	Background

Technological advances continue to transform the U.S. workforce, and  workers must improve their skills to meet employers’ changing needs. Nearly Half of All States Used Employer Taxes to Fund Their Own Employment Placement and Training Programs, and States Most Often Provided Job-Specific Training

Twenty-three states reported using employer tax revenues in 2002 from a  variety of employer taxes to fund their own employment placement and  training programs. States most often provided job-specific training for  workers. These states reported spending a total of $278  million on their workforce programs. Most States with Employment Placement and Training Programs Funded through Employer Taxes Reported Some Coordination with Federal Workforce Programs

Twenty-one of the 23 states with employment placement and training  programs funded through employer taxes reported some coordination  with federal workforce programs in 2002. The most common coordination  activity reported by states was the joint promotion of state and federally  funded workforce programs through outreach or referrals (see fig. Other state programs coordinated with many  federal partners. 12). In addition, some state officials  noted that coordination had improved service quality and availability. However, none of the states used sufficiently rigorous  research designs to allow them to make conclusive statements about the  impact of their programs. Almost All States Reported Regularly Assessing the Performance of Their Programs in 2002

Twenty-two of the 23 states with employer-funded employment placement  and training programs reported assessing the performance of their  programs in 2002. Concluding Observations

To help close the gap between employer needs and employee skills, both  federal- and state-funded workforce programs are providing skills training  to employees and helping employers find qualified employees. However, the impact of these programs is unknown because states  have not adequately studied them. Because these programs contribute to  our nation’s ability to provide comprehensive workforce development  services to meet employers’ needs for skilled workers, it would be helpful  to have information on the impact of these efforts. Appendix I: Objectives, Scope, and Methodology

We were asked to determine (1) How many states use employer taxes to  fund their own employment placement and training programs, and what  type of services do they provide; (2) The extent to which these state  employment placement and training programs are coordinating with  federal workforce programs; and (3) How states are assessing the  performance of their employment placement and training programs.
Why GAO Did This Study

As technological and other advances transform the U.S. economy, many of the nation's six million employers may have trouble finding employees with the skills to do their jobs well. Some experts indicate that such a skill gap already affects many employers. To help close this skill gap, both federal- and state-funded programs are providing training and helping employers find qualified employees. In 2002, the federal government spent about $12 billion on workforce programs, and there are various studies on these programs. States also raised revenues in 2002--from taxes levied on employers--to fund their own workforce programs. However, little is known about these state programs. GAO was asked to provide information on how many states use these employer taxes to fund their own employment placement and training programs, what services are provided, the extent to which these state programs coordinate with federal programs, and how states assess the performance of these programs.

What GAO Found

Twenty-three states reported using employer tax revenues in 2002 to fund their own employment placement and training programs, and states most often provided job-specific training for workers. States used various types of employer taxes and reported spending a total of $278 million to address state-specific workforce issues. States invested in a variety of industries, but manufacturing was the most frequently targeted. Most states with employment placement and training programs funded through employer taxes reported some coordination with federal workforce programs in 2002. States were most likely to coordinate with federal workforce programs by jointly promoting programs through outreach and referrals. According to most state officials, coordination with federal workforce programs raised awareness of their state-funded programs. Some state officials also reported that coordination improved the quality and availability of services. Twenty-two of the 23 states reported assessing the performance of their programs in 2002. However, none have used sufficiently rigorous research designs to allow them to make conclusive statements about the impact of their programs, such as their effect on worker wages or company earnings. Because these programs contribute to our nation's ability to provide comprehensive workforce development services to meet employers' needs for skilled workers, it would be helpful to have information on the impact of these efforts. The Department of Labor has valuable resources that might help states evaluate the impact of their programs.