Innovative City and State Funding Approaches to Supporting Subsidized Employment and Transitional Jobs

by Chris Warland; Elizabeth Lower-Basch; Melissa Young

Feb 27, 2013

This paper is intended to provide suggestions and examples of innovative funding strategies for these initiatives to cities, states, and other public-sector entities that are considering or have decided to implement or expand subsidized employment programming. In particular, this information may be helpful to sites that operated subsidized employment programs under the TANF Emergency Fund, and that are interested in building on that experience, but can no longer access TANF funds at the previous scale. In the absence of widely available dedicated federal funding for subsidized employment, any entity planning to implement subsidized employment must creatively leverage and blend multiple sources of funding. A number of cities and states have successfully done so, and this paper illustrates those strategies and makes recommendations based on their success. Specifically, it examines three major approaches to pay for some or all of the costs of a subsidized employment program other than accessing dedicated federal or foundation funds:

  1. accessing flexible block grant funds;

  2. using state or local funds based on averting future corrections-related expenses;

  3. tapping into public contracting and bidding opportunities in order to generate program revenue.

While we do not attempt to provide a full explanation of all the rules or challenges associated with each approach, we hope to expand readers' thinking as well as to encourage practitioners who wish to create or expand subsidized employment programs using examples of innovative approaches for using public funds.

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