House Committee Passes TANF Hike, Workforce Training Program

By Whitney Downard

Indiana ended 2022 with more than 136,000 job openings partly because hundreds of thousands of Hoosiers don’t have the skills needed to join the workforce.

According to committee testimony last week, 80% of Hoosiers with disabilities are unemployed along with an estimated 60% of impoverished adult Hoosiers receiving benefits from the Temporary Assistance for Needy Families program. Both populations could benefit under a new bill that would help connect underskilled employees to companies.

“This is an untapped workforce pipeline that could really fill this workforce shortage,” said Hannah Carlock, the director of public policy with The Arc of Indiana. “This (proposal) would provide job readiness training and help low-income Hoosiers and individuals with disabilities get connected to the labor force and help employers take on workers who have little to no work history.”

Carlock, whose organization advocates on behalf of Hoosiers with disabilities, said myths surrounding disabled employees make employers hesitant to hire.

House Bill 1160 includes a pilot program for adult students, an incumbent worker training program and the first TANF eligibility increase in over three decades.

“I think we all know that we have a workforce shortage; we have a lack of workforce participation,” bill author Rep. Ed Clere, R-New Albany, said. “We have these populations, especially people with disabilities, who would love to have the opportunity to be part of the workforce.”

Using TANF for workforce training

Clere’s bill proposes creating a program to collaborate with private companies for workforce development, with a focus on training Hoosiers using TANF and Hoosiers with disabilities.

“Incumbent worker training, for those who aren’t familiar with the term, refers to scaling up people who are already working and a particular job. Historically, we viewed that on a company-by-company basis or employer-by-employer basis and that is very limiting,” Clere said. “What we’re trying to do… is create an ecosystem (to) facilitate the movement of workers among companies.”

Clere described two hypothetical companies: Company A and Company B. Company A has many low-skill positions but no place for employees to move upward, leaving them stuck. Under this scenario, Company A has no incentive to train up their workforce because they’d leave for another company.

Meanwhile, Company B has open positions for a higher-skilled, better paid workforce that builds upon the skills of Company A, but no one qualified to do the work.

Under the program, the Department of Workforce Development would identify low-skill workers at Company A with the potential to train up to fill an open position at Company B. Then Hoosiers on TANF and Hoosiers with disabilities – many of whom aren’t in the workforce – would be matched with the now open jobs at Company A.

“With this ecosystem concept, what we’re trying to do is create a win-win situation,” Clere said. “(This) has the ability to help address the workforce crisis while also getting people into the workforce who have not had the opportunity.”

Clere withheld an amendment in committee outlining employer reimbursement under the workforce training program and other stakeholder details, citing the need for additional work. TANF, under federal guidelines, can reimburse employers to cover the salaries of recently hired TANF recipients fully for the first month and partially for the next five months.

According to the fiscal accompanying the bill, funding for the employer program could come from Next Level Jobs Employer Training Grants in addition to TANF.

Eligibility changes, benefit increases

Clere told the committee that eligibility guidelines and benefit increases were essentially identical to the Senate version, in which anyone in deep poverty, defined as 50% of the federal poverty line, would be eligible. Currently, Indiana’s TANF eligibility cutoff is 13-16% of the federal poverty level, depending on family size.

That bill, and Clere’s, also include the first TANF increase since 1988 with annual adjustments similar to Social Security to keep up with inflation.

Indiana receives roughly $206 million annually from the federal government for TANF but regularly ends with more than $50 million leftover. Indiana has some of the strictest eligibility standards in the country and spends just 5% on direct benefits to Hoosiers.

State governments have been criticized for using TANF as a “slush fund,” because the program’s federal flexibility allows states to spend the money on a variety of programs such as child care, adult education and more.

Indiana spends just over one-third of its funding, a maximum of $61.8 million, on the Child Care and Development Fund (CCDF), which provides childcare vouchers to impoverished families, according to a December 2022 report from the Congressional Research Service. The largest portion of Indiana’s spending, 42.4%, falls into the “other” category that doesn’t include: basic assistance, child care, education/ training, refundable tax credits, pre-K, child welfare, administration or emergency and short-term benefits.

Other provisions of the bill

The workforce training bill also includes an Education and Career Support Services pilot program that would fall under the purview of the Commission of Higher Education and fund wraparound services, but not tuition, for students.

Many schools currently offer career counseling services but other wraparound services – such as transportation, housing assistance and childcare – aren’t frequently available.

Mary Jane Michalak, the vice president for government relations at Ivy Tech Community College, said current services help all students, but were especially beneficial for students of color struggling to balance parenting obligations with school.

“We found that students who are engaged in our career activities are retained at a rate that is 16 percentage points higher than students who are not engaged,” she said.

The bill also removes the TANF family cap, in which a family already receiving assistance cannot get additional assistance if another child is born, and also encourages families receiving assistance to receive family planning counseling.

The real challenge for the bill lies ahead. The committee voted unanimously to send the bill to House Ways and Means, which has repeatedly blocked TANF bills under a previous chair.

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