Report: Greater Minnesota’s share of workforce development funding is dwindling

The Center for Rural Policy and Development (CRPD) recently published the final report in a three-part series exploring the impact the tight labor market has on Greater Minnesota. The analysis examines a growing divergence in the amount of workforce development funding going to organizations in the seven-county metro compared to Greater Minnesota.

In their analysis CRPD examines three major sources of workforce development funding:

  • Workforce Innovation and Opportunity Act (WIOA) dollars, which are distributed through a formula to local workforce development boards across the state.
  • The Minnesota Jobs Skills Partnership (MJSP), which is a competitive grant program that has an oversight board and various statutory requirements for how to disburse funds.
  • The State Adult workforce fund which is a catch-all that includes a variety of workforce development programs.

The WIOA and MJSP programs are focused primarily on workers that have been laid off, and as the labor market has continued to improve in recent years money has been shifted to the State Adult programs. CRPD’s analysis shows this shift has left Greater Minnesota with a smaller share of these dollars. Data from the Minnesota Department of Employment and Economic Development (DEED) show that in 2014 roughly 47 percent of workforce training funds went to Greater Minnesota, but in 2018 that had fallen to 36 percent.
The CRPD report identifies two issues with State Adult funding: the use of direct appropriations and the scoring criteria used by DEED. According to CRPD’s analysis, in 2017-18 the Legislature directly appropriated nearly $30 million to specific organizations and $26.5 million went to organizations serving only the metro area. Furthermore, workforce development officials in Greater Minnesota told CRPD that DEED’s scoring criteria for State Adult funds distributed competitively favors dense populations and larger organizations with high levels of diversity on their board of directors, disqualifying many potential Greater Minnesota applicants.

You can find the entire three-part “Finding Work or Finding Workers” series on CRPD’s website.