Tennessee labor department requests new funding for apprenticeships, youth employment and micro‑credentialing
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Summary
Commissioner Denise Thomas outlined an FY2025 budget request that would expand rural healthcare apprenticeships, continue a youth employment program, strengthen the state workforce board and fund a statewide micro‑credentialing initiative. Officials also reported improved unemployment claims timeliness and a healthier unemployment trust fund.
Tennessee Department of Labor and Workforce Development Commissioner Denise Thomas told the House Finance, Ways and Means Committee on the committee’s February 2025 budget hearing day that the department is asking for new state funding to expand apprenticeships, youth employment and micro‑credentialing.
The department proposed four main cost increases: $8.2 million in nonrecurring funds for a rural healthcare apprenticeship expansion funded from TennCare shared savings; $7 million (including $2 million recurring) to expand a youth career exploration and paid work experience program; $4.7 million (including $700,000 recurring) to enhance the State Workforce Board’s planning capacity; and $6.3 million in recurring funds to develop a statewide micro‑credentialing program with the Tennessee Higher Education Commission and the Tennessee Board of Regents.
Why it matters: Thomas said these investments aim to bridge employer skill gaps, increase training capacity in rural areas and create credential pathways tied to industry demand. “We wanted to look at where the greatest gaps were and the counties that had the biggest need,” Thomas said, describing the rural healthcare apprenticeship plan and a 13‑grantee rollout that is statewide and targeted by county need.
Committee members pressed for details on program design, equity and safeguards. Representative Williams asked whether the youth employment subsidy could create an unfair competitive advantage for businesses that receive youth payroll subsidies; Thomas said the money flows to local workforce boards or nonprofit grantees, which directly pay participating youth, and that the department intends to broaden outreach and place caps per student to serve more participants. “We have a cap per student,” Deputy Commissioner Buddy Hoskinson said, noting the prior summer’s maximum per‑student stipend was $4,000.
Program results and operational metrics: Deputy Commissioner Hoskinson and CFO Andy Sommer reported operational improvements and participation counts from recent activity. Highlights the department presented to the committee included: - Youth Employment Program: about 4,818 youth employed in the program last year and evidence of strong demand and wait lists in some areas; the department said it used a mix of federal and state funds to maximize participation. - Apprenticeship Tennessee: the department reported roughly 9,664 active apprenticeships (the presentation also cited 11,659 as a broader active‑program total) and 446 registered programs. - Unemployment administration: first‑paid timeliness reached about 90.2% in December and stayed near federal guidance levels; the unemployment trust fund rose by about $74 million in calendar year 2024 and the trust fund balance was reported at $1.439 billion.
Cost offsets and reductions: CFO Andy Sommer described two reductions to offset increases: approximately $422,000 in savings from purchasing efficiencies and negotiated contract savings, plus planned reductions of five vacant positions to partially offset new recurring positions built into the request.
Micro‑credentialing and partnerships: Thomas said the $6.3 million recurring micro‑credentialing request would fund curriculum development, industry‑customized training and placement services in partnership with Tennessee Higher Education Commission, TBR and the Department of Education. The department said it previously spent about $10.2 million in federal funds on credentialing and expects demand to rise.
Implementation timing and next steps: Thomas said the rural apprenticeship grants will begin July 1 (the start of the second year of shared savings availability) and the department will provide procurement and grantee updates to the committee. Committee members asked for follow‑up reports on geographic distribution of grantees, program enrollment caps, and the department’s plan to ensure broad business participation and equity in placements.
Ending: Committee members praised the department’s customer service improvements and the commissioner’s outreach efforts; Thomas invited the committee to seek additional information and said the department would provide follow‑up data on expenditures, grantee lists and enrollment figures.
