Using ARP Funds To Invest in Evidence-Based Workforce Solutions: 7 State Actions and Options
Recognizing there may be a skills mismatch between current job openings and those looking for work, policymakers are prioritizing job training and skills improvement in information technology, healthcare, manufacturing and other high-demand fields. As outlined below, states are taking the following steps to leverage time-limited American Rescue Plan funds to address pressing workforce needs and priorities.
1. Convene Decision-Makers Across Government
Several states have convened stakeholders from across and outside government to set spending priorities and develop decision-making frameworks to address their most pressing challenges.
- To address the negative impacts of the pandemic, Colorado HB 1330, enacted in 2021, authorized the use of ARP funds to address the decline in enrollment in institutions of higher education, high rates of job loss and continuing unemployment and disruption to the workforce. The legislation also established the Student Success and Workforce Revitalization Task Force and charged it with submitting recommendations and a final report to the legislature and the Colorado Commission on Higher Education. In January 2022, the task force released a report outlining an array of strategies, including innovation and scaling partnership grants, more transparent post-secondary and workforce data, and new statewide success measures.
- Montana HB 632, enacted in 2021, established a workforce development advisory commission and other commissions comprised of legislators from both chambers and political parties.
2. Direct Funds to Workforce Development Initiatives
To address the pandemic’s negative economic impacts, many states have allocated or earmarked funds for workforce development initiatives. See NCSL’s ARPA tracking database and states’ 2021 recovery plans for more information on state allocations. For example:
- In 2021, lawmakers in Connecticut enacted legislation to establish a Chief Workforce Officer position, an Office of Workforce Strategy (OWS), and CareerConneCT account in the state’s general fund. OWS has launched CareerConneCT to train entry-level and middle-skill workers in high-demand industries. CareerConneCT provides grants for training, case management and placement services, as well as for childcare, transportation and other student supports.
- Illinois is prioritizing underrepresented workers in its Workforce Recovery Initiative, a $44 million effort to connect unemployed, underemployed and displaced workers with skills training and new employment opportunities at all skill levels. This includes a workforce recovery grant program to expand workforce training and support services and career training grants for at-risk youth.
- U.S. Virgin Islands’ recovery plan earmarks $2 million for subsidized employment programs and $2 million for apprenticeships, skills development, and workforce training. It also funds childcare assistance for unemployed individuals.
3. Determine the Level of Evidence for Existing and Proposed Programs
Federal guidance encourages state leaders to use clearinghouses, such as the U.S. Department of Labor’s Clearinghouse for Labor Evaluation and Research, to assess the effectiveness of programs already being implemented and interventions under consideration. Other clearinghouses for employment and job training include Social Programs That Work and Results First Clearinghouse Database.
For example, Kansas’ SLFRF recovery plan outlined three resources for identifying evidence-based interventions: research clearinghouses; public research institutions, such as the University of Kansas’ Center for Science, Technology and Economic Policy; and private research institutions.
4. Evaluate Workforce Development Programs
States can use SLFRF funds to evaluate and improve programs that address the pandemic’s negative economic consequences. As described above, federal guidance directs states to identify whether funds are used for evidence-based interventions and/or program evaluations. When recipients opt to evaluate programs, the U.S. Department of Treasury requires them to describe their methods and to publicly post findings. Some states are taking steps to evaluate outcomes of workforce development programs funded in whole or part by ARP. For example:
- The evidence-building strategy in Connecticut’s recovery plan involves three components: 1) prioritizing investments in evidence-building, 2) supporting the allocation of resources for evaluation and data analysis and 3) communicating and connecting projects with existing state efforts to coordinate and leverage capacity. The proposed evaluation framework for CareerConneCT includes an analysis that will measure, among other things, wage gains, educational attainment and decreased reliance on state services.
- North Carolina’s Appropriations Act of 2021 appropriates $500,000 to the Office of State Budget and Management to provide evidence-based and competitive grants to state agencies. Agencies may use grants to partner with research institutions to conduct research projects and evaluate whether programs are achieving the intended results. State agencies are required to submit reports on the use of funds to the Joint Legislative Oversight Committee on General Government and the Fiscal Research Division.
For more information, see the second brief in this series, which addresses ARP's provisions related to program evaluations.
5. Embed Evidence and Performance Monitoring in the Budgeting and Contracting Process
Several states have taken steps (including prior to ARP) to integrate performance information and evidence of program effectiveness into the budget process. For example:
- Colorado lawmakers in 2021 passed bipartisan legislation, SB 284, to set in place procedures to incorporate evidence-based programs into the state budget process.
- New Mexico SB 58 requires agencies to specify how much of the funds they request in their budgets will be spent on evidence-based programs.
Since the passage of the ARP, several states have outlined plans for using evidence to drive spending decisions.
- Montana HB 632 requires departments administering programs funded by ARP to develop plans to measure the effectiveness of the programs. Departments must require applicants to state what they intend to accomplish if selected to receive funding.
- Rhode Island developed a Project Evaluation Matrix, which outlines major questions policymakers are addressing as they consider how to spend ARP funds. The framework lists a series of questions policymakers can ask, such as: “How will success or failure of the implementation process be monitored, evaluated and reported?”
6. Engage in Research Partnerships to Build Evidence for Promising Programs and Policies
Several states have taken steps to partner with external stakeholders—such as universities, nonpartisan and philanthropic organizations, and subject matter experts—to convene and train legislative and executive staff on evidence in areas where leaders will be making decisions. For example, North Carolina’s Office of Strategic Partnerships develops, launches, and enhances partnerships between state government and North Carolina’s research and philanthropic sectors.
For more information, see the third brief in this series, which highlights state-level partnerships to build evidence for workforce development initiatives.
7. Develop a Learning Agenda
The U.S. Treasury Department’s final rule and prior guidance encourages states to use SLFRF money to adopt a learning agenda, sometimes referred to as a research agenda or evidence-building plan. Federal agencies are required to complete learning agendas as part of the federal Foundations of Evidence-Based Policymaking Act of 2018 (P.L. 115-435). Learning agendas can help agencies identify and address prioritized research questions that drive their evidence-building practices.
States can consult federal resources, including the Evidence Act Toolkit, to learn how to develop a learning agenda and the benefits of doing so. While states are not required to develop these plans, some have indicated plans for doing so. For example:
- Connecticut is considering adopting a learning agenda, according to its recovery plan.
The District of Columbia expects to use SLFRF funds to formulate a learning agenda to focus their evaluation efforts on answering questions of highest priority for district residents.