Workforce Training = Job Creation
Since my first year in office, I have worked to ensure that Mississippi has the most attractive business climate possible and that we focus on creating new, better-paying jobs. Through recent legislation such as Momentum Mississippi, comprehensive tort reform, streamlining Mississippi’s workforce development system, and easing the payroll tax on Mississippi employers, we have laid the foundation for competitiveness and economic growth.
A huge slice of the economic development pie is how we train our workers. Last year, the Legislature passed the biggest overhaul of our state workforce development and job training programs ever. We’ve cut payroll taxes on our state’s employers by 25 percent, while doubling state support to community colleges for job training. The result: In its first year, the number of clients the reorganized department placed in jobs increased by 35 percent over the previous year.
2004 Workforce Training Act = Job Creation
With support from the Legislature, we reformed our workforce training programs by passage of the Mississippi Comprehensive Workforce Training and Education Consolidation Act of 2004. Its purpose was to create an aligned, demand-driven public workforce training system that sustains, develops, and grows new jobs for Mississippi workers. We also wanted to provide employers an available, consistent, and skilled workforce, and offer a clear path to individuals seeking their first job or a better job.
The legislation gives more of the workforce development and training franchise to community colleges, which have a proven record of performance in this area. The programs of the Mississippi Employment Security Commission have been transferred to the executive branch of government, allowing greater coordination and utilization of funds for workforce training and development programs and fostering a better working relationship with the Mississippi Development Authority, our state’s primary economic development agency. Consolidating workforce-training activities within the state will result in a more efficient and cost-effective method for delivery of workforce-training activities and education while eliminating duplicate activities.
In this knowledge-based economy and world market, Mississippi’s businesses have three choices: They can innovate; they can emigrate; or they can evaporate. For our new or existing businesses to be successful they must be competitive, which means they must innovate and increase their productivity. Better skilled workers can use technology to improve productivity and successfully compete on quality and cost. That’s crucial. Improving our workforce and job training programs is something on which the state is taking the lead right now.
We must embrace lifelong learning in Mississippi, and we’ve already started. Education begins before kindergarten and continues for the rest of your life. Helping our working people continuously upgrade their skills is essential for survival in our modern economy.
Cut Payroll Taxes = Job Creation
This year, knowing that small businesses in Mississippi are responsible for more than 80 percent of all new jobs created in our state, we cut payroll taxes on employers by 25 percent. This was an important step.
Unemployment taxes on employers go into an unemployment trust fund and the money is then used to pay unemployment benefits. Over the last 20 years, because of flaws in the formula, the state has collected way too much in unemployment taxes than is needed to pay unemployment benefits. The state’s unemployment reserve fund has grown to $684 million, despite the fact the state generally pays out only $150 million a year in unemployment benefits. Yet, the fund continues to grow.
Without correcting this, every business, large and small, pays more unemployment taxes than necessary. While none of this excess money can be used for state government costs, we can and have reduced the tax. And, as 23 other states have done, we have redirected a portion of the new formula to fund additional workforce training programs that help keep unemployment low.
For example, without restructuring the unemployment tax formula, Mississippi’s unemployment tax would have automatically increased by $35 million this year; this is $35 million that businesses could have used to create new jobs.
Senate Bill 2480 is not only preventing an unnecessary tax increase this year, it will actually decrease the unemployment tax burden of businesses over the next several years. The fund is large enough to do this while ensuring we maintain ample funds to pay benefits.
As an additional component, the new law creates a Workforce Training Enhancement Fund to provide about $20 million a year for workforce training activities to supplement community and junior college workforce training dollars.
With this new money supplementing current appropriations, we can have one of the nation’s best programs for attracting and keeping better, higher paying jobs, and providing our workers the most advanced training possible.
More and Better Jobs
I am pleased that by streamlining our state workforce development and job training programs and cutting our payroll taxes by 25 percent, we were still able to double state support to community colleges for job training.
Economic development is not possible without a strong commitment to lifelong learning. Let’s continue to promote win-win situations for both businesses and workers.
Governor Haley Barbour
P.O. Box 139 Jackson, MS 39205
Phone: 601.359.3150 Fax: 601.359.3741