Idea II. Accelerate Growth of Apprenticeship Through a Regional Investment Strategy

California is already a national leader in public investment to support apprenticeship, providing new and established programs with two regular sources of funding. Montoya, or “Related Supplemental Instruction (RSI) funding,” has been in place since 1970 to reimburse training providers for the costs of apprenticeship related coursework.¹ And since 2016, grant funding has been made available through the California Apprenticeship Initiative (CAI) to support regional projects looking to start and operate new apprenticeship programs.²

In the 2019–20 fiscal year alone, California appropriated over $90 million from the General Fund to support apprenticeship administration and reimbursement for related and supplemental instruction, including $15 million for the competitively awarded CAI grants.³ Though well-funded, each of these funding sources has its limits. RSI funding only reimburses training costs, and so primarily benefits established programs. CAI funds, by contrast, can provide important seed funding for new programs, but because this funding is awarded on a project basis, it tends to incentivize programs to get enrollment numbers quickly to meet performance metrics, rather than developing sustainable strategies and partnership models with the ability to grow over time.

As a result, Californian public funding for apprenticeship reinforces a program-level rather than system-level orientation. The future of apprenticeship and the 500,000-apprentice goal demand clear regional strategies for programs across multiple sectors. In the Bay Area, for example, a broad coalition of local workforce boards, industry, colleges, districts, and community organizations have convened around “Apprenticeship Bay Area” to pursue and align resources to support apprenticeship in the information technology sector. Other examples of multi-partner coalitions are found in San Joaquin County and Los Angeles, and the Inland Empire (see Box 3).

In lieu of an innovation and expansion strategy exclusively reliant on competitive grants, state policymakers can make investments in nontraditional apprenticeship expansion that support dedicated capacity, and greater coordination at the regional level. Funding for nontraditional apprenticeship programs could be designated for each region to support the development of regional plans that help align education, industry, and workforce partners toward shared goals for apprenticeship expansion that work up to the 500,000-apprentice goal. Regions could still benefit from program-level funding from RSI, and competitive state grants such as the CAI could continue to provide a catalyst for new program start-up. However, structured regional collaboration would serve to better integrate new apprenticeship programs with sustainable education and workforce funding streams.

Several existing regional systems could form the basis for this new regional collaborative process, including the Career and Technical Education (CTE) Regional Consortia of California’s Community Colleges or the Regional Planning Units used for strategic workforce planning and the administration of Workforce Innovations and Opportunity Act (WIOA) funds. Regional entities in each system have played key roles in nontraditional program expansion, whether through colleges and local education agencies participating in the California Apprenticeship Initiative, or through local workforce development boards.⁴ Regardless of how funding flows, key players in higher education, workforce development, K–12, and economic development should be required partners in a joint regional apprenticeship plan.

The objective of these funds would not be to support strategy and planning alone. A clear regional identity and plan for apprenticeship can streamline employer engagement, provide a mandate for new partnerships, and provide comprehensive supports that reduce barriers to apprentice access and success. Furthermore, regions should be able to use funds to build dedicated capacity to support program development and implementation in new sectors. Depending on the region, this capacity could be embedded within an existing institution, such as a community college, or funds could be used to start or secure the services of one or more intermediary organizations. As an example, funding from a California Apprenticeship Initiative Grant to the San Luis Obispo County Office of Education has helped seed the development of SLOPartners, a dedicated intermediary that works with employer and training partners to set up apprenticeship programs in the information technology and manufacturing sector.⁵

To support collaborative regional apprenticeship planning, California’s state government could:

• Pursue annual appropriations to support dedicated regional apprenticeship consortia. Leveraging IACA’s interagency representation, the state can request regional designees to establish apprenticeship consortia by submitting five-year apprenticeship plans for supporting nontraditional programs. DAS field staff can support plan development, which should identify target industry sectors for new programs, articulate key roles and responsibilities within each consortium, and emphasize the use of existing education and training options to support core program costs. Consortia leads would commit to collecting and reporting data on IACA-approved apprenticeship programs within the region in order to inform progress and technical assistance needs over time. In return, regions should receive base funding of no less than $3 million yearly.
• Develop apprenticeship consortium performance metrics oriented towards system-level rather than program-level outcomes alone. Exact consortium allocations could be tied to performance metrics including the attainment of Strong Workforce Program Student Success points by college districts.⁶ These metrics focus on building or procuring the capacity to carry out:
  • Industry intermediary activities, to include employer engagement and dissemination of labor market information to college and K–12 CTE staff
  • Education intermediary activities, to include new program development and updating of existing programs, building regional awareness, and coordination and articulation of competencies between K–12, employers, and higher education institutions
  • Coordination of supportive services and identification of economies of scale in the provision of remedial education and pre-apprenticeship, transportation, child care, and other basic services for apprentices
• Develop a regional manual for the use of state higher education funding to support credit-bearing RSI in nontraditional apprenticeship programs. Montoya funds are likely to remain a key source of support for non-credit apprenticeship opportunities. But as nontraditional programs supported by regional consortia are likely to develop in fields where college degrees may impact career advancement for apprentices, emphasis should be placed on helping programs leverage full-time equivalent student (FTES) funding to support RSI costs as established by AB 1809 (2018).⁷
• Explore employer-based incentives for engaging with regional apprenticeship consortia. The ETP can be a useful tool for incentivizing employers to engage with regional consortia. For example, employers sponsoring Registered Apprenticeships in partnership with regional consortia may be eligible for “priority of use” of ETP funds to reimburse on-the-job training costs. Over time, ETP funds could be limited to employers engaged directly with consortia-supported programs.