WASHINGTON — After a slow start, states struggling with record unemployment are scrambling to create and expand subsidized jobs programs that could employ thousands of poor adults, teens and even disabled people.
They're running out of time, however, because nearly $4 billion in unspent stimulus money that would finance the efforts is set to expire on Sept. 30. As a result, many are pushing Congress to make the remaining funds available for another year.
Unless that happens, many states and local governments won't have enough time to push new jobs programs through, and others will face cutbacks. In California, job programs in San Bernardino and Los Angeles counties already have imposed cutoff dates for new job placements because of the Sept. 30 deadline.
"That's been a concern from the start," said Amy Rynell, the director of the Chicago-based National Transitional Jobs Network. "States are worried about ramping up, getting an infrastructure in place to launch a program and then, essentially, having the rug pulled out from under them in September."
Without the extension, some of the most hard-to-employ, job-needy Americans will miss out on valuable work experience.
"It would just be unfortunate if we had the ability to use these funds for subsidized jobs and we just ran out of time, mostly for reasons beyond the states' control. To lose that opportunity would really be tragic," said Sheri Steisel, federal affairs counsel for the National Conference of State Legislatures. She's lobbying Congress to include the funding extension in a jobs bill being crafted in the Senate.
The subsidized employment program pays most of a worker's salary with state or federal funds for a specified length of time. This makes the worker less expensive and more attractive to prospective employers. Maryland's program, which now employs 87 people statewide, placed Baltimore residents Jessica Distance and Eugene Laster in jobs with the state human resources department through June 2011.
The idea is to provide much-needed income now and work experience that could help them land permanent jobs later.
With limited job skills and dim employment prospects in the sour economy, Distance, 25, and Laster, 34, are typical of program participants nationwide.
Distance was on welfare before she started her job. She still lives in a homeless shelter with her four daughters, while waiting to move into an apartment. Laster, who bounced from one group home, foster home and shelter to another after his mother died when he was 12, had been unemployed for more than a year before he entered the program.
After both completed seven weeks of non-paid training, they have jobs helping people apply for public assistance — the assistance they once depended on.
"I still can't believe I'm actually on the other side of the desk this time," Distance said. "It's so wonderful. I feel blessed."
Laster also sees himself in the people he assists.
"When I help them, I'm helping me," he said. "I really feel where they're coming from. When I interview these people, I tell them, 'don't get discouraged. And don't be ashamed.'"
Maryland's program, like those in 20 other states and the District of Columbia, is funded through the $5 billion Temporary Assistance for Needy Families Emergency Contingency Fund created by the stimulus bill. The TANF program replaced "welfare as we know it" in 1997 by requiring recipients to seek employment in exchange for their public assistance benefits.
The TANF emergency fund was created to help states pay for increased welfare spending and larger caseloads resulting from the current recession. For every additional dollar that states spend on certain welfare services, the fund will pay back 80 cents. To date, the money has gone for basic cash assistance and short-term emergency benefits.
As the ranks of the unemployed continue to swell, more states want to use the money for subsidized job programs that hire TANF recipients and TANF-eligible adults for up to a year.
"Absent something like this, many of these people aren't going to be able to succeed in finding work," Rynell said.
Because state budgets have been decimated by the recession, many states can't provide the 20-percent funding match needed to access the 80-percent reimbursement. In fact, the Congressional Budget Office has estimated that states will draw only half the fund before it expires.
As of Jan. 27, $1.2 billion has been awarded from the fund since the money became available in 2009, and of that amount, $121 million has been used for job programs. States were slow to seek the money initially because many state legislatures adjourned shortly after passage of the stimulus bill.
In addition, the Department of Health and Human Services didn't make application forms for the money available until July, said Elizabeth Lower-Basch, a senior policy analyst at the Center for Law and Social Policy.
It took a novel funding approach by Los Angeles County to overcome these problems and rekindle national interest in starting employment programs. Unable to get cash from the state, county officials asked for the cost of supervision and training for thousands of employees to count as the 20 percent funding requirement for the federal match.
HHS agreed and affirmed the funding formula in a December conference call with state welfare directors. The clarification has prompted states such as Illinois, Wisconsin and New Jersey to consider new jobs programs, said Rynell, of the transitional jobs network.
"If we weren't allowed to use the cost of supervision and training as our match to the federal dollars, we'd have to find state dollars to do it. And that wouldn't be easy," said Linda Martin, who heads the family assistance division of the South Carolina Department of Social Services.
South Carolina's new $5 million jobs program launches this month and will employ as many as 1,500 low-income adults. They'll work 20 to 30 hours for up to six months for at least the minimum wage, which currently is $7.25 an hour.
Georgia will use the same funding formula for its $61 million jobs program, which begins in March. It will hire as many as 5,000 welfare recipients and welfare-eligible adults. Like South Carolina, the Georgia jobs will also pay at least minimum wage and provide at least 30 hours of work for up to six months, said Donna Gunter, TANF unit manager for the Georgia Department of Human Services.
Georgia's also considering tapping the emergency fund for a subsidized summer jobs program for 15,000 low-income teens.
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