 2010). There is a 

lot of concern that Recovery Act funding will run out, but there will still be surging 

unmet demand for employment and training services at many One-Stop Career 

Centers in the state.

The third most identified challenge with regard to the Recovery Act – mentioned in nine 

states – was staffing issues, particularly related to bringing on new staff and providing necessary 

training. For example, Louisiana workforce officials indicated that it was a challenge to train 

state and local staff on new procedures resulting from the Recovery Act, particularly because 

there was a change in state administration, which created gaps in the organization. One state 

indicated they had run into hurdles in bringing on new staff because of issues with the state 

human resources department. Several states indicated that hiring was slowed because of civil 

service hiring procedures at the state or local level (New York and Colorado experienced 

problems at the local level, and Virginia at the state level). Although not noted as a major 

challenge, Illinois could only hire intermittent staff for Wagner-Peyser positions (i.e., within the 

constraints of working no more than 1,500 hours per year). Finally, several states reported hiring 

freezes or staff furloughs that complicated efforts to bring on new staff – for example, 

Pennsylvania had a hiring freeze and had to get an exemption to use Recovery Act funding to 

hire new staff. Several illustrations of the specific staffing issues encountered by states follow:
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 Florida. According to state workforce officials, the real challenge since the Recovery 

Act is that every local WIB has had to increase staff because the One-Stops are 

overwhelmed with customers. They have had to find and train new staff and find space 

(there are not sufficient funds to open new One-Stop Centers) to increase services. They 

have had to retrain existing staff in order to change the skill sets of workers to address the 

needs of new UI claimants and long-term claimants who may have higher skills and had 

higher incomes than many past customers. They have also opened up new call centers 

for UI claimants.

 Illinois. Workforce officials noted that it was difficult to staff up and secure the 

necessary expertise given collective bargaining agreement rules that staff laid off from 

other agencies be considered first for new job openings.

 New York. While the ―functional alignment‖ of workforce programs helped to alleviate 

the issue of handling the increased volume of customers, it could not solve logistical 

issues such as having enough space and One-Stop staff to serve everyone. Customers at 

some centers experience lengthy wait times to access computers in resource rooms and 

for appointments with counselors, as well as sometimes experience crowded orientation 

sessions. Some locations were able to secure donated space or short-term leases for 

temporary extra space, but in some areas of the state such arrangements were not 

possible. The challenge to expansion is that the Recovery Act funding is short-term, and 

a new lease, which is typically long-term, is not feasible. Hiring new permanent staff 

also requires changes to current budgets and a lengthy process if the position must be 

approved through government channels.

 Washington. State workforce officials reported the most difficult thing related to the 

Recovery Act was hiring staff given the state’s existing civil service system and ongoing 

hiring freeze. Administrators noted it was easier to get approval to hire front-line staff 

than human resources (HR) staff, even though the HR staff was needed to help bring the 

front-line staff on board. Washington added some direct-service staff to provide 

reemployment services to UI claimants, using both Recovery Act and UI contingency 

funds. In addition, the state added business outreach managers in each local area to 

develop job leads. Washington also hired three summer youth managers on a temporary 

basis, and one MIS person. The challenge has been in retaining these temporary hires. 

One issue is that the state workforce agency focused on hiring quality applicants, but

many of these workers did not want temporary employment. If they took a position, the 

workers continued to look for regular employment and moved on when they found it. 

The temporary staff that remains sees the cliff coming in September, and it is hard to 

convince them to stay on-board or that the state would like to keep them on after 

Recovery Act funding expires.

Fourth, time issues were mentioned as a challenge in nine states, often in conjunction with 

staffing and reporting issues. Some states felt that the pressure to spend Recovery Act funds 

quickly was more difficult because ETA changed its waiver policy and limited the amount by 
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which they could move funds from the WIA Dislocated Worker program to the Adult program. 

As noted above, some states had problems in hiring the staff needed to run the programs 

(including Illinois, Colorado, and New York). TAA was cited by a number of states for 

timeliness issues (for example in Wisconsin, New York, and Michigan) related to publishing 

regulations and providing guidance (especially related to reporting) and approving TAA petitions 

in a timely manner. Finally, with respect to timeliness, several states mentioned the WIA 

Summer Youth program, because they did not have long to mount the program and many states 

had not run a summer program for many years (Ohio and Pennsylvania). The following provide 

several illustrations of the strain that state and local workforce agencies were working under to 

quickly mount, administer, and report on Recovery Act funded activities:

 Ohio. A key overall challenge was that the planning period was very short – particularly 

with respect to getting the summer youth program up and running. Many local areas did 

not have an active summer youth program, and so it was considerable work to get 

programs up and running. The state was under a lot of pressure to spend quickly and 

wisely. There was little time available for planning – and so the state had to work with 

existing programs and structures. It was not possible to be all that creative at times 

because of the very short time period for implementation and the temporary nature of the 

funding. At times, the state had to plan Recovery Act spending and activities based on 

what ETA said rather than formal written documentation.

 Pennsylvania. State workforce administrators noted that the implementation of the 

Summer Youth program was a challenge, as they had not operated this program since the 

JTPA years. They needed to start from scratch and it took two months of intensive work 

to pull the Summer Youth program together at the state level.

About half the states visited found guidance from ETA to be a challenge. Issues included 

timeliness and getting the right answers. For example, Michigan and Colorado officials 

indicated that ETA officials did not always have answers to their questions on expenditures of 

Recovery Act funds. As noted above, guidance on TAA was considered to be slow. The states 

recognized that ETA had very little time to develop and disseminate guidance, and they 
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expressed the view that ETA did quite well given how rapidly the guidance to states had to be 

issued.

Finally, seven states mentioned that the bad economy was a major challenge to 

effectively mounting program activities funded by the Recovery Act. For example, Nevada and 

Michigan, with the worst unemployment rates in the nation, were concerned that they would 

have trouble placing people undergoing training into jobs. Florida workforce officials also 

expressed general concerns about the state’s economy. With leading industries such as tourism 

and housing in decline, and a weak economy overall, it has been very hard to place customers in 

jobs.

In conclusion, it is important to note that although state and local workforce agencies 

faced significant challenges, for the most part states were able achieve their goals and serve their 

customers with Recovery Act funding. Ideally, they would have liked more time, more 

flexibility, and better guidance, but states and local workforce areas generally recognized that 

ETA was under intense pressure to get things going and they did not view the challenges faced 

as fatal flaws to moving forward with rapid and effective implementation of Recovery Act 

requirements and activities. 

B. Accomplishments

During site visits, states and local workforce agency officials were asked to discuss their 

major accomplishments with Recovery Act funding to date. In discussing accomplishments, it is 

important to note that the accomplishments cited are for a relatively short period of time 

following start-up of Recovery Act-funded activities – generally for a period of six months up to 

about one year after first receipt of Recovery Act funding (depending upon when the site visit 
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was conducted in the state). As is discussed in this section, there were a number of 

accomplishments commonly identified across states and local areas, particularly with regard to 

mounting (or expanding) the WIA Summer Youth program, enhancing training and other 

services, expanding the number of customers served, and improving information and reporting 

systems. Exhibit VIII-2 below lists the major accomplishments cited by the states visited, and 

Exhibit VIII-3, at the end of this section, provides an overview of the accomplishments identified 

by each state.

Exhibit VIII-2

Accomplishments Most Commonly Cited by States

Successful development and administration

of the WIA Summer Youth Program

Serving more customers

Significant service enhancements

Reemployment services and/or enhanced relationships 

between the Employment Service and UI

Changes to the state’s training programs

The most prevalent major accomplishment in the states visited was the successful 

development and administration of the WIA Summer Youth program. Citing the summer youth 

program as a major accomplishment is impressive because the site visits were not intended to 

cover the WIA Youth programs, so this program was not the subject of questions asked during 

site visits or on the minds of those interviewed. Because Recovery Act funds were not available 

until March at the earliest, states had to act quickly to implement their summer youth programs. 

Many states and localities had not operated summer youth programs in recent years (or if they 
149

had, programs were operated on a small scale), so setting up a large program in a short period 

was considered a major accomplishment. 

Several of the states indicated that they had greatly expanded their summer youth 

programs and that the programs had produced increases in work readiness and job skills. For 

example, Illinois workforce officials noted that 17,000 youth were served, and the program 

produced increases in work readiness and job skills. Louisiana workforce agency officials 

referred to the summer youth program as the ―hottest thing in the Recovery Act,‖ which had 

provided many youth with their first paid work experience. Workforce officials in Michigan 

observed that the program provided much-needed income for the youth and their families in a 

state with very high unemployment. And finally, Wisconsin workforce officials noted that they 

used the summer youth program to promote green jobs and training, e.g., by initiating projects to 

eliminate invasive species in Wisconsin lakes and streams. Below are several illustrations of the 

ways in which Recovery Act funding made a difference with regard to enabling states to 

substantially expand summer youth enrollment and employment experiences:

 Florida. The highlight of the Recovery Act spending in Florida was $42 million for their 

summer youth program, which employed 14,000 youth in the summer of 2009. The state 

had not had funding for a summer program since JTPA. It was a challenge, requiring 

local WIBs to start from scratch to redevelop partner relationships. For the summer of 

2010, the state will use unspent funds from 2009 as well as a small amount of state funds 

for a modest program. They moved a small amount (about $1 million in WIA Youth 

funds and $1 million in WIA Adult funds) to jumpstart a program for the 5 or 6 regions 

that requested it. About half the WIBs will have funds to run a program for the summer 

of 2010. 

 Louisiana. The main accomplishment under the Recovery Act, according to state 

officials, was the implementation of the summer youth program in 2009. It was done 

well and will have a huge impact on the economy of the state by investing in students 

who might not have otherwise had this type of experience. In addition, many working in 

the workforce investment system had been frustrated and discouraged with so many 

unemployed, and introducing the summer youth program and the momentum needed to 

implement it increased morale. 
150

 Ohio. Perhaps the greatest accomplishment to date under the Recovery Act was 

successfully mounting a summer youth program that served a total of 18,000 youth. 

Local areas implemented programs in a timely and effective manner, even in areas where 

there had not been summer youth programs in recent years.

 Wisconsin. Many youth were served (4,400) in the WIA summer youth program. This 

program was mounted quickly and featured green jobs activities and training. The state 

used Recovery Act discretionary funds to conduct two special projects, one in energy 

conservation and the other in aquatic invasive species. The ―energy auditors‖ initiative 

provided 19 WIA youth in five communities across the state with 40 hours of training on 

going into homes to conduct energy audits to identify ways in which homeowners can 

conserve energy. Under the ―invasive aquatic species‖ initiative, a total of 49 WIA youth 

received training and then accompanied Department of Natural Resources staff at lakes 

around the state to advise boat owners about how to take precautions to halt the spread of 

invasive aquatic species in Wisconsin’s lakes. An estimated 5,000 recreational boats 

were inspected across the state as they were pulled from the water – and when 

appropriate, youth helped to clean off mud from the bottom of boats that could be 

harboring invasive species.

Ten of the 16 states surveyed cited serving more customers as a major accomplishment. 

With the large influx of Recovery Act funding, the number of customers increased greatly in all 

states. During state and local interviews, agency officials often observed that One-Stops in their 

state were ―overwhelmed‖ or ―swamped‖ with unemployed and underemployed customers in 

need of employment, education, training, and a range of supportive services. For example, one 

state – Colorado – said, ―the Recovery Act provided extra resources to hire and deploy additional 

staff to One-Stop resource rooms to deal with the surge in customers.‖ In Montana, state 

workforce officials said they were able to expand the number of customers served without a 

major expansion of the size of their operation. State officials in Nevada indicated that they had 

been able to use the extra resources provided by Recovery Act funding to eliminate lines in the 

One-Stops. With Recovery Act funding, Ohio was able to hire 100 intermittent Wagner-Peyser 

staff to help deal with the surge in customers at the One-Stops and to expand RES to a much 

larger number of UI claimants than would have been the case without Recovery Act funding.
151

Nine states cited significant service enhancements as a major accomplishment made 

possible with the availability of the Recovery Act resources. These service enhancements came 

in a variety of services offered to One-Stop customers. For example, Wisconsin was able to use 

Recovery Act RES funds to pursue their goal of providing a rich array of reemployment services 

using WorkKeys and KeyTrain that helped claimants work toward the National Career Readiness 

Certificate (NCRC). North Dakota used Recovery Act funds to purchase software (TORQ) to 

develop skills transferability reports for occupations affected by layoffs. These reports were 

provided to One-Stops to be used in rapid response services. Florida used Recovery Act funds to 

fund their Back to Work program to enable TANF recipients to get subsidized employment and 

improve their prospects for an unsubsidized job. Montana used discretionary Recovery Act grant 

awards to pursue strategies to advance the state’s renewable energy strategy. And finally, in 

Nevada, Recovery Act funding was used to make major improvements in its UI system. 

Seven states cited RES or improved UI/ES relationships as a major accomplishment. 

Colorado workforce officials stated that the Recovery Act activities helped to bring UI and 

workforce staff closer together. Staff on both sides is now more knowledgeable about the other 

and more willing to collaborate. Several states said that Recovery Act funds enabled them to 

reinstate RES (including Florida and Illinois). As noted earlier, Wisconsin conducted a major 

upgrade of its RES services, which the state hopes to make available to an increasing share of its 

customers. Two more detailed illustrations of the ways in which RES services have been 

expanded or UI/ES relationships improved are highlighted below: 

 Colorado. The efforts implemented under WIA have helped to bring the UI and 

workforce systems closer together. Staff on both sides is more knowledgeable about the 

other’s programs and are more willing to collaborate. One-Stops and workforce regions 

had reached near crisis levels in responding to UI claimant concerns (e.g., delayed 

checks, could not get through on the telephone to a call center, etc). The Recovery Act 

funding helped the state to conduct special UI workshops in various regions (referred to 
152

as ―road shows‖) that helped to alleviate stress on the One-Stop system to address UI 

claimant concerns.

 Wisconsin. One of the biggest changes in the workforce system that has resulted from 

the Recovery Act is that there has been a substantial expansion in RES services for UI 

claimants. Wagner-Peyser Recovery Act funds ($7.2 million) and UI Recovery Act 

administrative funding ($3.6 million) – for a total of nearly $11 million – were used to 

expand and fundamentally change the way in which UI claimants are served by the OneStop System. The state was able to vastly expand the number of UI claimants attending 

orientation services, as well as receiving one-on-one services. Having been 

experimenting with the ―Career Pathways‖ model for several years under a Joyce 

Foundation-funded grant, Recovery Act funding provided an opportunity to take this 

model and apply it to UI claimants.

Finally, six states cited changes to their training programs as a major accomplishment of 

the Recovery Act. For example, Florida used Recovery Act and other funding for its Employ 

Florida Healthcare Initiative, which includes employer-driven models for assessment and 

training. Illinois used Recovery Act funds to develop ―bridge programs‖ that help low-income 

workers gain basic skills and other skills to help them move into better occupations. Finally, 

Nevada issued an RFP for new service providers to serve as intermediaries and expand 

opportunities for customers to obtain training more quickly and conveniently.

While states and local areas were able to identify various short-term accomplishments 

made possible with Recovery Act funding, some of the effects of the Recovery Act will not be 

fully felt or known for some years to come – particularly with respect to investments that have 

been made in long-term training and in work experiences provided through the summer youth 

programs. The next phase of the research conducted under this study will provide a somewhat 

longer-term look at accomplishments stemming from state and local Recovery Act efforts, as 

well as where states and localities may have been challenged or even fallen short of overall goals 

for the Act.
Exhibit VIII-3

Major Accomplishments with Recovery Act Funding 

As Identified by State Workforce Agencies

153

STATE MAJOR ACCOMPLISHMENTS

Arizona

The state reinstituted an RES program using Recovery Act funds. Three Reemployment Centers 

were opened in areas of high unemployment.

The Recovery Act allowed local One-Stops to serve additional customers they would not have been 

otherwise able to serve.

The state used ES funds to improve the infrastructure of One-Stops including redesigning lobbies 

and resource rooms, increasing the size of some locations, and adding new television screens for 

videos and looped information.

Colorado

The state and its regions were able to mount programs quickly and successfully.

Recovery Act funding was very helpful in terms of modernizing data systems, particularly handling 

extended benefits under the UI program; under tight time constraints, state has been able to meet 

reporting requirements imposed under the Recovery Act.

The efforts implemented under the Recovery Act helped to bring the UI and workforce systems 

closer together. The Recovery Act provided extra resources to hire and deploy additional staff to 

One-Stop resource rooms to deal with the surge of job seekers coming into One-Stops for 

assistance.

Florida

Summer Youth Employment Program (SYEP) employed 14,000.

The state used Recovery Act and other funding for the Employ Florida Health Care Initiativeemployer-driven new models for assessment, training, common contract.

The state used Recovery Act funds to staff the Florida Back to Work/TANF subsidized 

employment program.

The state improved RES services, with more emphasis on intensive staff-assisted services serving 

more UI claimants.

Major LMI expansion was undertaken—bandwidth and storage capacity expansions, software to 

enhance real-time information for front line staff.

Illinois

Illinois had successful administration and successful outcomes (as measured in pre- and postparticipation differences in work readiness and job skills) with the WIA youth program, which 

served 17,000 youth in the summer of 2009.

WIA state discretionary dollars were used for bridge programs for low-income workers in key 

sectors. The state reinstated Reemployment Services (especially via Reemployment Workshops) 

that had been discontinued in 2005. 

Louisiana

SYEP was the ―hottest thing in Recovery Act spending‖—it was a learning experience and 

implementation success, placing 5,000; 50% of participants were out of school, may never have 

worked before, and are now ready for future work.

Interdepartmental collaboration was a direct result of the Recovery Act; departments had to 

scramble to spend money, find partners, and push in same direction. ―Before there were silos, now 

there is more cooperation.‖

Michigan

Many youth served (21,000) in the WIA summer youth program -- this program was mounted 

quickly and provided much needed income to both youth and their families. 

WIA Dislocated Worker and Adult Recovery Act funding about doubled and was particularly 

helpful with regard to expanding training (and especially longer-term training) to adults, dislocated 

workers, and youth – a high proportion of the Recovery Act WIA funding went to training and this 

has helped to boost skills of the workforce and prepare them for new jobs.

The state and local workforce areas expanded partnerships with other agencies and particularly 

intensified linkages with education/training providers.

Recovery Act funding has helped to leverage additional funding from other sources, including 

grants from the federal government and from philanthropic organizations.

The state is in the process of enhancing the state’s MIS and the Michigan Talent Bank system.
Exhibit VIII-3

Major Accomplishments with Recovery Act Funding 

As Identified by State Workforce Agencies

154

STATE MAJOR ACCOMPLISHMENTS

Montana

There was a major expansion of services without increasing the ―size of the business.‖ 

Summer youth program involved 800 young people and ―got a lot of good things done in 

communities that wouldn’t have been done otherwise‖ (especially as no previous program existed). 

There were discretionary awards to further pursue what MT hopes is a transition to a new economy 

based on renewable energy (wind, bio-mass, bio-fuels). 

Nevada

Mounting a huge and successful summer youth program on a moment’s notice were major 

accomplishments.

The state eliminated the lines and served many more people in the One-Stops.

Nevada Issued an RFP for new service providers and awarded new contracts within 2 months and 

then provided training in WIA and the Recovery Act. This enables more people to enroll in 

training.

The state continued its very successful RES/REA programs. 

The state was able to direct Recovery Act resources into business services which have the potential 

to enhance job opportunities.

The state made major improvements to the UI system.

New York

The state has been pursuing a range of initiatives to boost employment and training opportunities 

for its citizens. State-level resources have been used to provide grants for training disconnected 

youth and low-income, unemployed adults.

Because the workforce system had been aligned to integrate services for customers, new systems 

did not need to be created to implement the Recovery Act provisions. The state was able to issue 

Recovery Act-related policy and allocate Recovery Act funding to the LWIAs, with the expectation 

that the LWIAs could ―scale up‖ to meet the community’s needs. While there were challenges, the 

local areas visited were able to scale up to serve the influx of customers.

Use of technology tools enabled the state and LWIAs to manage workforce and UI programs and 

better serve customers. Re-Employment Operating System (REOS), a scheduling and appointment 

tracking system for UI customers, helped One-Stop centers handle the large increase in UI 

claimants and manage staffing and resource needs. The SMART 2010 technology was appropriate 

for serving customers with Internet access and JobZone has been successful for career exploration 

by adults, especially for those who may need skills upgrades and need to plan for training.

North Dakota

The state mounted a successful Summer Youth Program.

North Dakota rapidly deployed funds. 

The state assisted more customers with WIA assistance.

The state purchased TORQ software and used this software to develop STA (Skills Transferability 

Analysis) reports for those occupations affected by layoffs. These were provided to One Stop 

Offices to be used in rapid response events and working with laid off workers. 

The state began longitudinal studies of workers affected by major layoff events. 

The state developed an improved database to store and analyze data from Dislocated Worker 

Survey and began work on special research studies on births and deaths of businesses in North 

Dakota, the relationship between oil & gas prices and employment in that industry, veterans 

employment in North Dakota, tracking of WIA participants, etc.

Ohio

Ohio’s greatest accomplishment was that it successfully mounted a summer youth program that 

served 18,000 youth.

The state hired 100 intermittent W-P/ES staff to help One-Stops deal with the huge surge in 

customers in One-Stops and expand RES orientations for UI claimants.

The Recovery Act funds 4 training initiatives: (1) Project HIRE; (2) Recovery Conservation Corps; 

(3) Urban Youth Works; and (4) Constructing Futures.
Exhibit VIII-3

Major Accomplishments with Recovery Act Funding 

As Identified by State Workforce Agencies

155

STATE MAJOR ACCOMPLISHMENTS

Pennsylvania

The Recovery Act funding allowed the state to become more strategic in how it focused workforce 

development investments. The key was to invest in increasing the service level (e.g., increased 

staffing, one-on-one assessments), not on facilities, equipment, or websites.

The work done prior to the Recovery Act to align the goals for workforce development at the state 

level and the investments in technology and other system capacity development, such as the 

CWDS, has allowed them to respond to the economic recession effectively. 

The new competitive grant process refined for the Recovery Act state training grants allowed the 

state to issue local and regional grants using the Recovery Act funding more efficiently and fairly.

Texas

Texas served more than 25,000 summer youth, about 10 percent of all youth served nation-wide. 

Recovery Act funding has allowed Texas to put more money and people into training and has 

increased training options.

The Recovery Act provided additional resources to expand the number of customers served through 

One-Stops.

Texas opened new One-Stop centers in Dallas, Tarrant County, and Alamo (San Antonio) 

workforce areas with Recovery Act funds.

Virginia

SYEP served 4,000 youth.

The state implemented the Community College ―On Ramp‖ pilot for new training and career 

pathways in areas of highest unemployment.

New VEC and UI express offices opened, significantly increasing access points and a return to oneon-one assessments.

Washington

Washington offered a Summer Youth program for the first time in 10 years and put 5,600 youth in 

work experience.

Washington implemented a new approach to business services with Recovery Act funding.

Wisconsin

Many youth were served (4,400) in the WIA summer youth program—this program was mounted 

quickly and featured some ―green‖ jobs and training.

WIA Dislocated Worker and Adult Recovery Act funding had been particularly concentrated on 

training – a state requirement that at least 70 percent of Recovery Act funds be expended on 

training (versus 35 percent for regular DW/Adult WIA funds) helped to ensure that a high 

proportion of Recovery Act funds were dedicated to training and upgrading worker skills.

The state was able to initiate substantial changes in RES – substantially more UI claimants were 

referred and provided with RES services than would have been the case in the absence of Recovery 

Act funding.
156

C. Next Steps

In the workforce development area, the work planned for the first phase of the project is 

nearly complete. Remaining work for the first phase includes the following:

 Obtain concurrence from states that have not yet finalized their review of the state 

reports.

 Update challenges and accomplishments to include all 20 states.

 Prepare and present a briefing for ETA on first phase study findings.

After this work is complete, the research team will confer with the Employment and Training 

Administration to plan the second phase of data collection, analysis, and reporting under this 

project. The proposal for the project included two rounds of site visits, but there was no 

commitment to include the same content or states in the second phase. Thus, issues that must be 

resolved for the second phase include:

 What topics should be covered in the second round of site visits?

 Should the states and local areas from the first round be retained, or should some or 

all the sites be replaced?

 When should the second round of site visits be conducted?

Once these issues are resolved, planning for the second round of site visits can commence. 
157

CHAPTER IX

UNEMPLOYMENT INSURANCE

A. Introduction

While the research approach for evaluating early, state implementation of the Recovery 

Act’s workforce development provisions progressed as planned originally (see sections I.B. and 

I.C. above), the approach for the UI provisions was modified early in the study process. The 

result is that this section provides a progress report on the UI research plan, and not interim 

findings.

The research team conducted all twenty of the proposed first-round site visits to state 

workforce development programs, and findings from the first sixteen of these visits have been 

synthesized and included in the preceding chapters of this interim report. The original research 

plan also envisioned concurrent site visits of UI programs in the same twenty states, and the 

drafting of interim findings based on the visits, but the research team modified the plan for two 

reasons. First, after pilot site visits to three states’ UI and workforce development programs, it 

became apparent to the team that UI interviews could be conducted via teleconference instead of 

through on-site visits, saving study resources. Second, and more important, the Recovery Act 

resulted in significant state legislative activity during the 2010 legislative cycle; the research 

team desired to wait until after completion of these legislative activities to conduct interviews of 

state UI administrators. 

Under the modified plan, the research team is conducting the 20 in-depth UI interviews 

this fall and early winter, and findings based on these interviews will be included in the final 

Recovery Act report due next year. To date, the UI research team has developed an interview 
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guide, has conducted a pilot teleconference interview with the state of Florida (held on October 7 

and 27, 2010), has amended its interview guide based on the pilot interview, and is scheduling 

and conducting the 19 remaining interviews. As detailed more below, the plan is to synthesize 

results from the twenty state interviews, and from several USDOL and NASWA resources, for 

the final Recovery Act study due next fall. 

The remainder of this section is a progress report that presents:

 an overview of the Recovery Act’s UI provisions;

 the areas of investigation for the study;

 the research plan and information that will be applied in the investigation; and

 in the appendix, a copy of the common interview guide and the report from the 

pilot Florida interview. 

B. Overview of Recovery Act UI Provisions

The Recovery Act included several major UI program tax and spending provisions which 

at the time of passage were estimated to result in federal outlays totaling approximately $45 

billion over ten years, with almost all the funds projected to be spent in fiscal years 2009 and 

2010 (see table below). Note that provisions increasing benefit durations and amounts were 

extended by subsequent legislation as the recession continued.27

 

27 P.L. 111-118 further extended the EUC program, 100% federal financing of the EB program, and the $25 

FAC benefit through the end of February 2010. These same three measures were extended through April 5, 2010, 

by P.L. 111-144 and through June 2, 2010, by P.L. 111-157. EUC-08 and the EB program were again extended 

until November 30, 2010 by P.L. 111-205. The FAC program was not extended.
159

Exhibit IX-1: Estimated Budget Effects of the UI Provisions of the Recovery Act

Recovery Act Provision Explanation of Provision

Estimated 

Budget Effects 

FY 2009-19

Benefit Extensions

 Extended the Emergency Unemployment Compensation 

program through December 26, 2009 (subsequently extended).

 Provided 100% federal financing of the Extended Benefits (EB) 

program in 2009 (subsequently extended).

$27 billion

Benefit Increase

Provided a temporary $25 per week supplemental unemployment 

benefit, known as the Federal Additional Compensation (FAC) 

program (subsequently extended).

$8.8 billion

Interest Free Loans

Temporarily waived interest payments and the accrual of interest on 

federal loans to states through December 31, 2010. $1.1 billion

Suspension of Federal Income 

Tax

Temporarily suspended federal income tax on the first $2,400 of 

unemployment benefits (per recipient) received in 2009.

$4.7 billion

UI Modernization

Provided up to a total of $7 billion as incentive payments for changing 

certain state UC laws; payments must be made before October 1, 

2011. $2.6 billion

Administrative Funding Transferred $500 million to the states for administration of their 

unemployment programs.

Total $44.7 billion

Sources: U.S. Joint Committee on Taxation, ―Estimated Budget Effects of the Revenue Provisions Contained in the 

Conference Agreement for H.R. 1, the ―American Recovery and Reinvestment Act of 2009,‖ JCX-19-09, February 

12, 2009, http://finance.senate.gov; Committee on Finance, U.S. Senate, News Release, ―Baucus Hails Senate 

Passage of Bill Creating Jobs, Cutting Taxes for America’s Working Families and Small Businesses,‖ February 10, 

2009, http://finance.senate.gov.

In addition to extending the emergency unemployment compensation program that was first 

passed in June of 2008, and temporarily waiving interest on Federal loans to state UI trust funds, 

the Recovery Act included the following provisions:

 Temporary full Federal funding of Extended Benefits

The Extended Benefits (EB) program is a permanent federal-state program that provides 

up to 13 or 20 additional weeks of unemployment benefits to eligible jobless workers in 

states with high and rising unemployment. At state option, workers in some states with 

very high total unemployment rates (TUR) are eligible for 20 weeks of EB rather than the 

standard 13 weeks. Costs of EB under permanent federal law are split equally between 

the Federal government and the states.
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The Recovery Act provided 100 percent Federal funding of EB for 2009. This 

provision, which was extended in subsequent legislation, gave states an incentive to adopt 

an optional "trigger" based on the state's three-month average TUR. It is easier for many 

states to trigger on using the TUR instead of the insured unemployment rate, which is 

significantly lower in many states.

The work search requirements of EB, outlined in statute and requiring ―tangible 

evidence‖ of work search, are more stringent and more difficult to administer than regular

state work search requirements. They require paper-intensive documentation, and were 

designed before the age of automated systems. 

 Increased UI benefit amounts -- Federal Additional Compensation

The Recovery Act created a new, temporary Federal Additional Compensation (FAC) 

program providing a 100 percent Federally-funded $25 add-on to all weekly UI payments

(this provision was subsequently extended). All states signed agreements to pay FAC 

effective February 22, 2009, the first week for which FAC was payable. 

 A temporary suspension of Federal income tax on unemployment benefits

Under law, all federal unemployment benefits are subject to income taxation. The 

average unemployment benefit is approximately $300 per week. Effective for taxable 

year 2009, the Recovery Act temporarily suspended Federal income tax on the first 

$2,400 of unemployment benefits per recipient. 

 UI ―modernization‖ provisions and incentive payments

The Recovery Act made a total of $7 billion in UI ―modernization‖ incentive payments 

available to states that include certain eligibility provisions in their state UI laws. States 

receive one-third of their share of the payments when they use more recent wages (the 

alternative base period provision) to determine UI eligibility if the claimant is not eligible 

using the normal base period. States receive the remaining two-thirds of their share when 

they also provide two of the following four eligibility provisions: 

1) Pay UI to individuals seeking only part-time work;

2) Ease qualifying requirements for workers who quit their jobs because of certain 

family responsibilities. These relate to workers who leave work due to domestic 

violence or sexual assault, to care for an ill family member, or to accompany a 

spouse who moves to a new job;

3) Extend benefits to workers in approved training who exhaust regular UI; and

4) Add dependents' allowances to weekly benefits.

The maximum incentive payment allowable for a state is distributed to the state 

unemployment trust fund accounts based on the state's share of estimated federal 

unemployment taxes (excluding reduced credit payments) made by the state's employers. 
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States must apply and applications are due to the U.S. Department of Labor by August 

22, 2011. All incentive payments must be made before October 1, 2011. 

States may use incentive payments for: 

(1) the payment of UI or

(2) upon appropriation of the state legislature, administrative costs for the UI and 

employment services programs.

There is no time limit on the use of the incentive payments for benefit or administrative 

purposes.

 A special $500 million transfer to states for UI administration

The Recovery Act provided a $500 million special UI administrative distribution to 

states. Each state's share was deposited in the state's account in the Unemployment Trust 

Fund on February 27, 2009, where it is available for:

(1) implementing the state's UI modernization provisions;

(2) improving outreach to individuals potentially eligible under the state's UI 

modernization provisions;

(3) improving UI tax and benefit operations, including responding to increased 

demand for UI; and

(4) staff-assisted reemployment services for UI claimants. 

Funds may not be used for the payment of UI. Each state’s share is based on its 

proportionate share of FUTA taxable wages multiplied by the $500 million. Most state 

laws require appropriation of these funds by the state legislature. 

C. UI Recovery Act Study Areas of Investigation

The Recovery Act’s UI provisions are intended mainly to provide relief to out-of-work 

Americans and to stimulate the overall economy. Few economists would doubt the stimulus 

benefits of UI and they will not be the focus of the study. Rather, the study seeks to capture the 

operational and administrative challenges states faced implementing the UI provisions, the 

innovations and sustainable improvements to UI operations resulting from the availability of new 

administrative funds and/or the demands of the recession, and the extent to which the provisions 

achieved other Recovery Act goals for the UI program beyond providing economic stimulus. 

The chart below lays out these other goals, by provision. The goals include UI eligibility 
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expansions, improved trust fund positions, improved UI tax and benefits operations, and 

reemployment services for UI claimants. 

Exhibit IX-2: Legislative Intent of UI Recovery Act Provisions

Recovery Act 

Provision Legislative Intent, by Provision

Economic 

stimulus/

fiscal 

Relief

Permanent 

expansions of

UI eligibility

Improved 

trust fund 

position

Improved 

UI tax & 

benefit 

operations

Reemployment 

services for UI 

claimants

EUC extension X

Interest-free 

loans X X

Extended 

Benefits X X

Benefit increase 

(FAC)

Temporary 

suspension of 

federal income 

tax

X

UI 

modernization X X X X X

Administrative 

funding X X X

Specifically, the final UI implementation report will seek to answer the following questions 

about states’ experiences implementing the Recovery Act during the worst U.S. recession since 

the 1930s: 

 Before passage of federal stimulus legislation in February 2009, what adjustments 

did states make to their UI operations to handle the overwhelming numbers of 

new and continuing claims filed by jobless workers? How were these process 

improvements and technology upgrades funded, and did they result in any

sustainable improvements to UI operations?
163

 How did states’ program performance and trust fund positions fare during the 

recession, and what were the implications for states’ decision-making as they 

implemented the Recovery Act’s UI provisions?

 What changes did states make to state UI laws as a result of the Recovery Act?

o Did states without an optional trigger for the EB program enact one, and, 

if not, why not? 

o Did states expand eligibility for UI through the modernization incentive 

provisions? What was the nature of the debate on these provisions? Are 

statutory changes likely to be sustained?

 What administrative and operational challenges have states encountered 

implementing the UI benefits provisions? 

 What are states’ plans for spending UI administrative funds, and what is the 

timetable for expending these funds? 

o Are states spending or planning to spend UI administrative funds to 

improve the connection between the UI and workforce systems and the 

availability of reemployment services, and if so, what improvements and 

services were or will be implemented? Are any of these improvements or 

services sustainable?

o Are states spending or planning to spend UI administrative funds to 

improve tax and benefit operations, and if so, what process improvements 

or technology upgrades were or will be implemented? Are these 

improvements or upgrades sustainable?

o Are states combining new UI administrative funds with other funds (e.g., 

UI contingency funds) to achieve their goals?

 What are states’ plans for spending UI modernization incentive payments, and 

what is the timetable for expending these funds? 
164

o Are states spending or planning to: (1) spend UI modernization payments 

on employment services administration? (2) improve the connection 

between the UI and workforce systems or the availability of reemployment 

services? If so, what improvements and services were or will be 

implemented? Are they sustainable?

o Are states spending or planning to spend UI modernization payments to 

pay benefits? 

D. The Research Plan

The final UI Recovery Act report findings, due the fall of 2011, will be based on a synthesis 

of:

 the results from the twenty, state UI teleconference interviews to be conducted with key 

UI administrative, tax, benefits and IT staff; 

 the findings from a NASWA-funded, fifty-state survey of UI administrators on the 

recession and states’ experiences implementing the Recovery Act;

 USDOL and NASWA information on state legislative responses to the UI modernization 

provisions of the Recovery Act;

 The results from a NASWA survey on the status of state UI information technology 

systems;

 USDOL data regarding recent national UI program performance; and

 USDOL information on the financial status of state UI trust funds. 

To prepare for the state teleconference interviews, the research team has developed individual 

state background studies. These studies record individual state UI program conditions and 

actions before and after the Recovery Act, and will inform the development of interview guides, 

customized by state, for use in upcoming teleconference interviews with the 20 selected states. 

The background studies incorporate information on each state’s: (1) UI program structure and 

economic environment, (2) historical UI program performance, (3) historical and current UI 

program financial conditions, (4) response to the fifty-state NASWA survey on the recession and 

the state’s experiences implementing the Recovery Act, (5) tax and benefits IT systems status, 
165

based on a recent NASWA-funded survey, and (5) legislative actions, if any, regarding the UI 

modernization provisions of the Recovery Act and to address trust fund solvency. 

Appendix I presents the common UI interview guide. This guide provides a framework for 

customized state interviews. Appendix II is the report for the pilot interview conducted with 

Florida UI officials. 
166

Appendix I. 

Common UI Interview Guide

1. Introduction

Confidentiality Statement: Before beginning the interview, I (we) want to thank you for agreeing to 

participate in the study. I (we) know that you are busy and we will try to be as focused as possible. Before 

we start, I want to let you know that though we take notes at these interviews, information is never 

repeated with the name of the respondent. When we write our reports and discuss our findings, 

information from all interviews is compiled and presented so that no one person is identified. Do you have 

any questions before we begin?

Introductory/Purpose Statement: Our phone call today is part of a national assessment of the impact of 

the American Recovery and Reinvestment Act of February 2009. The project is examining the effects of 

the Recovery Act on labor market programs that provide income support to the unemployed and labor 

market services designed to speed reemployment through improved job search techniques, better 

information about job openings, and training and other aspects of upgrading worker skills. The present 

interviews focus primarily upon the income support activities of unemployment insurance (UI) programs.

One aim of this assessment is to document the administrative challenges/problems confronting the states 

related to the recession that started in late 2007 but became much more severe during late 2008 and into 

2009 and 2010. The Recovery Act included provisions that affected the duration of UI benefits, weekly 

benefit levels, the tax treatment of benefits, the suspension of interest on trust fund loans, UI 

modernization, and UI administration. The implementation experiences and administrative challenges 

states encountered with these Recovery Act provisions are of great interest to our project. We also wish 

to identify procedures and practices that facilitate the more effective provision of UI benefits and related 

labor market services. 

We are interviewing a total of 20 states. We are here to learn about how your program was affected by 

the recession and how the implementation of the Recovery Act posed additional challenges. Our aim is to 

learn from your experiences, not audit or judge your program. The views you express will be kept 

confidential, and nothing we publish in this study will identify you or reveal statements you make to us, 

without your permission.

2. Personal Information

Please provide the following information:

Name:

Title:

State Agency:

Phone:

Email:
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3. Before the Recovery Act

The questions in this section seek to gauge how your State reacted to the increased workload brought on 

by the recession before the enactment of the Recovery Act.

1. When UI workloads surged as a result of the recession BEFORE THE RECOVERY ACT WAS 

IMPLEMENTED, what specific adjustments did your state make to UI operations? Please describe 

any process innovations or improvements, technology upgrades, etc. (possible cate gories for 

interviewers listed below) Also, how were the adjustments funded? Are they likely to remain 

permanent features of the state's UI program?

Initial claims 

process

Adjudication and 

fact finding 

process

First level appeals 

process

Continued claims 

process

Programming 

modifications

Increased 

documentation 

capabilities

Staffing 

adjustments 

(reassigned staff, 

rehired staff, new 

hires)

Added phone lines

Increased online 

claims filing 

capabilities

Other adjustments

If your state implemented any highly-effective process improvement(s), please describe in detail.

2. BEFORE THE ENACTMENT OF THE RECOVERY ACT most states saw a decline in performance 

due to the increased workload of the recession. In your state our data show...

How did officials in your state respond to the changes in performance? For example, did these 

changes in performance affect decision-making regarding UI operations? Or regarding 

implementation of the Recovery Act's UI spending provisions? [Did your state see similar 

changes in performance during the recession of the early 80s?] 

First payment timeliness

Nonmonetary determination time lapse

Nonmonetary determination quality -- separations

Nonmonetary determination quality -- nonseparations

Average age of pending lower authority appeals

Lower authority appeals quality
168

Average age of pending higher authority appeals

New employer status determinations time lapse

Facilitate reemployment

Overpayment detection

Tax Operations

4. $500 Million in Administrative Funding

The spike in UI claims brought on by the recession more than tripled the workload in some state UI 

agencies. Many states claimed they would need to reallocate funds or find alternative means of staffing to 

support this workload. In response to this crisis, the Recovery Act provided a total distribution of $500 

million for state administration of unemployment insurance. 

1. Your state's share of the UI administrative funds was ____________. How did/will your State 

use its share of the $500 million made available for UI administration under the Recovery Act? 

Please provide implementation details for both technology and non-technology investments. For 

each investment, please provide funding amount, when funds will be obligated, when funds will 

be expended. (Indicate the dollar amount associated with each use of the funds and provide more 

specific information.) 

2. Is your state combining its RA UI administrative funds with other funds (e.g., contingency 

funding) to implement these improvements or services?

3. Are the improvements your State made (or plans to make) with the Recovery Act UI 

administrative funds TEMPORARY or SUSTAINABLE improvements?

4. Has your state faced any barriers to spending the UI administrative funds (e.g., legislative,

operational, workload, staffing)?

5. EUC and EB -- Extensions

Since mid-2008, seven laws have affected state UI programs. The largest changes affecting benefits 

have involved implementation of extended benefits -- EUC and EB. When claimants exhaust their 

entitlement to regular UI benefits, they typically flow into the EUC program (in all states except Alaska) 

and then into EB. For practically all of 2009 and 2010, the longest combined maximum UI benefit duration 

has been 99 weeks (26 weeks of regular UI, plus 53 weeks of EUC and 20 weeks of EB). 

The first two laws (June 2008 and November 2008) were similar to the temporary or emergency UI 

legislation of earlier recessions. The emergency program they created and then extended -- termed 

EUC08 -- provided enhanced benefit duration to individuals who had exhausted regular UI. 

The 2009 Recovery Act extended EUC and expanded EB. Three subsequent laws (in November 2009, 
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March 2010 and April 2010) simply extended the maximum benefit duration and other provisions 

originally established in the Recovery Act. 

But the most recent bill, enacted July 22, 2010, did not extend two features of the Recovery Act (FAC and 

the temporary suspension of federal income tax), and gave claimants greater flexibility in choosing the 

base period for calculating their WBA. Those adversely affected under a calculation using a recent base 

period could continue to use their earlier base period for EUC if the change of base period caused the 

new WBA to be either $100 lower or 25% lower than the earlier WBA.

Two new potential EUC/EB administrative burdens were added by the most recent legislation: 

implementing retroactive EUC payments for persons who exhausted after June 2, 1010; and making 

WBA calculations for claims where the change of base period implies a large reduction in the WBA. There 

could also be administrative problems with the phaseout of the FAC and of the suspension of federal 

income tax, and these are addressed in a later section of the interview.

1. Did your state encounter any problems administering retroactive payments for the June 2008, 

March 2010, April 2010, or July 2010 federal legislation? Please provide details and discuss how 

your state addressed problems.

June 2008 March 2010 April 2010 July 2010

Computer 

programming 

challenges

Challenges 

relating to 

communication 

with claimants

Timeliness of 

benefits 

challenges

Quality of 

determinations 

challenges

Reporting 

challenges

2. Did the numerous changes in EUC intake dates and ending dates cause any administrative 

problems? If so, please elaborate.

3. Did your state encounter any challenges calculating the EUC WBA for any legislation before 

July 2010? 

Were there any problems calculating the EUC WBA caused by the July 2010 legislation? This 

legislation, the Unemployment Compensation Extension Act of 2010 (P.L. No. 111 -205), gave 

states the choice of one of four options in calculating the WBA for individuals entitled to EUC who 

qualify for regular UI in a subsequent benefit year but whose WBA would be substantia lly reduced 

(by at least $100 or 25 percent). In effect, the options permit the continued payment of UI benefits 

at the previous WBA. Has this provision presented administrative problems for your state? If so, 

please also discuss any state actions to address problems.
170

Yes, problem No problem

Prior legislation

July 2010 

legislation

4. Did your state encounter any problems identifying and/or collecting overpayments related to 

weeks of EUC and/or EUC WBA? If so, how did your state respond to the problems?

Yes, problems

No problems

5. Did your state encounter any problems calculating the EB WBA? If so, how did you respond to 

these challenges?

6. Federal Additional Compensation (FAC)

The Recovery Act created a new Federal Additional Compensation (FAC) program, which provides a 100 

percent federally-funded $25 supplement to all weekly UI payments. 

After the Recovery Act was enacted, many states reported the FAC would pose problems during 

implementation and require software modifications to distinguish the federal payments from the state 

payments. States expressed concern over federal reimbursement of the FAC and the long term impact of 

the FAC on their state's wage replacement ratios. 

The FAC was extended in subsequent legislation, three times. However, the most recent EUC extension 

(July 2010) did not extend FAC.

1. What challenges did your State face with the implementation of the FAC? How did you address 

these challenges?

Reporting challenges

Computer programming challenges

Withholding related challenges

Challenges related to communication with claimants

Challenges regarding claimant eligibility

Problem administering partial weeks of benefits

Problems with overpayment recovery

Problems getting reimbursement from federal government for FAC payments

Problems with experience rated charges to employers

2. What problems have you seen or do you foresee with the phase -out of the FAC under the July 

2010 bill? How are you addressing these concerns?
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7. Temporary Suspension of Federal Income Tax

The Recovery Act included a provision designed to increase the purchasing power of state and federal 

jobless benefits. Under current law, unemployment benefits are subject to federal income taxation. Under 

the Recovery Act, for tax year 2009 only, the first $2,400 paid in unemployment benefits are exempt from 

Federal income tax. States are encouraged to promptly update information provided to individuals about 

the taxation of UC so that individuals may make informed decisions about whether to elect (or cont inue) 

the withholding of Federal income tax from UC. 

This provision was extended in three subsequent pieces of legislation, but was not extended in the most 

recent legislation of July 2010.

1. Did your state experience any problems when this provision of law was not extended in the July 

2010 legislation, but was phased out?

8. UI Modernization: Alternate Base Period

The Recovery Act made a total of $7 billion available in UI Modernization incentive payments to states 

that include certain eligibility provisions in their state UI programs. For a state to receive one-third of its 

potential distribution it must first have enacted an Alternate Base Period (ABP) to ensure the last 

completed quarter of a worker's employment is counted when determining eligibility for unemployment 

benefits.

Several states reported the implementation of an alternate base period would cost additional 

administrative resources to update UI systems. Other states argued the enactment of an alternate base 

period would increase benefit payments significantly; leading to tax increases on employers or less 

solvent UI trust funds.

1. According to our data, your state has / does not have an alternative base period. 

IF IT DOES NOT HAVE AN ABP: Please describe any debate in your state on this issue as a result 

of the RA's modernization provisions. Then, skip to Q 26.

IF IT HAS AN ABP: Did you have an ABP before the RA or is it new? If you had an ABP prior to the 

RA, was it modified after the RA? Also, what impact has enactment of a new or modified ABP had 

on: 

overall annual benefit payments and benefit-cost rate?

employer taxes and tax rates?

The expenditure of administrative funds to update computer systems?

The expenditure of staffing resources to handle new workload?

Please explain/quantify your response(s). For example, do you know the total cost of enacting/modifying 

the ABP in 2009, and the first six months of 2010?

2. Has your state encountered any problems administering an ABP?
172

3. If your state enacted an ABP as a result of the Recovery Act's incentives, is there any 

discussion in your state about repealing the ABP now or in the future?

4. According to our data, your state has / has not received approval for the one -third UI 

Modernization incentive payments provided under the Recovery Act for implementation of an 

ABP. 

IF IT HASN'T: Why not? 

WHETHER IT HAS OR NOT: What have and/or will the funds be used for? For purposes of the 

trust fund (i.e., for benefit increases, repayment of federal advances, solvency, tax cuts)? For any 

of the following purposes? 

To pay for the costs of the UI Modernization Act provisions

Technology enhancements

Staffing increases

Reemployment Eligibility Assessments

Reemployment Services

Administration of public employment offices

9. UI Modernization: Additional Provisions

As previously noted, the Recovery Act made a total of $7 billion available in UI Modernization incentive 

payments to states that include certain eligibility provisions in their state UI programs. For a state to 

receive the remaining two-thirds of its potential distribution it must first have enacted an Alternate Base 

Period (ABP) and provide two of the following four eligibility provisions:

1.) Pay UI to part-time workers seeking only part-time work.

2.) Ease qualifying requirements for workers who quit because of certain family responsibilities (workers 

who leave work to escape domestic violence, to care for an ill family member, or who quit following a 

spouse who moves to a new job).

3.) Extend benefits to workers in state-approved training who exhaust regular UI.

4.) Add dependents' allowances to weekly benefits.

Several states reported the implementation of the additional provisions would expend substantial 

administrative resources to update UI computing systems. Other states argued the enactment of the 

additional provisions would increase benefit payments significantly, leading to tax increases on employers 

or insolvent UI trust funds. However, many states have since enacted the additional provisions required to 

receive the UI Modernization incentive payments.

1. According to our data, your State has / does not have two or more of the four "additional" 

modernization provisions in law. Specifically your state:
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IF IT DOESN'T: Will there likely be legislation in 2011? Please describe the political debate on 

these issues. Then, skip to Q 29.

IF IT DOES: Why did your state select the additional provisions it did? Will there be any additional 

legislation in 2011? Also, have you seen any evidence that the implementation of the new 

provisions has led to:

An increase in overall annual benefit payments, and benefit-cost rate?

Increased employer taxes and tax rates?

The expenditure of administrative funds to update computer systems?

The expenditure of staffing resources to handle the new workload?

Please explain/quantify your response(s).

2. According to our data, your state has / has not received its two-thirds UI Modernization 

incentive payments for implementing two of four of the "additional" provisions.

IF IT HASN'T: Why not?

WHETHER IT HAS OR NOT: What have and/or will the funds be used for? For purposes related to 

the trust fund (i.e., benefit increases, repayment of federal advances, solvency, tax cuts)? For any 

of the following purposes?: 

To pay for the costs of the UI Modernization Act provisions

Technology enhancements

Staffing increases

Reemployment Eligibility Assessments

Reemployment Services

Administration of public employment offices

Please provide a breakdown, if possible. Also, what is the timetable for expenditure and implementation 

of the funds?

3. If your state enacted "additional provisions" as a result of the Recovery Act's incentives, is 

there any discussion or legislation in the state to eliminate the new expansions now or in the 

future?

10. UI Modernization: Technology Upgrades

1. As a result of the UI Modernization funds provided in the Recovery Act, including both one -third 

and two-thirds funds, what technology upgrades (if any) is your state making to help better serve 

UI claimants? See list below. [Ask for additional information/supporting documentation, etc.] What 

is the timetable for expenditure/implementation?

Integrating and improving communication and/or data transfer of UI claimant data between the UI 
174

office and One-Stop or Wagner-Peyser MIS

Upgrading infrastructure (administrative system, case management and Internet access) to improve 

efficiency

Upgrading electronic claims processing

Upgrading adjudication systems

Upgrading tax filing systems

Upgrading appeals systems

Upgrading benefits systems

Upgrading wage reporting systems for employers

Other

11. Financial Condition of the Trust Fund

1. Our records show that your state --

2. What are your state's plans for paying interest on Title XII loans?

3. According to our data, you state has / has not enacted legislation to help improve solvency.

Specifically, your state 

____________________________________________________________________________________

____________________________________________________________________________________

__________________________________________

Is this correct?

What are your state's [other] plans for improving long run trust fund solvency?

4. Has the Recovery Act had any effect on the likelihood or timing of solvency legislation?

5. Has your state's solvency position affected decision-making regarding UI operations? Or 

regarding implementation of the Recovery Act's UI spending provisions?

6. Any discussions or plans of borrowing in the private securities market?
175

12. UI-ES Connection

1. Does your state have an REA program? If so, please describe what connections, if any, are 

made to the One-Stop system based on this program. Also, if you are familiar with your state's 

RES initiatives, please describe the connection, if any, between your UI system and the One -Stop 

system through this program. Specifically, did the UI-ES connection improve as a result of 

Recovery Act spending and initiatives in your state? Please discuss any technology upgrades 

made to facilitate the connection.

13. Conclusion

1. In your state's view, what have been the biggest successes and challenges associated with the 

implementation of the UI provisions in the Recovery Act?
176

Appendix II.

Pilot Florida Interview Report

1. When UI workloads surged dramatically before the Recovery Act was 

implemented, what techniques were utilized in your state in order to streamline UI 

benefits processes?

Florida faced a significant increase in demand for service as a result of the recession. In 

response, the state:

 made an aggressive effort to hire and train additional staff, with the number of staff 

increasing from 400 to 1,700. These were overwhelmingly new employees (as opposed 

to rehired retirees) hired on a temporary, contractual basis.

 extended hours of operation on weekdays, from 7 a.m. to 9 p.m., and established 

weekend hours of operation on both Saturdays and Sundays. Weekend operations are 

devoted to the processing of internet claims; informational calls are accepted only on 

weekdays.

 initiated flex hours.

 increased the number of phone lines by contracting out call center services for the 

overflow of calls. The new call center is temporarily leasing space and, as of the 

interview date, the contract was soon to be under consideration for renewal.

 developed an informational customer service email system for claimants in order to 

reduce phone calls and address a problem of incoming emails containing no identifying 

information. The e-mail system, in place since early 2009, includes identifier information 

from the claimant (name, phone number, contact address) and the claimant’s question. 

The e-mails are serviced by a callback team. The team identifies the relevant Florida 

agency/department to answer the question. To the greatest extent possible the responses 

are made from the local one-stop offices. The response to the claimant has a generic 

agency address so that the team member remains anonymous. The system has 

eliminated backlogs, and 90 percent of emails are handled within 2 hours. One current 

staffer wrote the code for and set up the system, and there was no special funding. The 

state had been looking to set up this system prior to the recession, but the recession 

forced it.
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Most of Florida’s process modifications were made to the initial claims and continued claims 

processes. For these processes, the state made computer programming modifications, increased 

documentation capabilities, made staffing adjustments, added phone lines, and increased online 

claims filing capabilities. For the adjudication and fact finding and first level appeals processes, 

the state made staff adjustments and added phone lines.

The only reallocation of resources between functions was a shift of resources from fact finding to 

adjudication. The state received a waiver from BTQ (benefit timeliness and quality measures) in 

order to facilitate this shift and it was in effect for 2009 only.

Training new staff was the biggest challenge the state faced in ramping up to meet the challenges 

of the recession.

When queried about the most significant innovations to UI processes, the state officials 

mentioned:

 the new claimant email system,

 putting more self-service online, with the capability for claimants to change their PINs 

and check claims, and

 a refinement in the mainframe computer system that enables the computer to identify new 

employers.

Additional information--Sixty percent of claimants are filing by internet and forty percent by 

telephone. Sixty percent certify weekly benefits by internet. The state’s phone system is able to 

separate calls between initial and continued claims.

2. Before enactment of the Recovery Act, most states saw a decline in performance due 

to the increased workload of the recession. How did officials in your state respond 

to the changes in performance?

Florida has experienced a 500 percent increase in claims activity, from 670,000 claims in CY 

2007 to 3.2 million in CY 2009. These data include initial claims, reopened claims, additional 

claims, and rescreenings. Florida officials mentioned that “rescreenings” (at the change of a 

quarter, searching wage records, both in-state and out-of-state, to determine a possible change in 

monetary eligibility) have been a continuing problem. Rescreening pertains to EUC and EB 

claimants who may be eligible for regular UI when the quarter changes. Such persons are to 

revert to regular UI if they are monetarily eligible (this was addressed in the July 2010 Federal 

legislation to hold harmless people whose weekly benefits would have been reduced)28. There 

were 358,000 of these rescreenings in 2007, and 1.4 million now. Currently, the state rescreens 

the universe of cases, and does not target industries most likely to result in out-of-state wages.

 

28 The Unemployment Compensation Extension Act of 2010 (P.L. No. 111 -205) gave states four options in 

calculating the WBA for individuals entitled to EUC who qualify for regular UI in a subsequent benefit year but 

whose WBA would be substantially reduced (by at least $100 or 25 percent). In effect, the options permit the 

continued payment of UI benefits at the previous WBA. 
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In 2007-2008, Florida was below the USDOL-defined “acceptable level of performance,” or 

ALP, in four measures of program performance. The state planned improvements in these areas, 

but was unable to implement them once the economy worsened. Now, the state is below ALP in 

8 measures, and a corrective action plan applies to each of the eight. [The state’s performance 

on lower and higher authority appeals time lapse has improved.] The state is not an “at risk” 

state, as defined by USDOL. The state’s corrective action plan will involve incremental in-house 

process changes, such as monitoring the performance of staff.

The Florida officials mentioned that given the quick hiring they had to do within the UI program 

to meet the demands of the recession, they knew performance would be affected adversely.

3. How did your state use its share of the $500 million made available for UI 

administration under the recovery Act? What technology upgrades were made or 

planned? Are improvements temporary or permanent?

Florida will use all its administrative monies ($32 million) to implement an integrated 

claims/benefits/appeals system, to include also adjudications, charging and BPC. For this 

purpose, the state will supplement the administrative funds with set-aside contingency funds. 

The state has not accessed administrative funds yet, but planning is on track. After seven initial 

vendor bids on the project, the state entered negotiations with two vendors and, at the time of the 

interview, was on the verge of announcing the chosen vendor. [Florida’s tax system is at the 

Department of Revenue, which houses a one-stop tax operation. The Department of Revenue 

began implementing a new, integrated SAP-based system starting in 1998. The UI part of the 

system was rolled out in March 2008.]

4. Did your state encounter any problems administering retroactive payments for the 

June 2008, March 2010, April 2010 or July 2010 federal legislation? 

Florida faced numerous challenges administering retroactive payments. For each legislative 

enactment, the state encountered claimant communication, computer programming, timeliness of 

benefits, quality of determinations, and reporting challenges. 

Letters were sent to all claimants with each enactment, but no matter how much information was 

presented, claimants had difficulty distinguishing the different tiers of EUC, and EB. The letters 

outlined options for applying for benefits (internet, mail, telephone) and were made available in 

Spanish and Creole as well as English. With every enactment and mailing, initial claims would 

rise, because some individuals receiving letters realized they re-qualified for a regular UI claim. 

IT staff members were able to automate the four EUC tiers promptly. This was the biggest 

achievement made in the IT area.

One of the biggest challenges with the “reachbacks” was the need to rescreen when the quarter 

changed. This entailed stopping in the middle of the claims processing to determine potential 

eligibility for regular UI benefits. Florida officials wondered whether something could be done 

in the ICON process to help states address this problem when the claimant had employment in 

more than one state. 
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Reporting presented another challenge as it was hard to separate stimulus from non-stimulus 

funding streams. Another challenge was that Florida’s IT system is not flexible enough to allow 

the state to “augment” benefits (this holds for most states, according to Florida officials). The 

push for augmentation comes from USDOL, which has encouraged states to augment any 

amount of eligibility remaining at the end of a tier by borrowing funds from the next tier, if 

necessary to make a complete weekly benefit amount (this occurs when partial weekly benefits 

have been paid). 

Florida officials were effusive in describing the extent to which they felt supported by Federal 

staff. They cited USDOL as “a good partner in this” and “very responsive,” and said USDOL 

“earned good marks” in helping with implementation. For example, USDOL hosted 

teleconferences with the regions, was quick to issue FAQs with their guidance, and offered 

“great support” on-site, visiting the state three times to look at state processes and make 

recommendations.

5. Did the numerous changes in EUC intake dates and ending dates cause any 

administrative problems? Did the state encounter challenges calculating the EUC 

WBA for any legislation before July 2010, or for the July 2010 legislation? 

The different intake and ending dates did not cause any difficulties for the Florida program. The 

state also had no problems calculating EUC WBA, because “there was nothing unique or new.” 

The weekly federal supplemental payment, FAC, was never included in calculations of WBA in 

Florida; it was administered as an add-on. 

6. Did your state encounter any problems identifying and/or collecting overpayments 

related to weeks of EUC and/or EUC WBA? 

No.

7. Did your state encounter any problems calculating the EB WBA? 

No.

8. What challenges did your state face with the implementation of the FAC, and how 

were they addressed? Do you foresee or have you had any problems with the phase -

out of the FAC?

For Florida, the FAC presented reporting and computer programming challenges, and problems 

with overpayment recovery and printing and mailing checks.

Florida’s biggest challenge lay with the state’s BPC web application, which had programming 

problems.

Regarding the printing and mailing of checks, the Department of Financial Services had to issue 

such a large volume of FAC “paper warrants, they charged the UI program an above normal 

amount to process them. Sixty (60) percent of claimants received the FAC via electronic funds 

transfer, 40% via paper warrants. A total of 9 million paper warrants have been issued since the 

FAC began. An additional cost is the postal rate of 37 cents a warrant. Florida is in a pilot phase 
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of implementing debit card technology. Eventually, debit cards will be a permanent feature of 

the state’s program. The state was heading in that direction prior to the Recovery Act. With 

debit cards, a future FAC would result in fewer costs to the state for postage.

Debit cards can have fees. Under the pilot, the first debit card transaction per month does not 

have a fee. Fees are charged when payments are serviced by out-of network institutions. Fees 

also arise from balance inquiries and partial withdrawals of benefit amounts. Fees are $3.00 per 

chargeable transaction.

Florida hasn’t had any problems phasing out the FAC.

9. Did your state experience any problems when the provision of law providing for the 

temporary suspension of federal income tax on benefits was not extended in the July 

2010 legislation? 

Florida did not have significant claimant activity on withholding, and had no problem with the 

phase-out of this provision of law.

10. Florida has not enacted an ABP or the “additional” modernization provisions. Why 

not? 

The legislature has been unwilling to adopt an ABP as a matter of cost and philosophy. Over the 

years, the business community has not supported legislation to enact an ABP. A bill has been 

introduced every year since 1998. One year, legislation passed the Senate (around 2002) but it 

has never passed the House. The principal argument is around cost: expanding benefits will add 

costs to the trust fund and add to insolvency. As the business community considers options for 

bringing the system toward solvency, they are discussing many options, including getting 

employees to contribute through a tax of some kind. 

In reporting the UI modernization provisions unfavorably, the Florida legislature focused on the 

increase in benefits payments or employer taxes that would result. They did not focus on 

administrative or staffing costs. Failed 2010 legislation, SB 2294, and its companion HB 741, 

would have implemented the alternative base period and the “part-time” and “compelling family 

reasons” provisions of the Modernization Act. These two latter provisions were included 

because they were considered to be the least costly based on estimates provided by the 

Department, and the Senator behind the legislation wanted to propose UI modernization 

legislation that he could say would be the least costly to Florida businesses.

11. Florida’s trust fund is insolvent. How is the state planning to address solvency?

First, an employer assessment was enacted this year to cover the interest charges on outstanding 

loans. It is a state tax add-on to the federal tax. The amount of interest owed for a year is 

estimated by economists employed by the legislature. Based on the estimate, which is completed 

in December of the year before the payment is due, the Department of Revenue calculates the 
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amount of the add-on in February of the applicable year and issues the bills to employers based 

on the prior year’s reported wages. Employers have until June to pay the additional tax. Second, 

to get at the bigger issue of trust fund indebtedness, the state is going to increase the taxable 

wage base in 2012 to $8,500 from $7,000. The state has a “trust fund balance factor” that 

automatically adjusts the tax rate when reserves are depleted. This factor has been modified to 

be more responsive and yield added revenue more quickly. Recovery is to occur over the 

upcoming three years whereas previously it was a four-year recovery period. The measures to 

hasten the recovery of the trust fund will not become effective until 2012. State officials could 

not say whether the state’s plans will fully address the solvency problem, and noted that it 

depends in large part on the extent of economic recovery in the state. The state has not 

considered borrowing in the private securities market to address solvency.

12. Florida has an REA program, and also received RES funds through the Recovery 

Act. Has the Recovery Act changed the connection between the UI and the 

workforce systems?

Florida started a Reemployment Eligibility Assessment program in 2005. State UI officials said 

there was no connection between the REA and RES programs. They mentioned that after an 

REA review, many of the claimants are sent to workshops that are funded by Wagner-Peyser Act 

funds. The REA grant started in 6 WIBs and is now in 16. 

Regarding RES, the state is targeting EB claimants as a stop-gap measure while the profiling 

model is retooled. The state’s profiling statistical model had become “weak” and the state was 

not using it when the recession hit. The state had devolved RES targeting responsibility to the 

One-Stops, who were performing in-person assessments of UI claimants to target RES. Once the 

recession hit, however, the One-Stops lacked resources to interview each claimant, and the state 

began targeting EB claimants as a stop-gap measure, since by definition they are dislocated 

workers. Generally, when any claim is filed, information is sent to the workforce system. EB 

cases are now marked via a special interface so they are easy to identify for RES. To learn more 

about this, the state officials suggested contacting Vicki Smith. A new profiling model currently 

is undergoing testing. UI staff members anticipate it will be rolled out in the workforce system, 

rather than the UI system. The profiling sections of TEGL 14-08 are driving its development. 

Florida officials say claimants in this recession are more motivated to receive training and other 

assistance. Many claimants are interested in retraining into a new field. With such a low WBA, 

unemployment is “not a comfortable state” for claimants. The 50-and-over age group is the most 

challenging, in part because they are overqualified for many open positions. Florida officials 

noted there was a significant amount of desperation in the populace.

State officials could not provide data on the number or percent of UI claimants enrolled in 

training, and suggested contacting workforce officials. The new integrated benefits system 

should help trace individuals better, and will provide more information back and forth between 

UI, workforce and the claimant.

The state has implemented TORQ, and UI officials suggested contacting Becky Rust for more 

information. TORQ, or Transferable Occupation Relationship Quotient, is a skills transferability 
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analysis tool that “links occupations based on the abilities, skills, and knowledge required by 

workers”. 

13. Pell Grants and the Administration’s training initiative for UI claimants

The state sends out 20,000 letters each month to persons with new initial claims but will soon 

post the information on the website instead. UI officials have asked the workforce liaison to 

provide information on the numbers of people in training as a result of the Pell Grant initiative 

and push for training for UI claimants. One of the problems encountered with the initiative was 

that claimants understood they had to apply to the Department of Education and meet the 

additional Pell Grant requirements, but they often didn’t realize they had to go to the one-stop to 

get training approved (in Florida, training is considered “approved” for UI purposes if it is 

authorized by the workforce system and meets other requirements). The state officials were 

unaware of any problems with the discretion afforded education counselors and financial aid 

advisors in implementing the Pell Grant.