State adds money for rural areas, but two-county agency says it's taking a deeper cut that will affect its ability to serve minorities.

When Gov. Kate Brown called on Oregon's economic development agency to focus on work for minorities and rural residents, her comments during her state of the state address on Feb. 5 struck a sour note with some officials.

When state money for job training was distributed last year for the current two-year budget cycle, the regional agency that serves Portland, Multnomah and Washington counties absorbed about 80 percent of the $1.4 million cut spread among Oregon's nine workforce investment boards.

"Here we are — the two most populated counties in the state with the greatest diversity of people and the greatest need — and we are taking a $1 million cut while other areas are seeing an increase," said Washington County Commissioner Roy Rogers, who sits on the board of Worksystems Inc.

Although they are urban counties among Oregon's most prosperous, they also have greater shares of racial and ethnic minorities than the statewide average.

"We are allocated far less funding compared to other regions of the state under any metric related to population, scale of workforce, or communities of risk to provide comparable workforce services," said a letter from Portland Mayor Ted Wheeler and the leaders of the two county boards of commissioners.

"We are appealing to you to identify a path forward that is fair to Oregonians who live in the city of Portland, Washington and Multnomah counties," said their letter, which was co-signed by six state senators and 11 representatives.

Action in doubt

Brown has said if changes are needed in the distribution formula, they should be done in the next two-year budget cycle that starts in mid-2019.

Lawmakers could step in — the Legislature ultimately decides how money is spent — but it is unclear whether they will do so during their current session. A few of the lawmakers from the two counties, including three legislative leaders from Portland, did not sign the letter.

Offsetting the cut is among half a dozen priorities Washington County has listed for the 2018 short session.

"Washington County will work with our local government partners to secure additional funds to supplant lost revenue from the abrupt change in the distribution formula," a county statement says.

A memo from the Worksystems staff suggests that the cuts have resulted in big differences between what the agency gets and what others in Oregon get per resident, per person under the federal poverty line, and per person of color in poverty.

According to its figures, the two-county region gets $4.92 per person in training money, compared with $7.27 for the rest of Oregon. For people in poverty, it's $37.18 per person, compared with $46.24; for people of color in poverty, it's $77.98 per person, compared with $152.41.

The December unemployment rates in Oregon's most populous counties were 3.5 percent in Washington and 3.7 percent in Multnomah. Both were less than the Portland regional rate of 3.8 percent and the statewide rate of 4.1 percent.

But their overall shares of minorities, including Hispanics — 33 percent in Washington County, 29 percent in Multnomah County — are higher than the statewide rate of 23.6 percent.

Washington County's poverty rate in 2016 was 9 percent, and Multnomah County, 14.2 percent, compared with 13.3 percent statewide. According to the Oregon Center for Public Policy, a think tank based in Silverton, minorities have higher poverty rates than whites (11.1 percent) or the statewide average.

Four of the nine workforce boards, all in rural areas, got more money even as the statewide total from the tax-supported general fund dropped from $9 million to $7.6 million. The other five boards — all in urban areas — got less, including Worksystems Inc., which got $1 million less for 2017-19.

Dispute remains

Rogers said the Worksystems Inc. board isn't asking for a second distribution that might give it more money, but would leave other workforce boards with less.

He said Brown should tap a reserve of $1.6 million the governor controls in discretionary funds.

"We said don't do new programs, let's continue the course and get people to work," he said. "That's why we did what we did (letter), but it didn't go anywhere."

The officials' letter says:

"We believe the use of discretionary funds within the governors' reserve fund may provide a good short-term solution. But (we) would also encourage a more thorough analysis of all state and federal workforce resources and how those are distributed across the state."

In a written response to the officials dated Nov. 13, Brown said: "The bottom line is that we don't have the funds to meet the demand for workforce support."

But she also said it was time to proceed with a change in distribution of that money to benefit other areas.

"It is unacceptable to me for regions to continue to wait to receive their equitable share of resources, based on population, poverty and geographic reach," she wrote.

Brown, in her state of the state address, has called for a new training effort in Future Ready Oregon to close a gap between worker skills and prospective jobs. But she said the $300 million she proposes for it would be in her 2019-21 budget due to lawmakers by Dec. 1, if she is re-elected Nov. 6.

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