Testimony of  Mr. Robert E. Brewer
Chairman, Southern Nevada Workforce Investment Board

Chairman Boehner, Chairman McKeon, Mr. Porter, and other distinguished Members of the Committee, my name is Robert E. Brewer and I am Chairman of the Southern Nevada Workforce Investment Board, including Las Vegas. I also serve on Nevada’s State Workforce Board, and on the Board of Directors of the National Association of Workforce Boards (NAWB), where I am Chairman of the Board Policy Committee. Finally, when I am not wearing my workforce board hat, I am the Director of Corporate and Administrative Services for SouthWest Gas Corporation here in Las Vegas.

I would like to thank Members of the Committee for inviting me to testify before you today about my views on H.R. 444, the Back to Work Incentive Act of 2003. While I will focus my remarks on the specific legislation, I would be remiss if I did not express my strong support for the locally-based, private sector led workforce investment system established under the Workforce Investment Act of 1998, and particularly, the vital role that local workforce investment boards play in the governance of that system. It is my hope that reauthorization of WIA and any new workforce initiatives, such as the Personal Reemployment Accounts envisioned in H.R. 444, will build upon the WIA system and continue to provide local boards with a clearly defined role in the design and oversight over such initiatives.

If I may take a moment, I would like to take this opportunity to thank Congressman Porter for introducing this important legislation, and for his support of our efforts here in Nevada in building a highly skilled workforce. This proposed initiative has great potential for providing our most vulnerable dislocated workers with additional resources that will help them secure new, gainful employment. It is an appropriate effort to assist the over 2 million workers who have lost their jobs over the last two years.

In Nevada, and in the Las Vegas area in particular, the unemployment rate increased in December to 5 percent, translating to over 50,000 people out of work, over 40,000 of whom were looking for work in the Las Vegas metropolitan area. While this number is still nearly a full percentage point below the national average, it represents a worrisome increase in the number of unemployed workers in our state and region.

The good news is that, in spite of the rise in unemployment recently, employment in Nevada has actually grown in all sectors but mining over the past year. Total employment in Nevada reached over 1 million last year, up 2.4 percent from the previous year. Statewide, key sectors such as construction, manufacturing, trade, government and services have continued to grow. The bottom line is that we must focus our energies on connecting unemployed workers with the jobs that are in demand.

H.R. 444 has the goal of helping the most vulnerable of these dislocated workers get back to work by providing them with additional flexibility, choice and assistance in their search for employment. The eligible recipients who have been profiled typically have higher levels of skills deficits and they will be able to benefit greatly from the new education and training opportunities that the personal reemployment accounts can provide. Finding replacement employment with wages that can support their families now and provide career paths with upward wage growth for the future will also benefit our communities as well.

In particular, I commend your efforts to make the personal reemployment accounts established under the bill a part of the workforce investment system by requiring that funds be accessed through the one-stop delivery system. I support the manner in which funding is distributed for the accounts, with 5 percent of the funding provided up-front to local workforce areas for program startup costs and administration, and the remaining amounts drawn down for individuals who are eligible in the form of personal reemployment accounts. I also support the appropriate role for States in determining eligibility for the reemployment accounts and in conducting the profiling that will further identify workers who are eligible for services. I do have several areas of concern that I think, if addressed, would significantly strengthen this proposal and ensure its successful implementation.

Role for Local Boards. Our WIA system and local workforce boards provide a ready mechanism for providing quality assurance and accountability that cannot be achieved through the States alone. My biggest concern with H.R. 444, as it is now written, is the lack of a clearly defined local role for local workforce investment board, i.e., in determining how the reemployment accounts will be implemented, in ensuring accountability over the accounts, and in the planning of how these additional resources will augment existing resources in the broader workforce investment system.

Although the proposal requires that personal reemployment accounts be accessed through the one-stop delivery system established under WIA, local workforce boards do not appear to have any authority over the implementation or oversight of this $3.6 billion in new funding that will be sent through the workforce system. As written, the bill would make local workforce areas financially liable for any mis-expenditures or misuses of funds after the fact, and provides local boards and local elected officials with very little authority up front to ensure that resources are used properly or wisely. I would urge you to provide the same levels of authority, responsibility, and accountability provided to local boards under WIA in this new legislation. There is an accountability infrastructure already established in WIA, why spend more money to set up something parallel?

There is another accountability feature that I would strongly urge the Committee to incorporate in H.R. 444. Build on the current local planning process by requiring the workforce boards to describe how personal reemployment accounts would be utilized as part of the broader workforce investment system to meet individual worker and regional economic needs. The local plans would describe safeguards, including how the local board would identify reputable, high quality service providers, and ultimately, would ensure the wise use of these funds at the local level. Local workforce boards are already doing this in WIA. This is a public stewardship responsibility that we are prepared to take on.

My third suggestion regarding local boards’ roles further strengthens program accountability once the program is initiated. It is aimed at simplifying and speeding up processes and ensures that quality assistance is available to eligible recipients as they exercise their flexibility and choice of return to work assistance. I urge you to utilize the existing WIA infrastructure and processes for accessing similar training and support services under the personal reemployment accounts. Doing so will provide greater assurance that recipients will identify and receive quality assistance, especially if local workforce boards and States are permitted to add to the lists of qualified service and training providers. In any case, local boards must have a role in the identification and approval of such providers to guard against abuses and to ensure quality and accountability within the system, particularly if they are to be held liable for these funds.

Personal Reemployment Plans. I also share your goal that individuals should be given flexibility to use resources under H.R. 444 to meet their individual needs. This is particularly important for the workers profiled as eligible for these services because they are the most vulnerable of the unemployed. There is no "cookie-cutter" solution for their individual needs. For this reason, we believe there is an important role for informed guidance in this process.

We have spent the last five years building the public workforce system and I believe that local one-stop systems, in response to the policies set by local workforce investment boards, have developed a systematic approach to guide unemployed individuals through the WIA services presently available. I would urge that you underpin the flexibility given to the individual in the bill by requiring that helpful occupational guidance and assistance be available to each worker to help him/her make choices based on good information and a complete understanding of the full range of resources and opportunities that are available to them. As such, I recommend that you modify the proposal to require that each individual accessing a reemployment account develop a personal reemployment plan as a condition of eligibility for the account. Quality occupational information and career counseling should be provided to individuals as they decide how to manage their accounts. This process should not require adherence to a rigid plan of action by the individual, but should provide workers with an understanding of the wide range of occupational and support services available to them. Having workers understand pathways to more upwardly mobile career paths, including those that may include skills training, will lead them to wise use of their reemployment account resources.

Authority to Combine Personal Reemployment Accounts with ITAs and other WIA Services. I do have one final suggestion. Under H.R. 444, individuals who choose to receive a personal reemployment account are prohibited from receiving any further services, except for core services, through the WIA system for one full year after receipt of a PRA. While this may be appropriate for those individuals who cash out their account, or possibly even for those who use their PRA for the purchase of an automobile, this provision ends up being too restrictive, and potentially punitive, for those who choose to receive services through the reemployment accounts. Again, I remind you that those eligible to receive personal reemployment accounts are the most vulnerable of the dislocated workers, many of whom have been profiled as a result of inadequate education and skills levels. They are likely to need longer-term education and training services in order to be competitive in today’s job market. Due to this, I would ask that your allow local boards to determine packaging of PRAs, ITAs, and other services under WIA for individuals who are in need of such assistance, with the exception of those individuals who do "cash out" their reemployment accounts.

Chairman Boehner, Chairman McKeon, Mr. Porter and other Members of the Committee, again, I commend you for your leadership in our nation’s workforce investment efforts, and on your leadership in the introduction of this important legislation. Here in the Las Vegas area, these H.R. 444 resources, in combination with those provided through the Workforce Investment Act, would provide us with a greatly enhanced ability to help the over 40,000 workers who are searching for employment. Nationally, H.R. 444 has the potential of providing much needed additional resources for the dislocated workers and for our workforce investment system.

The country’s workforce investment boards stand ready to take on the responsibility for this initiative as a part of our roles and responsibilities over the workforce investment system. I urge you to provide the local boards with the clear authority to package these resources in ways that will both benefit the workers they are intended to help. In doing so, it will enable our local boards to focus training on the key sectors of our local economy that are in high demand and that provide workers with the best jobs and career growth opportunities.

I thank you for this opportunity to address you today and I am ready to answer any questions you may have with regard to my remarks.