Under Michigan’s New Jobs Training Program, participating businesses and community colleges would pay nothing. Tuition and training costs will be financed through bonds sold by the colleges and paid back with employer withholding taxes.
Companies may participate under the condition that the training is for newly created jobs, as part of an effort to build up the state’s job base. Trainees can’t be replacement workers for existing positions.
From the Lansing State Journal:
"This is not a hit to the state, because these are new jobs," said Michael Hansen, president of the Michigan Community College Association. "The state was never going to realize that income tax anyway. The jobs wouldn't exist except for this program."
Modeled on a successful program in Iowa, the initiative "is a win for the community college, because they develop training capacity," he said, adding that several of the state's community colleges, Lansing Community College among them, have already expressed interest.
"It's a win for the company, because they get their workers trained for free," he said.
The New Jobs Training Program is modeled after a successful program Iowa began in 1983. In Iowa, companies adding new jobs can make agreements with local community colleges to train a set number of employees. The colleges issue bonds to the employer, which are repaid by the trained employees’ state income taxes. Training is received at no cost to the employee, and their company takes responsibility for repayment if the training contract is broken.
In the 25 years since the Iowa program began, “employers working with community colleges have received over $560 million from the Iowa New Jobs Training Program for 2,000 training projects and more than 138,000 planned new jobs, some of which pay salaries averaging nearly $40,000 annually,” according to SHRM.
When signing the legislation, Michigan Gov. Granholm pointed out that the state “must do everything we can to help our citizens get the training they need for good-paying jobs in this challenging global economy. These bills are another part of our plan to ensure that we have a strong workforce that can compete and win in the 21st century.”