On June 13, the California Legislature approved the State Budget Act of 2025 (SB 101), allocating a total of $321.1 billion, including $228.4 billion from the General Fund and $15.7 billion set aside in reserves. This budget addresses a $12 billion shortfall through a combination of $3.5 billion in reductions, $7.8 billion in borrowing and revenue measures, and $1 billion in fund shifts and deferrals.
While the Budget Act addresses the shortfall and includes several key investments, it also results in numerous cuts and delays across various programs. These outcomes reflect another difficult budget year, shaped by federal policies affecting California’s economy, rising costs within the Medi-Cal program, and the devastating Los Angeles wildfires, which influenced state spending priorities as the state responded to community needs. Some notable investments include $1.5 million to create an interagency body focused on education and workforce coordination, support for formerly justice-involved students attending community colleges, and expanded investment in credit for prior learning initiatives.
Governor Gavin Newsom has until late June to act on the budget. His options include signing the budget into law, vetoing it entirely, or issuing line-item vetoes to remove specific appropriations. The California EDGE Coalition will issue a full summary once the final budget is enacted in July.
Impact on LA:
The state budget carries wide-reaching implications for LA, especially in areas such as higher education, child care, and services for immigrant and underserved communities. Numerous provisions position LA to benefit from protected and expanded funding in sectors that are core to regional equity. However, the budget also includes dire impacts, particularly to the safety net, that will deeply affect working families. Below are the highlights of how the state budget could shape conditions across the region:
Impact on Workforce Development Systems
- The Legislature’s agreement invests $1.5 million to maintain a cross-agency planning and coordination entity for education and workforce development. This funding could help drive more cohesive policy integration between state agencies, higher education institutions, and local workforce boards, which is critical for aligning programs in labor markets as complex as LA County. This holds promise for LA, where partnerships between colleges, employers, workforce boards, and CBOs are essential to building equitable career pathways, especially in tech, healthcare, green energy, and skilled trades.
- The Youth Jobs Corps will see a 25% budget reduction, which may directly impact youth-serving workforce initiatives in cities such as LA, where the program has helped place opportunity youth into community-centered employment and training pathways.
- The budget provides $17 million to extend the operation of the California Regional Initiatives for Social Enterprises (CA RISE) program for two more years. Specifically, this extension benefits LA’s regional partnership by helping Angelenos who experience high barriers to employment obtain good jobs and stay employed. LA:RISE has expanded from 10 to 38 partners across LA County and has provided transitional employment to over 7,500 Angelenos.
- An allocation of $5 million to develop a grant program, specifically for LA Regional Consortium community colleges in areas recovering from the Palisades and Eaton fire disaster, which will assist workforce recovery efforts and career technical education workforce development.
Higher Education Accessibility and Institutional Support
- The budget modifies the May Revision proposal by redirecting $492.4 million from community colleges to TK-12 to support transitional kindergarten expansion. It instead provides $259 million in prior-year and current-year funds for community college activities. This has the unfortunate potential of redirecting nearly $500 million from LA’s community colleges to transitional kindergarten expansion, which may delay critical programs serving underserved students. While the shift supports early learning gains in LA’s TK-12 system, it also forces community college leaders to seek alternative funding sources and reprioritize equity-focused initiatives.
- The changes to the Rising Scholars program authorize the California Community College Chancellor’s Office to enter into agreements with all community colleges, rather than capping it at 65 community colleges. This change will allow the Los Angeles Community College District (LACCD) to provide funds for services in support of postsecondary education for justice-involved students in LA.
- The budget approves the May Revision adjustments to the Cal Grant program, allocating $2.3 billion in 2023-24, $2.5 billion in 2024-25, and $2.8 billion ongoing from 2025-26 to address growing demand. Maintaining this funding will significantly expand college access for thousands of LA students by lowering financial barriers and increasing aid at institutions like LACCD. It will also help stabilize enrollment, enhance student support services, and advance equity for students of color, first-generation students, and non-traditional learners.
- The budget includes $15 million one-time Proposition 98 for Dream Resource Liaisons, designated staff responsible for providing support and resources to undocumented students. While exact numbers are unavailable, the combination of LACCD’s size and the county’s demographics indicates that the district plays a pivotal role in providing educational opportunities to undocumented students in the region.
- Includes $15 million one-time and $5 million ongoing to California Community Colleges to support Credit for Prior Learning (CPL) activities. In Los Angeles, many residents bring workforce, military, or immigrant experience to their education. Expanding CPL can reduce time and cost to a degree while improving outcomes for underserved and working adult learners. With new state funding, LA-area community colleges can scale CPL infrastructure, support equitable student access, and align with regional workforce efforts to accelerate credentialing in high-demand industries like healthcare, green energy, and technology.
Social Safety Net: Immigrant Services and Child Care Access
- LA is home to the largest immigrant population in California, including many undocumented individuals and mixed-status families. The Legislature’s change to the Medi-Cal enrollment freeze, delaying new coverage for undocumented adults age 19 and over until January 1, 2026, with only a three-month grace period for re-enrollment, will limit access to care for many LA residents in the near term.
- The budget rejects the Governor’s proposal to tie the expansion of the California Food Assistance Program (CFAP) to a state budget trigger. CFAP provides state-funded food benefits to immigrant communities who don’t qualify for federal CalFresh benefits. The updated budget proposal instead keeps the current rule that the expansion depends on funding approved by the Legislature. The expansion is still planned to begin on October 1, 2027. The agreement also reduces CFAP funding for outreach and automation in 2025-26 from $38 million to $12 million, with the remaining $26 million delayed until 2026-27. This delay could make it harder for LA County and local groups to start planning and enrolling eligible residents, especially in communities with high need and diverse populations.
- With regards to child care access, the budget funds a cost-of-living adjustment (COLA) to help existing programs manage rising costs, instead of adding new child care slots as the Legislature had proposed. It keeps the commitment to fund 146,000 new slots and maintains the goal of reaching 200,000 by 2028. The budget includes $70 million to support child care and preschool programs using updated COLA rates. For the Emergency Child Care Bridge Program, it reduces funding by $30 million, less than the $42.7 million cut originally proposed by the Governor.