A proposal to establish an employment training fund by taking 5 percent from income from the Unemployment Insurance Reserve Fund sparked some lively discussion among members of the Employment Security Advisory Council.
But people shouldn't get too excited about the fund this early because unless labor and management can agree on the idea, the next council meeting won't be held until early next year, maybe in the middle of the legislative session. By then it would be too late and would have to wait until 1993.The proposal was presented Thursday by Carol Berrey, director of the Office for Job Training for Economic Development in the Division of Business and Economic Development, as one way to increase the average Utah wage to the national level by 1995. That is one of the cornerstones of Gov. Norm Bangerter's economic blueprint for Utah.
Berrey said the proposal asks that $4 million be taken from income to the Unemployment Insurance Reserve Fund, which is projected to be $77 million in 1992. The fund would be administered by the division.
The proposal ties the fund to the growth of the work force and contains a cap so the fund doesn't become too large. She said that for every $6 pulled from the unemployment insurance fund the state provides $1 to pay for administrative costs so the entire $6 goes for training.
Establishment of a training fund reduces the need for speculation about future industry needs, increases program flexibility to meet industry needs and enhances the efficiency of the training system in the state.
Berrey said for every $1 taken from the training fund, $3.75 will be returned to the state in various forms because people will be off welfare and start paying taxes.
Many of the council members agree that more is needed for training, but several believe the existing programs should be consolidated to eliminate duplication so the state gets the most for its money.
State Industrial Commissioner Tom Carlson said the state needs to look at all training needs and combine them, including the training provided by Salt Lake Community College. He said the money will have to be replaced to the unemployment insurance fund and the method will have to be worked out.
The proposal sparked a discussion between Larry Bunkall, Utah Manufacturers Association president, and Allan Ayoub, director of employment programs for the Utah AFL-CIO.
Ayoub generally agrees with the proposal, especially if the money is used for training dislocated workers, but Bunkall questioned the need for employers to pay for additional training.
Bunkall said employers have been working with labor to provide a "social program" by providing money to cover unemployment benefits already and he objects to saddling business with additional costs. "We could have a major clash if labor expects business to pay more," he said.
In an effort to help council members understand the Unemployment Insurance Reserve Fund's status, William Horner, director of the Labor Market Information Division of the Utah Department of Employment Security, said as of June 30, the fund had a balance of $298.4 million.
The balance was well within the minimum actuarial sound fund level of $250.6 million and the maximum level of $334.7 million. Although benefits paid in the first seven months of 1991 are $8.3 million higher than the same period a year ago, Horner said the reserve fund is continuing to build as intended.
Employer contributions to the fund in the first seven months were $47.8 million compared with $53.1 million, but interest earnings on the money through August 1991 were $18.9 million compared with $15.8 million in the same period a year ago.