| TO: | Honorable Mark Strama, Chair, House Committee on Technology, Economic Development & Workforce |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | HB2745 by Isett (Relating to a certification program to provide job skills training. ), Committee Report 1st House, Substituted |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2010 | ($27,293,139) |
| 2011 | ($12,814,637) |
| 2012 | ($12,969,022) |
| 2013 | ($14,498,774) |
| 2014 | ($14,716,852) |
| Fiscal Year | Probable (Cost) from General Revenue Fund 1 |
|---|---|
| 2010 | ($27,293,139) |
| 2011 | ($12,814,637) |
| 2012 | ($12,969,022) |
| 2013 | ($14,498,774) |
| 2014 | ($14,716,852) |
The bill would amend the Labor Code relating to a certification program to provide job skills training. The bill requires the Texas Workforce Commission (TWC) to create a Texas Ready to Work Certification Program. Under this program the agency shall provide job skills training to individuals receiving unemployment benefits and individuals identified by TWC as individuals who will soon enter the workforce. The bill requires the agency to develop or adopt an assessment methodology to determine a program participant’s level of proficiency and determine appropriate facilities and settings at which to conduct an assessment. The TWC shall provide Internet-based instruction to assist each program participant in achieving proficiency in the skills for each included occupation.
This bill takes effect immediately if it receives a vote of two-thirds of all the members elected to each house or if the Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2009.
According to the analysis provided by TWC the estimated costs for the Work Readiness Certification assessment are as follows: $4,009,960 (Work Readiness Certification/Assessments for Unemployment Insurance (UI) Claimants + $871,580 (Work Readiness Certification/Assessments for High School Seniors) + $774,699 (Staff Time for Assessments) + $15,395, 700 (Testing Center Site License/Renewal Fee) + $6,241,500 (Remediation Site License/Renewal Fee) = $27,293,139 in FY 2010.
For FY 2011 TWC estimates: $3,953,520 (Work Readiness Certification/Assessments for U.I. Claimants + $1,120,820 (Work Readiness Certification/Assessments for High School Seniors) + $805,297 (Staff Time for Assessments) + $6,935,000 (Testing Center Site License/Renewal Fee) + $6,241,500 (Remediation Site License/Renewal Fee) = $12,814,637.
TWC assumes that Work Readiness Assessments will be offered to all UI claimants who are required to come into a workforce center to receive Rapid Reemployment Services (REES). It is assumed that approximately 66 percent of these claimants will request the assessment. Based on these assumptions, TWC estimates the total number to receive assessments will be 200,498 in FY10 (Estimated at 66% of the total REES) at a cost of $20 per assessment ($15 per assessment and $5 per certificate). (200,498 x 20 = $4,009,960 for FY10); (197,676 x 20 = $3,953,520 for FY11).
TWC assumes Work Readiness Assessments will be offered to high school seniors who will not attend college. Based on the total eligible population of all seniors, TWC estimates 124,514 will not enter college and approximately 35% or 43,579 to take assessment. (43,579 x $20 = $871,580 in FY 10; and 56,041 x $20 = 1,120,820 in FY 11).
According to TWC there will be staff time associated with pre and post-assessment interviews/monitoring based on the assumption that the agency conduct pre and post assessment interviews at an average of 10 customers at a time. Estimates are based on an average of 2 hours, at a cost of $15.87/hour. Total cost include = $774,699: $636,380 for staff time spent on UI claimants receiving assessments and $138,319 for staff time spent on seniors receiving assessments.
For the purpose of this analysis, TWC assumes each assessment site will require a license agreement to be signed by each site and will have a set up fee of $100. The costs assume that TWC will establish licensed assessment sites at the 156 full service workforce centers in Texas and at 1,231 public schools, for a total of 1,387 sites. Total costs for implementation: 1,387 @ $10,000 = $13,870,000; 1,387 @ $1,000 = $1,387,000; and 1,387 @ $100 = $138,700; totaling $15,395,700 for FY10 and $6,935,000 for FY2011-14.
The cost estimate also assumes that TWC will establish licensed remediation education/training centers at the 156 full service workforce centers and at 1,231 public schools. TWC estimates the initial cost at $6,241,500 for FY 10-12 and $1,387,000 in FY14.
| Source Agencies: | 320 Texas Workforce Commission
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| LBB Staff: | JOB, JRO, MW, NV
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