Creation of Workforce Development Corp. State Program Spurred by Recession

By Mark R. Smith, EDITOR-IN-CHIEF

It's a good thing that Andy Moser hasn't forgotten his past. This year, he's hoping that his good memory will result in the creation of more job training programs in Maryland.
This story begins when Moser, assistant secretary of the Maryland Department of Labor, Licensing and Regulation's (DLLR) Division of Workforce Development, needed to find an alternative way to raise funds for the state as a result of the recession.
He remembered the time more than 15 years ago that Anne Arundel County faced a similar issue during the recession of the early '90s - which led Anne Arundel County to form the Anne Arundel Workforce Development Corp. (AAWDC) - which Moser used to run.
That brainstorm resulted in the introduction of House Bill 1526 by Sen. Thomas "Mac" Middleton during the recent legislative session. It passed, and the Workforce Development Corp. (WDC), a quasi-governmental entity that enables the state to acquire additional resources and operate as a business, is being established.
The approach isn't new, so much as unusual: Similar bills have passed in only a handful of states, including Massachusetts, Texas, Florida and California. But desperate times call for creative measures, and it seems to be gaining acceptance as an alternative mode of funding for governmental entities that are aiming to reduce taxpayer burden.

Recovery Funds and More
This story starts when Moser ran the AAWDC earlier this decade and found his funds down by "a couple $100,000" due to reductions in federal Formula Funds.
"But I didn't need to ask the County Council for the replacement money," he said, because of the groundwork that had been laid by former County Executive Bob Neall in 1993 that allowed the AAWDC to apply for federal grants that were dispersed in a competitive scenario (as opposed to a designated formula grant).
Applying for grants "solves the biggest issue, which was the state leaving lots of money on the table that it could have put to good use," Moser said, noting that even when the state has money from its budget, "doling it out is a tedious process that can take six months to a year."
What the passing of HB 1526 allows the state to do is acquire funds from foundations, pool resources and designate the money from competitive federal grants to a targeted destination so Moser's office can act promptly.
As for acquiring some of the Obama Recovery Act funds, "a big chunk of that money will be assigned on a competitive basis," he said. "But the stimulus money is a big, one-time shot; what happens when it's gone? That's when the WDC will serve as a stability mechanism."
The WDC will give Maryland an advantage over other states when competing for grants "because we now have the ability to respond quickly to any Request for Proposal, since the funding is not tied to state personnel systems and state budget cycle," Moser said, noting that it will also give the state the dexterity to pursue multiple grants simultaneously.

Spun Off to Success
While the approach of the WDC seems novel and isn't well understood by the masses, it isn't new. Just ask Bob Neall.
Neall, now president of Priority Partners in Glen Burnie, was the Anne Arundel County executive in the early '90s and started the job at a time when the economy was also struggling. So what did he do? He formed entities similar to the WDC by 1993, including the AAWDC and the Anne Arundel Economic Development Corp.
"Job training was set up in Anne Arundel County with federal grants and my predecessors chose to man it with contractual employees (as opposed to merit employees). But when a grant dried up, so did the job," he said, though that approach "had worked previously and seemed logical at the time.
"So when I explored my options, I found that some vital government functions like job training, economic development and a few housing programs were manned by workers who were not (technically) considered illegal employees in the eyes of the county charter," Neall said.
"So those people would have been the first to walk the plank and I wouldn't have had anyone to back them up," he said, "and if we had laid them off, I would have been neck-deep in litigation. And I probably would have lost."
Next came innovation, though Neall simply called the moves "sensible. We spun the agencies that were manned by those technically unlawful employees into nonprofits. That gave them the function and the grants became their revenue source."
Eventually, six county government departments were merged into three. Over time, the county reduced its workforce by 12%.
"But this was not done in a visionary way," Neall said. "It was a practical means of solving a problem. It was when we rewrote the county bylaws that we found the business community was interested in working with these new non-government entities."

Common Stakes
And grow fairly quickly, they did. For example, Neall said Anne Arundel Medical Center and North Arundel Hospital (now Baltimore Washington Medical Center) called the county when they needed radiation technologists. So Anne Arundel Community College started a program to train them.
"I went to the graduation and saw 29 people walk across the stage," Neall said. "It was a solution to a real problem. These people got jobs immediately."
That example is part of the reason why he thinks that vibrant manpower development programs can't be a function of the government. "You need to talk to the people who are doing the hiring and find out what they need," Neall said, "and bring all of the stakeholders together."
That's key, said Walt Townshend, president of the Baltimore Washington Corridor Chamber. "The WDC can provide both an impetus and nexus for generating resources from many different entities, both public and private.
"Through this entity, federal workforce and adult learning dollars can be pooled while attracting significant investment from the foundation community - investments the current system cannot access. In turn, additional resources will be made available to train the workforce that we need to make the economic recovery a reality."
Those resources would come in quite handy in Howard County, said Francine Trout, director of its Office of Workforce Development, to help disconnected youth via a program that is linked to the Workforce Investment Act so they can acquire a high school diploma or GED and enter the workforce.
"Our funds are limited, so if we can get more money toward that end, that would be great," said Trout, adding that her office is in the Mid-Maryland Workforce Investment Area (with Carroll County). Its most recent allocation was approximately $94,000 to assist approximately 23 youths since last July 1.

Checked Off the List
Observers in the nonprofit world, where money has been extremely tight this year, are especially welcoming of any financial infusion at the moment.
"What was interesting and good about the passing of this bill is that it will enhance operations for small service providers who offer job training to access funds that they may not otherwise be able to acquire," said Henry Bogdan, public policy director for the Maryland Association of Nonprofits.
There were unfounded initial concerns that the WDC would be a vehicle for the state to raise money for its own operations "instead of what it is set up to do," Bogdan said, "which is raise new funds for workforce development."
And, all can rest assured, that's the design. "This is one thing I wanted to do when I got to DLLR," Moser said, noting that the concept is probably noted tapped into more often due to the differing needs of various states.
"Some people are somewhat skeptical of entities like this because they don't understand them and it's outside their system," he said. "But it's an innovative approach and we can see it's going to work."