Comment on Virginia WIOA Combined State Plan Modification

SUBJECT: Public Comment on Virginia WIOA Combined State Plan Modification, Program Years 2026-2027

Submitted by: The Scaffold Initiative | thescaffoldinitiative.org | policy@thescaffoldinitiative.org

Submitted to: Virginia Board of Workforce Development / Virginia Works (Department of Workforce Development and Advancement)

Date: April 3, 2026

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I. Organizational Identity and Prior Engagement

The Scaffold Initiative is a 501(c)(4) social welfare organization incorporated in Wyoming and operating nationally, with organizational leadership based in Memphis, Tennessee. Our mission is to expand AI and digital workforce readiness for workers facing displacement or barriers to economic mobility. Our Executive Director, Ricky Tucker, is a workforce development practitioner with over 40 years of experience in adult education, business coaching, and career development.

The Scaffold Initiative previously engaged with the Commonwealth on AI workforce readiness policy during the 2026 Virginia General Assembly session. On March 19, 2026, we submitted an inquiry to Executive Director Anthony Reedy regarding the PY 2026-2027 WIOA Combined State Plan Modification comment period. That inquiry was forwarded to the Senate Committee on Commerce and Labor by Hobie Lehman, Senate Committee Operations Director, confirming the General Assembly's interest in the intersection of AI policy and workforce development. We submit this full public comment as a continuation of that engagement, offering substantive recommendations grounded in Virginia-specific workforce data and aligned with recent federal guidance.

II. Support for the Plan Modification

We commend Virginia for undertaking the PY 2026-2027 Combined State Plan modification. The Commonwealth's recent consolidation of a dozen previously disparate workforce programs into the unified Virginia Works agency, combined with groundbreaking legislative action on AI-driven worker displacement, positions Virginia to lead nationally on the integration of AI readiness into public workforce systems. The recommendations below are informed by Training and Employment Guidance Letters 07-25, 05-25, and 03-25; the Department of Labor's February 2026 Artificial Intelligence Literacy Framework; and a detailed analysis of Virginia's regional labor market conditions.

III. The Virginia Workforce Landscape: A Case for Urgency

Virginia's 3.6 percent unemployment rate as of December 2025 masks significant regional disparities that the State Plan modification must address. While Northern Virginia maintains unemployment below 3.8 percent, Southside localities like Emporia City reach 7.3 percent, and Southwest Virginia coal-transition counties range from 5.4 to 6.2 percent. These disparities are not merely geographic — they represent fundamentally different workforce challenges that require differentiated strategies within a unified state framework.

The Virginia Chamber Foundation projects that up to 1.5 million jobs in the Commonwealth — approximately 35 percent of state employment — face significant modification or displacement due to AI integration by 2030. The concentration of Virginia's workforce in office and administrative support (10.5%), business and financial operations (9.7%), and sales (8.8%) means that the occupational groups most vulnerable to generative AI and robotic process automation constitute nearly a third of total state employment.

Critically, labor market data from 2022-2025 reveals a sustained decline in employment for workers aged 22-25 in computer-related occupations, suggesting that generative AI is already absorbing entry-level coding, data analysis, and technical support functions. Virginia businesses are adopting AI at rates above national averages: 6.7 percent currently use AI for production or services, with 10.1 percent anticipating near-term adoption. The workforce development system must match this pace.

IV. Priority Recommendation: AI Literacy as a Foundational WIOA Competency

TEGL 07-25's Pillar V explicitly calls for states to prioritize "AI literacy and skills development across the public workforce system" and create "new models of workforce innovation built to match the speed and scale of AI-driven economic transformation." We urge Virginia to:

1. Formally designate AI literacy as a core competency within the state's Eligible Training Provider framework, enabling WIOA Individual Training Account (ITA) funds to cover structured AI skills programming across all fourteen Local Workforce Development Areas.
2. Adopt the DOL's February 2026 AI Literacy Framework as the statewide standard for AI training curricula, ensuring that local workforce boards procure high-quality, standardized programming rather than fragmented or superficial digital courses.
3. Include AI and digital skills benchmarks in the state's Measurable Skill Gains performance indicators for PYs 2026-2027, consistent with the credential attainment and skills gains reporting required under WIOA Section 116.
4. Partner with community-based organizations that provide contextualized AI training — particularly for adult learners, dislocated workers, and youth — rather than limiting technology training to institutional providers.

Virginia's existing AI credentialing landscape — including the Google AI Professional Certificate, AWS Certified Practitioner pathways, George Mason University's Certificate in Responsible AI, and UVA Darden's AI Essentials for Government Leaders — provides vital entry points. However, these programs primarily target cognitive and administrative upskilling. The State Plan must also address the physical integration of automated technologies in manufacturing, logistics, and energy sectors where Virginia workers are concentrated.

V. Priority Recommendation: Extending the Principles of House Bill 310 Through WIOA

House Bill 310, introduced during the 2026 General Assembly session by Delegate Michael Feggans, would require state agencies to track and report AI impacts on state government positions — including roles eliminated, left vacant, or materially altered by AI deployment — and to develop workforce transition plans for affected state employees. While HB 310 was deferred to 2027 along with most AI-related legislation this session, the principles it embodies signal the General Assembly's recognition that AI-driven displacement requires a structured policy response. The WIOA State Plan Modification should build on this legislative direction by:

1. Explicitly classifying individuals whose occupational roles are materially degraded by generative AI and robotic automation as "Dislocated Workers" under WIOA Title I definitions. HB 310 addresses state employees; the WIOA plan can extend this principle to the private sector, enabling immediate deployment of Rapid Response funds and Individual Training Accounts for AI-displaced workers across the Commonwealth.
2. Developing AI-specific career pivot programming for displaced federal and contractor workers in Northern Virginia, where the region is absorbing thousands of specialized professionals from recent federal workforce reductions. The skills mismatch in NOVA is acute — legacy information technology and bureaucratic competencies must be translated into AI engineering, cloud data architecture, and cybersecurity capabilities.
3. Aligning the workforce transition planning framework contemplated by HB 310 with WIOA Title II adult education to ensure that lower-wage workers (the approximately 1.7 million Virginians earning below $70,000 in household income) who face displacement have structured pathways to reskilling, not just those in state employment.

VI. Priority Recommendation: Regional Strategies for a Bifurcated Economy

Virginia's workforce challenges differ so fundamentally across regions that a single statewide approach will underserve every community. We recommend the State Plan explicitly authorize differentiated regional strategies:

Northern Virginia: Focus on rapid, high-level upskilling — translating specialized federal workforce competencies into private-sector AI, cybersecurity, and cloud architecture roles. The challenge here is skills mismatch, not job scarcity.

Hampton Roads: Leverage the Virginia Maritime & Nuclear Workforce Accelerator model, which provides up to 80 percent reimbursement of approved training costs (capped at $100,000 per employer), to expand AI-integrated training across the defense industrial base. Newport News Shipbuilding and Northrop Grumman are deploying AI for predictive maintenance, supply chain logistics, and cybersecurity — the workforce training infrastructure must match.

Southside and Southwest Virginia: The transition from coal, tobacco, and textiles demands massive investment in advanced manufacturing digital competencies. The Southern Virginia Megasite at Berry Hill (Danville) — a $1.35 billion Microporous battery separator plant expected to create over 2,000 jobs by late 2026 — exemplifies the emerging demand for workers who can operate CNC equipment, industrial robotics, and AI-assisted manufacturing systems. The WIOA plan must establish formal mechanisms to braid federal Title I funds with regional economic development capital, particularly the $2.2 million Workforce Financial Aid program administered by the Tobacco Region Revitalization Commission. This braided funding model is essential for financing capital-intensive AI and advanced manufacturing training infrastructure in communities that lack the local tax base to support it independently.

VII. Priority Recommendation: Governor's Reserve and Waiver Authority for AI Pilot Programs

Under TEGL 05-25's waiver framework and WIOA's Governor's Reserve provisions, Virginia has significant authority to rapidly scale AI training without the delays inherent in traditional procurement. Virginia Works demonstrated this capacity by allocating $1.8 million in competitive grants for workforce innovation and career pivots in PY 2024. We recommend:

1. Ring-fence future Governor's Reserve allocations for AI training pilot programs, building on the precedent established by the "Investing in Workforce Development Innovation" and "Facilitating Career Pivots" initiatives.
2. Request waiver authority from DOL to bypass restrictive incumbent worker training caps and customized training employer match requirements. These waivers would allow local workforce boards to partner with employers to preemptively upskill current employees on AI systems before their roles are automated — a retention-focused strategy that is more cost-effective and socially stabilizing than post-displacement retraining.
3. Explore OJT reimbursement waivers extending to AI skills roles in non-traditional settings, consistent with TEGL 05-25's encouragement to raise OJT reimbursement caps and expand incumbent worker training.

VIII. Priority Recommendation: Worker Mobility and AI-Powered Tools

TEGL 07-25's Pillar II calls for states to integrate "AI-powered tools including comprehensive talent marketplaces composed of comprehensive learner records or learning and employment records solutions, credential registries, and skills-based job description generators." We recommend:

1. Virginia adopt or pilot a competency-based AI skills credential recognizable across all Virginia Career Works American Job Centers for job matching purposes.
2. Virginia Career Works staff across all fourteen LWDAs receive training on AI tools and be empowered to recommend AI-augmented job search and skills assessment tools to participants.
3. Virginia Career Works leverage the consolidated data infrastructure enabled by the Virginia Works consolidation to build a unified learner record system that tracks AI competency attainment across all Title programs.

IX. Addressing the Federal Grant Gap

Virginia was conspicuously absent from the Department of Labor's September 2025 Industry-Driven Skills Training Fund awards, which distributed over $86 million to fourteen states for AI infrastructure, shipbuilding, and advanced manufacturing training. This is notable given Virginia's massive shipbuilding presence in Hampton Roads and expanding data center infrastructure in Northern Virginia. The State Plan Modification should position Virginia to aggressively pursue future federal competitive grants by establishing the programmatic infrastructure — AI-focused pilot programs, employer partnerships, and measurable outcomes — that strengthen competitive grant applications. In the interim, WIOA Title I formula funds and the Governor's Reserve must fill the gap.

X. The Scaffold Initiative's Capacity

The Scaffold Initiative is developing capacity to serve as a community partner in implementing AI and digital literacy training integrated with public workforce systems nationwide. We offer:

• Curriculum and facilitation for AI/digital skills training aligned to employer demand
• Train-the-trainer capacity for Virginia Career Works staff across all fourteen LWDAs
• Partnership development with regional employers to validate competencies and create hiring pipelines
• Policy analysis and technical assistance on AI workforce integration, grounded in our engagement with NIST, the Department of Labor, and state workforce agencies across the country

We have submitted public comments on AI workforce readiness to multiple state WIOA processes and federal agencies, including NIST's AI 800-2 framework. We welcome the opportunity to deepen our engagement with the Virginia Board of Workforce Development and Virginia Works.

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Respectfully submitted,

Ricky Tucker
Executive Director, The Scaffold Initiative
policy@thescaffoldinitiative.org
thescaffoldinitiative.org