Congress restores 15 percent funds; required uses include support for local sector partnerships

By Bryan Wilson, December 21, 2015

As advocated by NSC, the Omnibus Appropriations Act passed by Congress and signed into law by President Obama, restores the Workforce Innovation and Opportunity Act (WIOA) Governor’s Reserve Funds to 15 percent. A Governor may use up to 15 percent of the state’s WIOA Title I allotment to support statewide activities at the Governor’s discretion. While WIOA authorizes 15 percent funding as did WIA, this is the first time since 2010 that Congress has not included language in the appropriations act modifying the statutory level. Among other uses, WIOA requires Governors to use these funds to provide assistance to “local areas by providing information on and support for the effective development, convening, and implementation of industry or sector partnerships.” (WIOA section 134(a)(2)(B)) NSC provides a toolkit on how states can use 15 percent funds and other funding sources and policies to support local sector partnerships. 

Sector partnerships are a proven strategy for helping workers prepare for middle-skill jobs and helping employers find skilled workers. An industry or sector partnership, as defined by WIOA is “a workforce collaborative, convened by or acting in partnership with a state board or local board, that organizes key stakeholders in an industry cluster into a working group that focuses on the shared goals and human resources needs of the industry cluster.” (WIOA section 3(26))

As described in NSC’s first ever 50-state scan of state sector partnership policies, 15 states currently provide funding to support local sector partnerships. Only two of these states (California and Kentucky) use Governors’ Reserve Funds. Prior to the reduction in appropriated levels, more states turned to this funding source, including Colorado, Illinois, Minnesota, New York, Washington, Wisconsin, and Wyoming.

Now that Congress has restored the Governor’s Reserve Funds to 15 percent, we urge states to use more of those funds to carry out the WIOA requirement of supporting local sector partnerships. Even before WIOA’s passage, many states recognized sector partnerships as an effective strategy for closing skill gaps and supported them with other funding sources, including state general funds and offsets through the unemployment insurance system. These state funds can supplement WIOA dollars and provide substantial resources to support multiple sector partnerships in strategic industry sectors throughout a state. 

States can also provide technical assistance and establish criteria for quality sector partnerships. For more information on these and other state policies to support sector partnerships see NSC’s, “Skills in the States: Sector Partnership Policy Toolkit.”