Appropriations subcommittee advances shifting several Labor & Industry programs to Employment Security Account, contingent on LC0463

The Section A Subcommittee on Appropriations voted to advance several Department of Labor and Industry (DLI) decision packages that shift funding from the state general fund to the Employment Security Account (ESA), contingent on draft legislation LC0463 and associated contingency language the committee approved.

Committee members approved the substitution of DP 104 with DP 1044 for WIOA adult basic education, moved a funding-switch decision package for the Human Rights Bureau (DP 503) and advanced Office of Community Services items (DP 701 with related language and DP 702). The committee also accepted contingency language, noted on page 12 of the packet, tying the appropriations changes to the LC0463 measure.

The moves are intended to reduce the general fund share of certain DLI programs by authorizing those programs to draw from ESA balances. Ethan Bergen, a committee staff member, explained the procedural change on the WIOA item: “this DP is no longer contingent on that. It's now contingent on LC0463,” and said the ESA authority is being used for the state match portion of the WIOA adult basic education DP. Bergen also clarified earlier procedural questions about DP 104 and said the committee needed to reconsider the earlier approval so the substitute DP (1044) with the contingency language could be adopted.

Agency staff said the ESA has been reviewed by an actuary and forecasted balances support the proposed switches. Associate Director Jay Phillips described the ESA revenue stream and intentions: “what it does again is it attacks the the fund itself is actually funded through there's a point 18% of taxable wages that is charged to to employers. This is already a current, funding stream that we collect.” Committee staff later gave a forecasted balance: with the proposed uses included, the ESA fund balance was presented as about $26.5 million at the end of fiscal year 2026 and about $28.5 million in 2027.

Not all members were without concern. Representative Miskiewicz asked how visibility and legislative review would be preserved if programs were funded from the ESA rather than the general fund, saying the concern was that “any sort of funding decreases to this office [should] come before this committee.” Committee staff replied that either the DP could fail or the LC could fail, and that the contingency language was intended to preserve committee visibility: if the LC did not pass, the contingency language would reverse the funding switch and keep general fund appropriations intact.

Committee members performed voice votes on the packages. Several DPs were advanced with the contingency language attached; Senator Harvey’s votes were recorded as aye by proxy on multiple items. The committee recorded the substitution and reconsideration procedure for DP 104 to ensure the contingency language was attached to the correct DP (1044) before advancing it.

Why it matters: moving recurring program costs from the general fund to a dedicated employer-funded account reduces pressure on the general fund but changes where oversight and line-item visibility appear in the budget. Committee members pressed staff for fund-balance projections, legal contingencies and assurances that decreases to programs would continue to come before the subcommittee.

The items advanced in this meeting will only take effect if the related LC language (LC0463) becomes law; the committee attached contingency language to several DPs to clarify the intended reversal if the LC does not pass.