STRENGTHENING. Investments in the Adult Workforce Build a More Prosperous Georgia. January Thoughtful Analysis Responsible Policy

Transcription

1 STRENGTHENING T H E F O U N DAT I O N Investments in the Adut Workforce Buid a More Prosperous Georgia January 2008 Thoughtfu Anaysis Responsibe Poicy

2 About the Working Poor Famiies Project Launched in 2002, the Working Poor Famiies Project is a nationa initiative to assess state poicies and programs that are designed to hep ow-income working famiies succeed in the abor market and achieve economic security. With assistance from the Annie E. Casey, Ford, Joyce, and Chares Stewart Mott Foundations, the WPFP partners with existing state nonprofit organizations to examine state workforce deveopment poicies invoving the foowing: 1) education and skis training for aduts; 2) economic deveopment; and 3) work and income supports. The WPFP supports state nonprofit groups to engage in a two-part, phased process, beginning with an in-depth assessment of the economic conditions and state poicies affecting working famiies and foowed by actions to strengthen those conditions and poicies. The WPFP has partnered with 23 states thus far, under the management of the consuting firm Brandon Roberts + Associates. For more information about the Working Poor Famiies Project, visit About the Georgia Budget and Poicy Institute The Georgia Budget and Poicy Institute (GBPI) is an independent, nonprofit, non-partisan organization engaged in research and education on the fisca and economic heath of the state of Georgia. The GBPI provides reiabe, accessibe and timey anayses to promote greater state government fisca accountabiity as a way to improve services to Georgians in need and to promote quaity of ife for a Georgians. GBPI s unique resources and capabiities give it the abiity to assist organizations, program advocates, poicy makers and the pubic with accurate information on important topics, in such a way that both budget experts and average citizens can benefit. GBPI aso works cosey with advocates for at-risk popuations and experts on fisca and financia matters in anayzing state budget constraints and opportunities. Through partnerships with grassroots organizations and mutua coaborations, GBPI serves partner organizations by unraveing the maze of state budget and tax data to assist them in the pursuit of their poicy objectives. For more information about the Georgia Budget and Poicy Institute, visit Georgia Budget and Poicy Institute 100 Edgewood Avenue Suite 950 Atanta, GA Strengthening The Foundation

3 Strengthening the Foundation Investments in the Adut Workforce Buid a More Prosperous Georgia The Georgia Budget and Poicy Institute January 2008 Georgia Budget & Poicy Institute

4 Acknowedgements Strengthening the Foundation was written by Sarah Beth Geh, with contributions from Courtney Baiey, Care S. Richie, Timothy Sweeney, and Robert Wesh. A specia thanks to the Annie E. Casey, Ford, Joyce, and Mott Foundations for making the Working Poor Famiies Project and this report possibe. In addition, we woud ike to thank the Arthur Bank Famiy Foundation and Annie E. Casey Foundation for their generous support in the printing of this report. We woud ike to thank Brandon Roberts and Deborah Povich, aong with a other Working Poor Famiies Project staff and participants, for their guidance and assistance throughout this endeavor. We woud ike to acknowedge Kerri Rivers of the Popuation Reference Bureau for generating the ACS and CPS data. In addition, we woud ike to thank the many Georgia state agency empoyees who assisted us in data coection, particuary the staff of the Department of Technica and Adut Education, the Department of Labor, and the Department of Human Resources. We woud aso ike to thank the Georgia Working Poor Famiies Project Advisory Committee for their hepfu comments and support: Janice Barrocas, Women s Poicy Group Ray Bishop, President and CEO, Goodwi Industries of North Georgia Dr. Janet Burns, Georgia State University, Coege of Education Cindia Cameron, Organizing Director, 9to5 Atanta Working Women Dr. Cint Dye, President, Atanta Urban League Mary Margaret Garrett, Atanta Regiona Commission, Workforce Deveopment Joy Hawkins, Vice President of Regiona Education, Metro Atanta Chamber of Commerce Richard Ray, President, Georgia AFL-CIO Gaye Smith, Executive Director, Famiy Connection Partnership Michae Vomer, City Manager, City of Tifton and Former Commissioner of the Georgia Department of Technica and Adut Education Pat Wiis, Executive Director, Voices for Georgia s Chidren Finay, a specia thanks to Kathy Gruenhut of Bue Box Design for her assistance in the ayout and design of this pubication and to Noe Spencer for his editing assistance. Strengthening The Foundation

5 Contents Summary of Findings and Recommendations Introduction Chapter 1 The Status of Low-Income Working Famiies in Georgia Chapter 2 Capacity and Connection in Education: Advancing the Skis of Working Aduts Adut Basic Education and Literacy Programs Post-secondary Education Workforce Investment Act (WIA) Temporary Assistance for Needy Famiies (TANF) Prison Education Chapter 3 Quaity Job Growth: Focusing Economic Deveopment on the Worker The Need for Quaity Job Growth Economic Deveopment Through the Tax System Economic Deveopment Through the Worker Economic Deveopment Through Direct Subsidies Chapter 4 Work and Income Supports: Removing Barriers to Empoyment and Opportunity Earned Income Tax Credit Chid Care Heathcare Famiy and Medica Leave Unempoyment Insurance Georgia Budget & Poicy Institute

6 Summary of Findings and Recommendations Neary one in three working famiies in Georgia are ow-income, earning ess than 200 percent of the federa poverty threshod. These 323,840 Georgia famiies are hardworking, with an average work effort of 2,489 hours a year or about 1.2 fu-time jobs per famiy. In a majority of ow-income working famiies (57 percent), neither parent has had any post-secondary education. A fu 30 percent of owincome working famiies have at east one parent who did not compete high schoo. These hardworking famiies are a critica part of Georgia s workforce the foundation of our economic success and they represent the opportunity for Georgia s economic deveopment today. By increasing the ski and education eve of the adut workers who head ow-income working famiies, Georgia can offer a competitive 21st century workforce whie advancing the economic opportunity of these working famiies. The foowing presents a summary of the findings and recommendations on the pubic systems that can hep strengthen Georgia s foundation. Education and Training Key Findings Education increases economic opportunity and security. Georgians with a bacheor s degree or higher earn amost two and a haf times the median houry wages of Georgians who ack a high schoo dipoma or equivaent. In addition, coege graduates experience an unempoyment rate of 1.6 percent, compared to 5.4 percent for high schoo graduates and 11.2 percent for high schoo dropouts. In Georgia, 900,874 aduts aged 18 to 64 ack a high schoo dipoma or equivaent. A tota of 2.6 miion aduts (46 percent) ack any post-secondary education, yet ony 7.7 percent of aduts were enroed in post-secondary education in For adut basic education and iteracy programs, Georgia aocates $13.16 per adut without a high schoo dipoma, compared to the nationa average of $63.41 per adut without a dipoma. Whie Georgia has some of the most affordabe coeges and universities, the costs are rising. The state does an exceptiona job at providing financia aid for post-secondary technica certificate and dipoma programs, but essentiay has no need-based financia aid for post-secondary two-year and four-year degree programs. Georgia s investment in post-secondary education has decined in recent years. From fisca years 2001 to 2006, tota funding per fu-time equivaent (FTE) student for technica, two-year, and fouryear coeges has experienced doube-digit decines, after adjusting for infation. Key Recommendations Increase the capacity for adut basic education and post-secondary education. Create need-based financia aid to assist ow-income aduts in affording post-secondary degree programs. Deveop an outreach campaign targeted towards non-traditiona students. Provide educationa and training opportunities to more prison inmates and aduts eigibe for Temporary Assistance for Needy Famiies (TANF) and track the progress in earnings and empoyment of those participants who compete such programs. 1 Strengthening The Foundation

7 Economic Deveopment Key Findings Indicators such as unempoyment, underempoyment, ong-term unempoyment, and invountary part-time work rates in 2006 remained higher than the pre-recession eves. Amost 200,000 Georgians were unempoyed in 2006; and, another 111,294 workers hed part-time positions, athough they wanted fu-time work. The growth in ow-wage jobs has far outpaced the growth in high-paying jobs in recent years and is expected to continue to do so over the next decade. Economic deveopment poicies and programs must be aimed at reversing this trend by encouraging the growth in quaity jobs that offer sufficient wages and benefits. Of the $379 miion spent on economic deveopment tax credits from 1999 to 2003, ony one quarter of that amount was directed to workforce training efforts by businesses. QuickStart, the state s free-of-charge, site-specific training program, continues to be a nationa mode for economic and workforce deveopment. In 2006, QuickStart trained 44,156 workers. Key Recommendations Enact a tax expenditure report to track tax credits and exemptions. Shift a portion of the state s economic deveopment investments from job tax credits to training tax credits and direct training efforts. Revise the tax credit reguations to ensure the statutoriy required job standards are being met. Use OneGeorgia Authority surpus funds to make a strategic investment in adut education in rura communities. Work and Income Supports Key Findings Georgia s tax system takes a arger share of income from ow and moderate income famiies than from higher income famiies. The main cuprit of this unfairness is the saes tax since ower income famiies consume a much greater portion of their income through the purchase of taxabe goods. In May 2007, 16,724 eigibe famiies were on a waiting ist for chid care assistance. An increasing number of ow-income aduts ack heath insurance. In , roughy 680,000 ow-income aduts in Georgia were uninsured, up from 457,000 in In addition, approximatey 207,000 ow-income chidren acked heath insurance in In 2006, ess than one in four unempoyed Georgians received unempoyment insurance benefits. For those unempoyed workers who did receive UI benefits, 38.2 percent used their benefits for the fu 26 weeks, meaning they exhausted their benefits under federa guideines. Key Recommendations Enact a state Earned Income Tax Credit to make the overa tax system ess regressive. In addition, ensure that any major tax reform addresses the inequities in the tax system rather than exacerbating those inequities aready in pace. Appropriate sufficient funds to eiminate the chid care subsidy waiting ist and raise the eigibiity requirements coser to federa requirements. Expand Medicaid to a aduts beow 100 percent of poverty. In addition, the state shoud undertake additiona outreach efforts toward famiies and chidren who are currenty eigibe, but not enroed in Medicaid and PeachCare. Increase the maximum weeky unempoyment insurance benefits and index those benefits to a percentage of the average weeky wage for the state. Georgia Budget & Poicy Institute 2

8 Introduction The chaenge for poicy is not to eiminate inequaity per se but rather to spread economic opportunity as widey as possibe. Poicies that focus on education, job training, and skis and that faciitate job search and job mobiity seem to me to be a promising means for moving toward that goa. By increasing opportunity and capabiity, we hep individuas and famiies whie strengthening the nation s economy as we. - Ben Bernanke, Chairman of the Board of Governors of the Federa Reserve System a Georgia s workforce is the key to the success of the state s economic deveopment in the coming years. We are not the first to make this assertion. Leaders in the pubic, private, and nonprofit sectors, aike, have recognized and stated that our economic growth, especiay the growth in high-paying jobs, is dependent on the quaity of our workforce. Granted, other factors are invoved, such as good roads, a fair tax system, and proximity to customers and suppiers, in addition to a host of factors essentiay beyond the state s contro, ike gobaization. Whie those other factors are important, a trained, skied workforce provides the foundation of economic opportunity for Georgia. Right now, Georgia s foundation needs to be strengthened. Some 323,000 Georgia famiies amost one in three working famiies are working hard, yet not earning a sufficient income to meet the rising costs of housing, heathcare, chid care, and other necessities. Over 900,000 adut Georgians ack a high schoo dipoma. Amost two-thirds of prime-age working aduts (aged 25 to 54) ack any postsecondary credentia. These are today s workers and famiies. The quaity and advancement of skis and education for these workers wi be the determining factor of growth and opportunity in the coming decades. As stated by Chairman Bernanke, increasing economic opportunity through education and skis training wi be a benefit to famiies and to the economy as a whoe. This report seeks to expore pubic systems in Georgia that offer such opportunity for educationa and skis advancement for working aduts, aong with the systems that encourage job growth and remove barriers to work and economic mobiity. As part of a nationa effort caed the Working Poor Famiies Project, the report focuses specificay on how those pubic systems can better interact in order to reach the state s ow-income working famiies. Chapter 1 provides information and data on Georgia s ow-income working famiies, incuding educationa attainment, race, and geography. Chapter 2 assesses the pubic adut and post-secondary education systems, with a focus on the capacity of those systems to serve Georgia s workforce and the connections of those systems to Georgia s ow-income working famiies. Chapter 3 reviews Georgia s economic deveopment efforts through the ens of how those efforts are targeted to ow-income working Georgians and to quaity job growth. Chapter 4 outines work and income support systems that can remove barriers to empoyment and advancement and assist famiies in achieving sef-sufficiency. Spreading economic opportunity as widey as possibe invoves a greater commitment to ensuring that Georgia s pubic systems for training, education, and economic deveopment are avaiabe to, and focused on, ow-income working famiies. The resut wi be stronger famiies, stronger businesses, and a stronger state of Georgia. Amost one in three working famiies are ow-income in Georgia. 3 Strengthening The Foundation

9 Chapter 1: The Status of Low-Income Working Famiies in Georgia Georgia s working famiies are the basic buiding bocks of our state s economy. State Labor Commissioner Michae Thurmond 1 A recent po of Georgia residents posed the question: How much annua income does a famiy of four need to cover the basics, such as housing, food, and cothing? On average, the respondents said that around $44,000 in annua househod income was sufficient. 2 Woud these respondents be surprised, then, to earn that, of the 1 miion working famiies in Georgia, neary one in three famiies ive beow the basics? Over 300,000 working famiies in Georgia are ow-income, earning ess than 200 percent of the federa poverty threshod. For a famiy of four in 2005, 200 percent of poverty equaed $39,942 roughy $4,400 ess than what Georgians think is basic (see Figure 1.1). What Is A Low-income Working Famiy? As part of the nationa Working Poor Famiies Project, this report defines ow-income working famiy as foows: Famiy: A famiy is a primary marriedcoupe or singe parent famiy with at east one chid under the age of 18. Working Famiy: A famiy where a famiy members aged 15 and over have a combined work effort of 39 or more weeks in the ast 12 months. If one parent in the famiy is currenty unempoyed and has activey searched for work in the ast four weeks, then a famiy members aged 15 and over must have a combined work effort of 26 weeks or more to be counted as a working famiy. Low-income Working Famiy: A working famiy with an income of ess than 200 percent of the federa poverty threshod ($39,942 for a famiy of four in 2005). Figure 1.1 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $ Poverty and Sef-Sufficiency for a Famiy of Four $19,971 Poverty Sources: US Census Bureau; Hoand (2007) $39, % of Poverty $44,351 What Georgians Think is a Basic Income Neary one in three working famiies some 323,840 Georgia famiies in a had ow incomes, defined as ess than $39,942 per year for a famiy of four in With the requirements of at east a 39 week work effort and at east one chid, the figures of ow-income working famiies in this report do not incude the many chidess ow-income Georgians or famiies with a work effort beow 39 weeks per year. Georgia Budget & Poicy Institute 4

10 Using this definition, there were 323,840 ow-income working famiies in Georgia and over 1.3 miion individuas iving in those famiies in 2005 (Figure 1.2). Georgia has the ninth highest number of owincome working famiies and the sixth argest popuation of individuas iving in ow-income working famiies among a states. 3 And those numbers are increasing. Since 2001, the number of ow-income working famiies has increased by over 30, Figure 1.2 Number of Individuas Living in Low-Income Working Famies 2,500,000 2,472,795 2,000,000 1,500,000 1,357,865 1,360,780 1,000, , , , ,360 0 SC AL TN NC GA FL Source: Working Poor Famiies Project, anaysis generated by Popuation Reference Bureau using data from the 2005 American Community Survey Who Lives In Georgia s Low-income Working Famiies? Poverty and near-poverty know no bounds, yet often, the face of poverty is coapsed into stereotypes. Perhaps best exempified by the rhetoric around wefare, poverty is often viewed as the condition of the inner city, the singe minority mother, the immigrant famiy, or the azy. In truth, poverty and nearpoverty reach a geographies, a races, a famiy compositions, and many hardworking famiies. A of the over 300,000 famiies described in this report incude hardworking aduts who remain beow twice the poverty rate in spite of their work efforts. On average, ow-income working famiies in Georgia have an annua work effort of 2,489 hours, or 1.2 fu-time jobs per famiy. 5 These owincome working famiies are native-born and immigrant, white and back, married and singe, urban and rura (Figure 1.3). 5 Strengthening The Foundation

11 Figure 1.3 Characteristics of Low-Income Working Famiies, Georgia Tota Race/Ethnicity White, Non-Hispanic Minority* Immigrant Status Native-Born Immigrant* Educationa Attainment No High Schoo Dipoma or Equivaent* No Post-Secondary Education Assets and Benefits Renters Housing Costs Exceed 1/3rd of income Lack Heath Insurance* Location** Large City Large Suburb Sma Metro Rura Numer of Low-Income Working Famiies 323, , , ,850 64,990 98, , , , , Percent of Low-Income Working Famiies 100% 39% 61% 80% 20% 30% 57% 56% 56% 42% 24% 15% 23% 27% *At east one parent **Based on EITC tax returns, TY 2001 Sources: Working Poor Famiies Project, anaysis generated by Popuation Reference Bureau using 2005 American Community Survey and Current Popuation Survey Annua Socia and Economic Suppement; Brookings Institution, Earned Income Tax Credit anaysis Chidren A of the 323,840 ow-income working famiies in this report incude chidren by definition. In tota, amost 690,000 Georgia chidren ive in ow-income working famiies. Georgia hed the seventh highest number of chidren iving in ow-income working famiies among the states in Minorities and Immigrants Of the 323,840 ow-income working famiies, 197,505 famiies incude at east one minority parent. Compared to the overa working famiy popuation, minority-headed famiies are vasty overrepresented in the ow-income working famiy popuation. Minority-headed famiies comprise 42 percent of the tota working famiy popuation (a incomes) in Georgia, but represent 61 percent of a ow-income working famiies. 7 A ook at the median houry wages by race/ethnicity makes the racia disparities a the more cear. As shown in Figure 1.4, median houry wages among Georgia minorities ag on two counts first, behind white Georgians, and second, behind minorities in other states. Georgia Budget & Poicy Institute 6

12 A majority of ow-income working famiies are headed by at east one minority parent, and a majority are aso native-born. Eighty percent of ow-income working famiies in Georgia do not incude an immigrant parent. Georgia has a smaer share of immigrant-headed ow-income working famiies than the nation, where 30 percent of ow-income working famiies incude at east one immigrant parent. Among its neighbors though, Georgia has the second highest percent of immigrant parents heading ow-income working famiies, traiing ony Forida. 8 Figure 1.4 Median Houry Wages by Race/Ethnicity 2006 White African-American Hispanic Georgia $16.62 $12.40 $9.98 USA $15.99 $12.49 $11.16 Sources: Economic Poicy Institute anaysis of Current Popuation Survey Education Compared to the overa adut popuation, ow-income working famiies have a significanty ower educationa attainment. Whie 16 percent of a famiies are headed by a non-high schoo graduate, that percentage increases to a fu 30 percent when specifying ow-income working famiies, which totas 98,510 ow-income working famiies headed by a parent without a high schoo dipoma. 9 Georgia ranks 14 th worst among the states for percentage of ow-income working famiies with at east one parent acking a high schoo dipoma or equivaent. In terms of the actua number of famiies rather than the percentage of famiies, Georgia ranks 7 th worst among the states in number of ow-income working famiies with at east one non-high schoo graduate parent. In a majority of ow-income working famiies (57 percent), neither parent has had any post-secondary education. Ony 10 states have a higher percentage of ow-income working famiies without any postsecondary education. 10 Figure 1.5 Number of Low-Income Working Famiies With , , ,000 One Parent Lacking High Schoo Dipoma 250, ,000 Both Parents Lacking Post- Secondary Education 185, , , , ,000 50,000 42,350 92, ,370 58,595 59, ,450 98, ,945 - SC AL TN GA NC FL Source: Working Poor Famiies Project, anaysis generated by PRB using 2005 ACS data 7 Strengthening The Foundation

13 Assets and Benefits With income beow 200 percent of poverty, asset buiding such as homeownership can be unattainabe for many ow-income working famiies. Fifty-six percent of ow-income working famiies rent their homes, compared to 32 percent among a Georgians. 11 Moreover, a majority of ow-income working famiies spend more than one-third of their income on housing. In addition to the heavy cost of housing, heath insurance can often be out of reach for many owincome working famiies. Forty-two percent of ow-income working famiies (130,609 famiies) have at east one parent who acks heath insurance. 12 With the rising cost of heath care and the decreasing share of empoyer-sponsored heath care, the ack of insurance among ow-income workers wi become an ever increasing burden on those famiies. Urban, Rura, and Suburban Dweers Low-income working famiies ive in every region of the state in urban cores, suburbs, and rura areas. Using data on the federa Earned Income Tax Credit, which provides a tax credit to working famiies who generay earn ess than 200 percent of poverty, it is evident that ow-income working Georgians ive in every county, egisative district, and zip code. Figure 1.6 provides a view of the percent of tax returns caiming the EITC in every state House of Representatives district. Strengthening The Foundation These 323,840 hardworking famiies represent the opportunity for Georgia s economic deveopment today. By increasing the ski and education eves of the adut workers who head these ow-income working famiies, Georgia can offer a gobay competitive workforce that is ready for the high-ski demands of the 21 st century economy. A comprehensive approach to advancing these workers, and thus Georgia s economy, invoves strengthening: Pubic education systems targeted to adut earners; Economic deveopment strategies aimed at quaity job growth and worker advancement; and, Work support systems focused on economic opportunity for ow-income workers. The foowing chapters wi highight opportunities for improvement in each of these three areas education and training, economic deveopment, and work supports as a means of spreading economic opportunity widey, thus spurring Georgia s economic prosperity. Georgia Budget & Poicy Institute 8

14 Figure Atanta Percentage Recipients 5-10% 10-20% 20-30% 30-40% >40% Source: Brookings Institution City Boundary State Boundary 9 Strengthening The Foundation

15 Chapter 2: Capacity and Connection Advanced Education and Training for Working Aduts It is not enough for the workforce to be the best in the region, or the best in the country. The Georgia workforce needs to be sought out from around the gobe. - Commission for a New Georgia 13 In Georgia, 900,874 aduts aged 18 to 64 acked a high schoo dipoma or its equivaent in Another 1.7 miion aduts had a high schoo dipoma or GED, but no post-secondary education or degree. Combined, that totas 2.6 miion, or 46 percent, of a Georgians aged 18 to 64 who ack any post-secondary education. The prime-age working popuation those aged 25 to 54 shows a simiar picture. Amost two-thirds of Georgia s prime working age popuation acked any post-secondary credentia in Amost two-thirds of Georgia s prime working age popuation ack a postsecondary credentia. This is the Georgia workforce of today, and the impications are significant. For famiies, the significance ies in the income and empoyment insecurities that correate with ower eves of education. Figure 2.1 dispays the arge and growing disparity in median houry wages among education groups. Georgians with a bacheor s degree or higher earn amost two and a haf times the median houry wages of high schoo dropouts. 14 Over a ifetime, Georgians with a bacheor s degree can expect to earn $1 miion more than those with a high schoo dipoma. 15 Georgians who acked a high schoo dipoma experienced an unempoyment rate of 11.2 percent in 2006, compared to 5.4 percent for high schoo graduates and 1.6 percent for coege graduates. 16 Figure 2.1 Twenty-five Years of Rea Wage Growth in Georgia, by Education $24.00 $22.00 $20.00 $18.00 $16.00 $14.00 Bacheor s degree or higher Some coege High schoo dipoma Less than high schoo $12.00 $10.00 $ Source: Economic Poicy Institute anaysis of Current Popuation Survey For the state as a whoe, the ow educationa attainment of Georgia s workforce strains economic growth now and its competitiveness in the future. As noted in a recent manufacturing survey, Georgia manufacturers cite ski eves, both basic and technica, as their top concern. 17 By 2025, Georgia is expected to be one of 32 states faing beow the benchmark for internationa competitiveness, defined as 55 percent of aduts having an associate s degree or higher. Even if Georgia performs at the highest standards for graduating traditiona coege students between now and 2025, the state wi fa short of the internationa competitive benchmark by roughy 25,000 workers. 18 Meaning: the state must engage more adut workers (i.e. non-traditiona students) in post-secondary education to meet competitiveness measures in the coming years. Georgia Budget & Poicy Institute 10

16 Georgia is poised to fa short of the internationa competitiveness benchmark by 25,000 workers in Fortunatey, Georgia has an exceptiona system of pubic higher education in pace to strengthen the ski and education eves of today s workforce. By buiding on the current strengths of Georgia s post-secondary and adut education system, the state can make rea gains in advancing the workforce s competitiveness and economic opportunity. The foowing discussion presents ways to (1) increase the capacity of this pubic system to meet the need, and (2) forge better connections between ow-income working famiies and the opportunities offered by the pubic institutions. By improving these objectives of capacity and connection, Georgia can move the state, incuding its ow-income working famiies, ahead. Adut Basic Education And Literacy Programs The Need: 11 Strengthening The Foundation Aduts (18-64) Without High Schoo Dipoma or GED: 900,874 The Annua Progress: GEDs Awarded: 19,735 (2.2 percent of need) The State Aocation Per Adut Without a GED: $13.16 For many Georgians, economic opportunity and advancement must begin with basic education and iteracy training. Georgia s Department of Technica and Adut Education (DTAE) provides such opportunities through the Office of Adut Literacy, which offers Adut Basic Education, Adut Secondary Education, and Engish as a Second Language courses. In the 2006 fisca year, the DTAE adut iteracy programs, which are free to participants, reached 95,693 Georgians, serving 57,160 students in adut basic education, 10,640 students in adut secondary education, and 27,893 students in Engish iteracy courses. 19 Of the Georgians participating in these programs, 42 percent competed one eve and 26 percent then advanced to participate in the next eve in FY In addition to basic education and iteracy courses, the Office of Adut Literacy administers the GED high schoo equivaency testing service, which awarded GEDs to 19,735 Georgians in Whie Georgia s adut iteracy programs serve amost 100,000 students, the need is much greater. Over 900,000 Georgians acked a high schoo dipoma or GED in This totas 16 percent of Georgians aged 18 to 64 without a high schoo dipoma or its equivaent, pacing Georgia 10th worst in percentage of aduts without a high schoo dipoma. 22 The ack of basic education and high schoo dipoma or GED is not just a probem among younger workers. In 2005, 543,225 prime-age workers (aged 25 54) in Georgia acked a high schoo dipoma. Whie the need is great among prime-age workers, they represent ony a sma fraction of those receiving GEDs. Of the over 18,500 GEDs awarded in 2004, 73 percent went to young aduts (aged 24 and beow). 23 In addition to the significant need for adut education eading to a GED, the growth of Georgia s immigrant popuation over the ast decade has brought a greater demand for Engish as a Second Language courses. In 2005, over 390,000 adut Georgians spoke Engish ess than very we. 24 If the vision for Georgia is to have a workforce that is sought out from around the gobe, improving the basic iteracy and education eve of these aduts is crucia. 25 Yet, the state s aocation to adut iteracy programs amounted to just $13.16 per adut without a high schoo dipoma or GED in FY That amount compares poory to the nationa average of $63.41 per adut without a high schoo dipoma or GED. 27 Georgia must increase the capacity of its adut basic education services, as the current imited ski-eves tend to restrict economic opportunity for ow-income working famiies as we as growth opportunities for the businesses in search of an educated and skied workforce. Kentucky ends a mode for increasing the state commitment to adut basic education. In just five years, Kentucky doubed the number of aduts enroed in basic education from 60,000 to 115, By setting enroment goas and funding according to those goas, Kentucky has become a nationa

17 mode for improvements to adut iteracy programs. Whie states invest an average of In addition to making higher investments in adut basic education, Georgia must $63.41 in adut basic education engage in better approaches to inking with nontraditiona providers, such as per adut without a high schoo businesses, and transitioning workers from adut iteracy and GED to post-secondary dipoma or GED, Georgia training and educationa opportunities. One of the current approaches to partnering invests ony $13.16 per adut with the business community invoves a tax credit for businesses that offer or sponsor without a dipoma or GED. training in basic skis education. Between 2000 and 2003, a tota of $5,524 in tax credits was awarded to four businesses. 29 Apparenty, these tax credits are not providing the intended incentive to engage businesses in the advancement of basic education among adut workers. An aternate approach, as recommended by the Southern Regiona Education Board, woud be for state and oca governments to set an exampe for the business community by sponsoring and encouraging their own workforce to participate in adut iteracy programs. 30 Recent data on the educationa attainment of Georgia s state and oca government empoyees show 4.6 percent of workers (over 20,000) do not have a high schoo degree and 23 percent have a high schoo degree or GED but no post-secondary education. 31 In terms of better approaches to transitioning adut workers from basic education to post-secondary education, Georgia has an advantage over many states in that adut basic education and technica education are housed in the same agency DTAE. In addition, Georgia offers a financia incentive for these transitions through the HOPE GED grant, which provides students with a $500 grant for postsecondary education programs to be used within 24 months of receiving a GED. Georgia must buid on those two strengths and encourage more transitions between adut basic education and post-secondary education given the need for more associate s degrees in the 21st century economy and the current ow transition rate. In , ony 3.8 percent of adut education participants in Georgia had a goa of pursuing post-secondary education. 32 Washington s I-BEST (Integrated Basic Education and Skis Training) program offers a mode for Georgia to consider, as I-BEST aso combines adut education and technica education in the same agency. Through I-BEST, Washington s adut basic education casses incorporate professiona technica instructors to co-teach courses. Coeges receive 1.75 futime equivaent (FTE) funding in recognition of the increased costs of dua instructors and student support activities. Through this system of combined adut education and job training, students who compete a one-year basic education program aso receive a one-year occupationa certificate. I-BEST students earned 5 times more coege credits and were 15 times more ikey to compete job training than traditiona ABE/ESL students. 33 Recommendations: Reach out to prime-age working aduts (aged 25 to 54). Today s workforce those primeage workers must be a major focus of the adut basic education system. Outreach efforts that specificay target this age group shoud be undertaken, as they currenty represent ony one-quarter of GEDs awarded annuay. Increase the capacity for adut basic education. If Georgia is sincere about advancing the basic education eve of aduts, then aocating $13.16 per adut without a high schoo dipoma or GED is not sufficient. Poicymakers must define a numeric goa for increasing participation in adut iteracy programs and owering the 900,000 aduts acking a high schoo dipoma or GED. The Office of Adut Literacy shoud be funded according to those goas. Rethink the basic education tax credit. Georgia s tax credit to businesses that offer or sponsor training in basic skis education for workers is not providing the intended incentive. As recommended by the Southern Regiona Education Board, state and oca governments can set an exampe for the business community by sponsoring and encouraging their own workforce to engage in adut iteracy programs. Encourage transitions from adut education to post-secondary education. Goas shoud be set for transitioning adut GED recipients to post-secondary certificate and degree programs, and institutions shoud be rewarded for attaining those goas. Achieving a GED shoud be the first step, rather than a fina destination, in the adut education path. Georgia Budget & Poicy Institute 12

18 13 Strengthening The Foundation Post-secondary Education The Need: Aduts With Ony a High Schoo Dipoma or GED: 1.7 miion* (*Does not incude the 900,874 aduts who ack a high schoo dipoma or GED.) The Annua Progress: Two-Year or Less Degrees and Credentias Awarded: 39,303 Bacheor s Degrees Awarded: 35,515 Awards as a Percent of Need: 4.4 percent Moving beyond basic education, Georgia s post-secondary education system offers the next eve of education and skis advancement eading to increased economic opportunity. Georgia s pubic postsecondary system is comprised of two parts the University System and the Department of Technica and Adut Education (DTAE). The University System of Georgia contains 35 two-year and four-year institutions, with the mission of providing exceent undergraduate genera education and first-rate programs eading to associate, baccaaureate, masters, professiona, and doctorate degrees to the 260,000 students attending. 34 Within the University System, nine two-year coeges provide access to the post-secondary system for many students who are not fuy prepared for four-year degree programs. These institutions, which provide remedia education and ower tuition, can offer a critica entry point for many ow-income and ow-skied workers. In addition, two-year coeges offer a number of career associate s degrees, certificate programs, and continuing education courses. Georgia has a separate technica coege system in the Department of Technica and Adut Education (DTAE), which incudes 34 technica coeges, 31 branch campuses, and four joint programs with the University System. With a mission of providing education and training that transates directy to empoyment, the technica coeges offer career associate s degree, certificate, and dipoma programs. In FY 2006, DTAE enroed 152,037 students and awarded 27,330 technica certificates, associate s degrees, and dipomas. 35 In addition to technica education, DTAE offers adut iteracy programs, as discussed previousy, and economic deveopment programs, as discussed in Chapter 3. Enroment and Graduation Chaenges With the arge and quicky growing student popuation of Georgia s post-secondary institutions, it is easy to ose sight of enroment versus need. Combined, the University System and DTAE served some 412,000 Georgians in However 900,874 Georgians age 18 to 64 acked a high schoo dipoma; 1.7 miion aduts age 18 to 64 had ony a high schoo dipoma or GED; and, 819,185 prime-age working aduts (age 25 to 54) had some post-secondary education, but no degree. 36 That totas 3.4 miion adut Georgians who acked a post-secondary credentia in Ony a sma portion of the popuation did participate in post-secondary education. Among young aduts, aged 18 to 24, seven out of ten were not enroed in a post-secondary institution in For a aduts aged 18 to 64, Georgia s enroment rate was 7.7 percent in 2004, pacing Georgia 46th in post-secondary enroment among the states. 38 Finay, for those aduts who do enro in community coege, 52 percent of them return the second year. 39 Whie Georgia has a sighty higher retention rate than the nationa average, osing amost haf of students between the freshmen and sophomore year remains a concern. Whie Georgia s enroment was ow in comparison to need and retention needs to be strengthened, Georgia had the second highest ratio of degrees to enroment among the states. In 2005, Georgia s post-secondary institutions awarded 27.5 certificates, dipomas, or two-year degrees per 100 students enroed in a University System two-year coege, DTAE technica coege, or private sector two-year institution. 40 Georgia s rate of credentias awarded was amost twice the nationa average of 14 degrees/ credentias per 100 students enroed.

19 Achieving higher enroment, retention, and graduation among adut workers at a eves of the postsecondary system is crucia given the current ow enroment rates and the internationa competitiveness gap Georgia wi face in the coming years. Moving high schoo students into coege wi not be enough to fufi the need for 55 percent of aduts to hod an associate s degrees or higher by Georgia must pursue the adut worker in connection with post-secondary advancement in order to meet the workforce demands of today and tomorrow. One important aspect in connecting with the non-traditiona student is the avaiabiity of information on the programs and opportunities that the system has to offer. As the Workforce Investment Board s Strategic Pan noted, adut workers are not aways aware of the extent to which adut education programs can contribute to their career deveopment and to updating their skis, both of which make them more vauabe and marketabe in a goba economy. 41 Georgia has made a positive step toward bridging this information gap by devoting and taioring a portion of the GAcoege411 website to the adut earner. This website is a comprehensive resource on institutions, academic offerings, financia aid, and other aspects of the post-secondary education system. In aunching this important resource in 2005, Governor Perdue noted, I hope that every person in Georgia who is thinking about attending coege wi go onine to GAcoege411.org today. 42 Inadvertenty, Governor Perdue highighted the next step Georgia must take in expanding enroment among ow-income working aduts. We must get more aduts thinking about attending coege. Whie Georgia and severa other states have engaged in post-secondary education campaigns targeted to high schoo students, Kentucky is one of the few states to specificay target an outreach campaign to adut earners. Kentucky s Go Higher campaign was taiored to the adut earner, whether seeking basic education, a GED, vocationa training, or a post-secondary degree. This can serve as an exampe for Georgia. Beyond outreach to the adut earner, the state shoud incentivize and reward post-secondary institutions for engaging ow-income adut earners and assisting in their successfu competion of a program. Recenty a DTAE task force recommended impementing a performance measure system to tie a portion of funding to retention, graduation, and job pacement. DTAE awarded $1 miion in such performance awards to coeges in FY In the future, the agency woud ike to gain one to two percent of state aocated funds, on top of base funding to be used for performance awards. 44 Both types of performance awards those incentivizing enroment and transition and those rewarding retention and competion must be cosey inked to a we-designed measurement system, capabe of tracking ow-income aduts who enter the post-secondary education system. Affordabiity Chaenges How many ow-income workers know they can attain a post-secondary certificate or dipoma for free through the HOPE grant? In Georgia s post-secondary system, the merit-based HOPE schoarship is one of the fagship state poicies, receiving nationa attention since its inception in For students earning a 3.0 grade point average (GPA) or above in high schoo, the HOPE schoarship provides financia aid for tuition, fees, and books for two-year associate s degrees and four-year bacheor s degrees in Georgia s pubic and private post-secondary institutions. The schoarship is avaiabe not ony to recent high schoo graduates, but aso to adut workers who graduated years ago. Whie technica coeges offer a imited number of career associate s degrees eigibe for the HOPE schoarship, the vast majority of HOPE schoarship funds go to students in the University System, where two-year and four-year degrees are the major focus. In addition to the merit-based HOPE schoarship, Georgia offers the HOPE grant, which provides fu-tuition, book, and fee aid for Georgians seeking a technica certificate or dipoma at a pubic postsecondary institution, regardess of high schoo grade point average. In FY 2007, over 95,000 students received the HOPE grant at Georgia s pubic technica coeges, whie another 7,000 University System students received the grant for the few certificate and dipoma programs offered at the pubic two-year coege eve. 45 The HOPE schoarship and grant are fuy funded through the Georgia Lottery and have provided $3.39 biion in financia aid to over one miion Georgia students between 1993 and Georgia Budget & Poicy Institute 14

20 Both the HOPE schoarship and grant have severa positive attributes when considering the barriers to post-secondary education faced by many ow-income aduts. The HOPE programs are offered to part-time students, which is particuary usefu for ow-income famiies who must continue to work whie seeking higher education. Through the HOPE grant, non-degree career courses are covered. This is especiay beneficia to working students who woud benefit from some post-secondary education, but cannot commit to a fu program of study. As of 2002, Georgia was one of ony five states to provide state aid to these short-term, non-degree career courses, which often do not quaify for other aid programs such as the federa Pe grant. 47 Whie the HOPE grant and schoarship offer significant opportunities to ow-income working aduts, one drawback to the HOPE programs is the incusion of earning support (remedia) courses in the hour imits. If a student must compete remedia coursework to prepare for the technica coursework or associate s degree coursework, those remedia courses, which do not count towards the program, are counted as part of the imited HOPE hours avaiabe to each student. In effect, a student coud exhaust a significant portion of HOPE grant or schoarship hours before reaching credit courses. Beyond the HOPE grant, there is an enormous gap in non-merit-based financia aid for those aduts transitioning to two-year and four-year degree programs. The HOPE schoarship offers access to post-secondary degree programs, but ony for students who maintained a 3.0 GPA in high schoo. For those students who did not maintain a 3.0 GPA in high schoo, they can become eigibe for HOPE schoarship aid in their sophomore year of coege if they achieve a 3.0 GPA in their freshmen year. Since the HOPE schoarship is soey merit-based, Georgia essentiay has no need-based financia aid for two-year and four-year degree programs. In FY 2005, for exampe, need-based aid in Georgia s two-year and four-year institutions comprised just 0.3 percent of a HOPE Grant: Financia aid for technica certificates and dipomas HOPE Schoarship: Merit-based financia aid for associate s and bacheor s degrees Georgia essentiay has no need-based financia aid for degree programs (associate s and bacheor s degrees). undergraduate aid, whereas need-based aid totaed 27.1 percent of a state aid in Tennessee, 21.5 percent in Forida, and 7.2 percent in South Caroina. 48 To ensure that the education system is seamess for ow-income famiies, Georgia must address the ack of need-based financia aid at the associate s and bacheor s degree eves. Georgia has some of the owest priced coeges and universities in the nation; however, even Georgia s ow tuitions have been on the rise. From 1996 to 2006, the median tuition and fees for fu-time students rose by 27 percent at Georgia s pubic four-year institutions and by 22 percent at pubic two-year coeges, after adjusting for infation. 49 Over that same period, Georgia s median househod income ony rose by 12 percent, after adjusting for infation. 50 As this gap between income growth and tuition growth continues to expand, more owincome famiies wi find degree programs at Georgia s coeges to be out of their reach uness Georgia invests in need-based financia aid. Georgia has taken the first step in post-secondary education affordabiity with the HOPE grant and must now address the next step need-based financia assistance for the associate s degrees on which our internationa competitiveness hinges in the coming decades. Funding Chaenges The chaenges to affordabiity reate cosey to the overa funding chaenges of higher education. Tuition and fees constitute haf of the funding equation for post-secondary institutions. The other funding stream is the state budget. The combination of these funding sources shoud baance to meet the goa of affordabe tuition and we-funded institutions. As shown in Figure 2.2, tota funding (state appropriations pus tuition/fees) for Georgia s higher education system has not kept pace with student growth and infation. From FY 2001 to FY 2006, tota funding per fu-time equivaent (FTE) student for technica, two-year, and four-year coeges has experienced a doube-digit decine, after adjusting for infation. 15 Strengthening The Foundation

21 Figure 2.2 Percent Change in Funding for Georgia s Pubic Post-Secondary Systems, FY (Infation-Adjusted) State/Loca Appropriations per FTE -26% -19% -13% Technica Coeges Two-year Coeges Four-year Coeges -8% Tuition and Fees per FTE 6% 8% -12% Tota Funding per FTE -18% -12% Source: Author's cacuations of SREB State Data Exchange, 2007 Note: A percentages provide infation-adjusted comparisons. FTE stands for Fu-time equivaent student. With the recession of 2001 and the sow recovery thereafter, states across the nation have owered their investment in higher education on a per student basis. Whie Georgia s funding chaenges are not unique, they have been more severe than many of its neighbors: University System Two-Year and Four-Year Coeges: From FY 2001 to FY 2006, tota infation-adjusted funding per FTE student fe by 18 percent at two-year coeges and 12 percent at Georgia s four-year coeges. For both two-year and four-year coeges, Georgia s decrease in tota funding per student was the argest decine, both in doars and percent, among the 16 Southern states that comprise the Southern Regiona Education Board (SREB). 51 This diminished investment in the University System took Georgia severa steps back compared to its peers. In FY 2001, Georgia ranked 3rd highest in tota funding per FTE for two-year coeges and 4th highest for four-year coeges among the SREB states. By FY 2006, however, Georgia ranked 10th highest in tota funding per FTE for two-year coeges and 13th highest for four-year coeges among the 16 SREB states. The decrease in tota funding was driven by the decine in state appropriations. Whie tuition and fees per student actuay increased by 6 percent and 8 percent (infationadjusted) at Georgia s two-year and four-year coeges, state appropriations per FTE student decreased by 26 percent and 19 percent, respectivey. 52 As of FY 2008, the state appropriation to the University System continues to fa $272 miion short of fu formua funding. 53 DTAE Technica Coeges: Unike the coeges in the University System, Georgia s technica coeges have experienced decines in both state appropriations and tuition on a per student basis after adjusting for infation. State appropriations per FTE student fe by 13 percent from FY 2001 to FY 2006 (infation-adjusted). In FY 2006, Georgia appropriated $3,938 per FTE student, which was the owest amount among the five Southern technica coege systems. Aabama and Kentucky invested amost twice that eve in their technica coege systems in FY According to DTAE testimony on the subject, if the state appropriations portion of funding was 75 percent of tota funds, rather than 63 percent, then an additiona $28 miion woud be avaiabe to the technica coege system. This additiona investment woud aow DTAE to regain its foothod on the ratio of fu-time facuty to adjunct facuty, raising the fu-time facuty portion from the current 58 percent to 66 percent. 55 Georgia Budget & Poicy Institute Between FY 2001 and 2006, Georgia s twoyear coeges fe from 3rd highest in tota funding per student to 10th highest in tota funding per student among the 16 Southern states. 16