Tech Collective Defends the Governor’s Workforce Board… and Most of Its Own Revenue

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Another week, another business organization that works with the Governor’s Workforce Board placed an op-ed in the Providence Journal defending the board from the suggestion in the RI Center for Freedom & Prosperity’s Spotlight on Spending report that it be eliminated, with the money going to support economic growth.  (Our preferred method would be to eliminate the sales tax.)

This time, the essay is by Kathie Shields, executive director of Tech Collective:

One of eight industry partners with GWB, we represent more than 18,000 Rhode Island information technology and bioscience professionals. The staff and members of Tech Collective know firsthand the contributions GWB and its programs have made to the state, its workers and families, its employers and industries, and its economy. …

For its 2013 pilot run, Tech Collective was awarded $184,718 for IT On Demand. All of that money went directly to the cost of the program, which included 16 participants. (Note the $218,118 number cited by Spotlight on Spending was the number initially announced by GWB in March 2013; the contracted amount finalized in May 2013 was $33,400 less, while the number of expected participants increased from 15 to 16.) The cost of the program per person equals $11,544. As of this writing, 15 of the 16 participants are employed in IT positions at Rhode Island companies. They are earning an average salary of $44,000 per year.

Nobody should doubt for a moment that Tech Collective’s staff knows the contributions of the board “firsthand.”  According to its 990 form for 2012, Tech Collective took in $209,176, which was down a little from $214,391.  Despite the dip in revenue, its salaries and benefits increased from $148,844 to $169,837.  Of that, Ms. Shields’s salary accounted for $91,500.

Tech Collective also has a Workforce Development Fund division, which took in $550,197, up from $530,287.  (Breaking out a calculator shows that the fund’s increase is only $1,083 less than the Collective’s payroll increase.)

Turning to the RIOpenGov vendor payment module, we find that the Governor’s Workforce Board has given Tech Collective an average of $472,097 every year for the past four.  It dipped to $130,305 in 2012, before rebounding in 2013, but (1) these are the state’s fiscal years, so some of the 2013 payment likely appears on the 2012 990, and (2) the organization is able to float about a quarter million dollars from year to year.

It’s perhaps more relevant to note that the data shows additional payments from the state to Tech Collective Workforce Development fund in the amounts of $272,799 for 2012 and $80,555 for 2013.  Between the two, in other words, the four-year average is $560,435, with the 2012 dip only down to $403,104.

The 990 form for the Collective states that most of its revenue comes from “membership dues.”  What it looks like, however, is that the dues pay for the salaries and a portion of the expenses, while the bulk of the expenses and all of the activities are paid for with government grants.  One might say that Tech Collective’s business model is to charge members a small fee for access to a much larger pool of taxpayer dollars.  It’s as if a discount store like BJ’s or Sam’s Club charged membership dues to pay the employees and a portion of other expenses and all of the products inside were free for members, courtesy of taxpayers.

If the government weren’t involved, then members would either pay for services they considered critical or cease to do so.  Instead, IT and biotech professionals are being subsidized by waitresses, store clerks, the unemployed, and everybody else who pays taxes.



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