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DEED presents governor's budget to House committee, highlights Drive for 5 and vocational rehab support
Summary
The Department of Employment and Economic Development presented the governor's budget recommendations, including funding increases for Drive for 5 and vocational rehabilitation services and several proposed reductions. The committee adopted a supplemental amendment and laid the bill over for future consideration.
The Department of Employment and Economic Development (DEED) presented the governor's budget recommendations to the House Workforce Development Finance and Policy Committee, highlighting targeted investments in sector-based training programs and a proposed increase for vocational rehabilitation services.
Commissioner Matt Varilek told the committee the governor recommends a mix of reallocations and targeted investments in the workforce development fund and the general fund. "First, one recommended new investment is the Service to Success initiative," Varilek said, describing a proposal for support of public-service pathways. He also described an $8 million proposed increase for the Drive for 5 workforce initiative, a sectoral pipeline grant program created in 2023, and recommended ongoing increases to vocational rehabilitation services: "VRS is facing budget constraints due to increasing cost pressures, increasing demand, and, also relatively flat funding," Varilek said.
The department proposed general-fund reductions in a number of economic development line items and targeted reductions in smaller workforce programs to meet the governor's fiscal framework. Varilek said the administration calibrated the cuts so programs could still provide services while fitting within current fiscal constraints.
Representative Berg moved House File 2440 to be before the committee and moved an 825-0030 amendment to reflect the department's supplemental request. The committee adopted the amendment and, after testimony and questions, laid over House File 2440 as amended for later consideration.
Committee members pressed DEED on program impacts and staffing implications; several members called for additional hearings focused on vocational rehabilitation services and for agencies to discuss internal data-sharing and enforcement coordination. Varilek said some items will be discussed in more depth in subsequent hearings and underscored that workforce programs like Drive for 5 aim to direct more people into "family-sustaining wages" industries.
The department also recommended technical changes to grant programs and outcome reporting to recognize non-postsecondary credentials. Varilek briefed the committee on the Minnesota Forward Fund, Minnesota Job Skills Partnership updates, and the administration's approach for winding down some federal-match priorities while enabling state incentives for large projects.
The committee laid over the bill as amended to permit additional review and member questions.
