Labor seeks funds to expand youth and reentry employment, apprenticeships as trust fund strengthens
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Summary
Labor Commissioner Denise Thomas requested funds to expand Tennessee Works hub, youth employment ($8M), a reentry subsidized employment pilot, rural health apprenticeships and micro‑credential pilots while reporting a healthy unemployment trust fund balance of $1.54 billion and $49 million in interest earnings.
Department of Labor and Workforce Development Commissioner Denise Thomas presented the department's FY27 budget priorities to the Finance, Ways and Means Committee on Feb. 25, asking lawmakers to fund a range of workforce initiatives and highlighting strong trust fund balances.
Thomas described a Tennessee Works hub (three positions, approximately $705,000) to centralize employer engagement and an $8,000,000 nonrecurring expansion of the youth employment program to reach more rural youth and those aging out of foster care. She said prior investments drove high demand and that the program includes caps per student (e.g., typical student wage caps at $3,500–$4,000) to permit broader participation.
The department asked for a $1,500,000 recurring reentry employment program to subsidize wages and place justice‑involved individuals in paid work immediately after release; initial caps were described as $15,000 per participant with an expectation of roughly 150–200 participants in the first year and an expected retention target exceeding 75%.
Thomas described rural health apprenticeship efforts funded via TennCare shared savings: previous funding supported 37 grants, 1,600 participants (about 1,000 apprentices), 56 apprenticeship offerings and reach into 86 counties; the department requested an $8.2 million continuation/expansion tied to shared‑savings allocations.
On system finances, CFO Andy Sommer briefed the committee that the unemployment trust fund balance stands at $1,540,000,000 with about $49,000,000 in interest earnings in the last year; the trust fund reserve places Tennessee at a tax‑rate threshold that keeps employer tax costs relatively low absent a deep recession.
Thomas said the department is piloting micro‑credentials with prior FY26 investments of $6.3 million and that demonstration grants are being used to shape future competitive solicitations targeted to regionally important occupations. Lab or staff follow‑up materials were promised to committee members on program participation numbers, waiting lists, and youth employment enrollment caps.
The committee asked about program details and outcomes; no final appropriation decisions were made in the hearing itself — the requests will be reviewed in the broader budget process.
