On June 27, Governor Gavin Newsom signed the Budget Act of 2025, which outlines about $321.1 billion in total state spending, including $228.4 billion from the state’s main account, the General Fund. To deal with a projected $11.8 billion budget shortfall for the 2025-26 fiscal year, the state is taking several steps, including cutting spending by $2.8 billion this year, with deeper cuts expected over the next few years reaching $11.9 billion by 2028-29; using savings from the state’s rainy day funds; and shifting money from special-purpose funds to cover gaps. These actions are designed to keep the budget balanced without raising taxes, while continuing to support key public services Californians rely on.
To preserve long-term fiscal health, the budget maintains approximately $15.7 billion in reserves and takes steps to limit future cost growth. This includes reducing or eliminating some one-time investments from prior budgets and making targeted cuts to ongoing programs, while still protecting funding for critical initiatives that support Californians, most notably underrepresented communities, working families, opportunity youth, and adult learners.
Despite fiscal pressures, the enacted budget prioritizes stability for key sectors, including higher education, advancing key components of the Master Plan for Career Education, and emphasizes structural changes to maintain budget resilience and protect vital state programs into the future.
The enacted budget does not yet account for the potential fiscal impacts of major federal spending cuts included in House Resolution 1, signed in early July. The Administration is continuing to assess those impacts and may propose adjustments in coordination with the Legislature.
View the Governor’s Full 2025-26 Enacted State Budget Summary here.
Provided below is an overview of the 2025-26 enacted budget related to education, workforce development, and social safety net issues that are aligned with EDGE’s 2025 Policy Priorities.
EDUCATION
Despite a tough budget year, California’s 2025-26 state budget continues to invest in higher education with a focus on equity, access, and student success. Key funding supports community colleges and financial aid to expand career pathways, improve affordability, and help more students succeed, especially those from underserved communities. The state also uses one-time funds and reserves to keep education funding stable, while new initiatives support the Governor’s vision for a student-centered, career-focused system.
- Student Centered Funding Formula (SCFF) and Cost-of-Living Adjustments (COLA) Increases. The budget includes several adjustments to the SCFF to support enrollment growth and cost pressures in the CCC system. It provides nearly $140 million to fund 2.35% enrollment growth over two years ($100 million for 2.28% growth starting in 2024-25, and $40 million for 0.57% growth starting in 2025-26). This reflects a higher level of growth than is typically funded, but will continue to support colleges to expand access, offer more classes, and provide support services to accommodate students. To address rising operational costs, the budget also reflects a 2.3% COLA (up from 1.07% in the previous year). This translates to an ongoing increase of $217.4 million in Proposition 98 General Fund for apportionments and an ongoing increase of $30.1 million in Proposition 98 General Fund for selected categorical programs and Adult Education programs. The budget includes a one-time boost of $210.2 million to fully fund community college payments for 2024-25, and adds $104.7 million in ongoing funding to support them in 2025-26. To help maintain funding levels, $408.4 million in payments will be delayed until 2026-27. In addition, the state will use $49.7 million from the Proposition 98 Rainy Day Fund to help cover community college funding needs and keep programs operating.
- Credit for Prior Learning Expansion. The budget approves $15 million one-time and $5 million ongoing Proposition 98 General Fund for the Credit for Prior Learning Initiative. Credit for Prior Learning is a critical initiative enabling more Californians to convert their real-world experience into college credits. This budget allocation is one of the goals in the Master Plan for Career Education.
- Rising Scholars Expansion. The budget provides $10 million in ongoing Proposition 98 General Fund to expand the Rising Scholars Network. The Rising Scholars Network is a statewide initiative within the CCC system that supports students who are currently or formerly justice-involved. The network aims to expand access to higher education for justice-involved individuals, recognizing education as a critical tool for rehabilitation and reducing recidivism.
- Student Support Block Grant. The budget includes a one-time $60 million boost for community colleges from Proposition 98 for a student support block grant. Each district will get $150,000 upfront, and the rest is divided based on student numbers and financial need. Colleges can use the funds starting July 1, 2023, to support students with basic needs like food, housing, transportation, mental health, and help for student parents. The Chancellor’s Office must report on the use and impact of the funds in 2028 and 2031.
- EMT and Paramedic Pre-apprenticeship. The budget funds an increase of $10 million, one-time Proposition 98 for community college support to the California Firefighter Joint Apprenticeship Council to conduct Emergency Medical Technician and Paramedic Pre-apprenticeship Training Academies.
- California Healthy School Food Pathways Program. The budget includes an increase of $10 million, one-time Proposition 98 General Fund for community colleges to support the California Healthy School Food Pathway program, which strengthens the school food service workforce through apprenticeship and training programs.
- Career Technical Education (CTE) Investment. The budget adopts $150 million one-time Proposition 98 General Fund for career technical education and career pathways programming.
- Dreamer Resource Liaisons Investment. The budget approves an increase of $15 million, one-time Proposition 98 for community colleges to support Dreamer Resource Liaisons. Community college districts may use the funds to provide additional student support services. Dreamer Resource Liaisons are designated staff members at community colleges to assist undocumented students in accessing resources and support services, such as navigating financial aid, legal aid, and other crucial resources to pursue their education.
- Cradle-to-Career Data System. The budget adds one new staff position with $687,000 in General Fund support for 2025-26, and $187,000 annually starting in 2026-27, to help manage work related to the Cradle-to-Career Data System. It also provides a $3 million ongoing increase from Proposition 98 to support both the California College Guidance Initiative (CCGI) and the Cradle-to-Career Data System. CCGI helps students plan and prepare for college by providing tools and resources for academic planning, college applications, and financial aid.
- Proposition 98 Split Impact on Community Colleges. The budget adopts a major shift in how Proposition 98 funds are allocated between transitional kindergarten (TK) expansion and community colleges. Beginning in 2025-26, TK expansion funding will be directed exclusively to the TK-12 education portion of the Proposition 98 Guarantee, reducing ongoing community college funding by $232.9 million. While the budget reallocates this amount to support TK-12 implementation to ensure universal TK does not strain existing K-12 programs, this shift significantly impacts community colleges, both financially and operationally. It reduces their share of Proposition 98 funds, threatens local funding stability, and limits their ability to plan, hire, and deliver essential student support services.
Student Financial Aid Access
- Cal Grant Program Caseload Adjustments. The budget updates Cal Grant spending based on the latest student enrollment estimates. It now expects to spend $2.3 billion in 2023-24, $2.5 billion in 2024-25 (including a one-time increase of $94.7 million), and $2.8 billion in 2025-26 (with an ongoing increase of $228.7 million). These increases are mostly due to more students than expected qualifying for and attending schools that offer Cal Grants.
- Emergency Financial Assistance Grants. The budget includes an increase of $20 million, one-time, Proposition 98 to provide flexible emergency financial aid assistance to California Dream Act Application (CADAA) filers, supporting immigrant students.
- Community Support for Financial Aid Applications. The budget includes an increase of $5.1 million, one-time Proposition 98 for financial aid outreach through community-based organizations. To be eligible for funds, organizations must have previously participated in the federal FAFSA Student Support Strategy Initiative. Grantees selected by the Chancellor’s Office can use the funds over two years to do outreach and provide support to students in completing FAFSA and CADAA forms.
WORKFORCE DEVELOPMENT
Workforce development remains a key priority in the 2025-26 budget, with targeted investments to support job access, training pathways, and equitable economic opportunity, particularly for individuals facing systemic barriers to employment. While the budget includes difficult fiscal decisions, it continues to advance strategies that align workforce preparation with regional industry needs and emerging economic priorities. Funding supports apprenticeships, reentry programs, social enterprises, and efforts to strengthen connections between employers, educators, and job seekers. At the same time, several workforce programs did not receive additional investment this year, highlighting the importance of sustained, long-term funding to meet the state’s inclusive workforce goals.
- Education and Workforce Development Coordinating Council. The budget includes $1.5 million to enhance planning and coordination in higher education and workforce development, one of the goals in the Master Plan for Career Education.
- Department of Industrial Relations Apprenticeship Training Grant Expansion. The budget allocates a one-time $18.2 million from the Apprenticeship Training Contribution Fund to support apprenticeship programs in construction and related trades.
- Helping Justice-Involved Reenter Employment (HIRE) Program. The budget approves $10 million one-time General Fund for the California Workforce Development Board (CWDB) for the HIRE Program, which provides grants to eligible organizations to support justice-involved individuals in accessing employment opportunities, workforce training programs, and supportive services.
- Regional Coordination for Career Education and Training. The budget includes a one-time $1 million General Fund allocation to the Labor and Workforce Development Agency (LWDA) to evaluate regional coordination models in alignment with the Governor’s Master Plan for Career Education. The goal is to explore how these models can be expanded into sustainable platforms that bring together educators, workforce training providers, and employers to better align programs with labor market needs. LWDA’s efforts will be guided by the State Economic Blueprint and the 13 regional plans.
- Regional Initiative for Social Enterprises (CalRISE) Program. The budget sustains a one-time $17 million General Fund allocation for CalRISE, which offers financial and technical assistance to employment social enterprises to strengthen their capacity to create and retain jobs in underserved communities. These enterprises are businesses that provide employment, on-the-job training, and tailored support to individuals facing significant barriers to work, including homelessness, justice system involvement, substance use challenges, or mental health conditions. This investment will also foster stronger connections between employment social enterprises and the thirteen California Jobs First Regional Collaboratives, aligning job creation and workforce training with the priority industry sectors identified by each Collaborative.
- Supporting Los Angeles CTE Workforce Development. The budget includes a one-time $5 million increase in Proposition 98 funding for community colleges in the Los Angeles Regional Consortium to support workforce recovery and career technical education (CTE) development efforts tied to the region’s recovery from the recent wildfires.
- Social Entrepreneurs for Economic Development (SEED) Initiative. The budget includes $7.5 million for the SEED initiative to be allocated in 2026. SEED supports the entrepreneurship of immigrants and English language learners who face significant employment barriers.
- Behavioral Health Workforce Initiative. Starting in July 2025, the state will invest $1.9 billion over five years to grow and support the behavioral health workforce. The funding includes $143 million from the Behavioral Health Services Fund, $808 million from the Designated State Health Program, and $950 million in federal funds. The initiative will be managed by the Department of Health Care Access and Information.
- Youth Service Corps. The budget protects $68.1 million in ongoing General Fund to continue support for the Youth Service Corps. This program offers community service opportunities to opportunity youth, particularly former foster, justice-involved, and unemployed youth, helping them gain valuable skills and explore career paths through work in areas like public service, food access, and climate action.
- College Corps Program. The budget provides $5 million in 2025-26 and $83.6 million in ongoing funding starting in 2026-27 to extend and grow the College Corps program beyond July 30, 2026. This funding will expand service opportunities for over 4,000 undergraduate students each year and support partnerships with more than 50 colleges and universities, including CSU, UC, CCC, and private institutions. It will also help create an alumni and workforce development program to support career pathways for College Corps fellows.
- Related and Supplemental Instruction (RSI) Program – COLA Adjustment. The budget includes a 2.3% COLA for the RSI Hourly Reimbursement program, providing $930,000 in Proposition 98 funds to reimburse apprenticeship providers for hours of RSI delivered to apprentices. As one of several reimbursement options available to apprenticeship programs, the RSI program plays a key role in workforce development. The program increases the number of students who acquire credentials, certificates, or specific skill sets that prepare them for an in-demand job, and increases the number of existing CTE students working in their field of study upon exiting. The program also advances equity, with 70% of apprentices served being from traditionally underrepresented student groups.
- No additional funding for the Apprenticeship Innovation Fund (AIF). The budget did not propose any new funding for AIF. Established in 2022, AIF represents a vital state investment in expanding and sustaining innovative apprenticeship programs aligned with the Interagency Advisory Committee on Apprenticeships IACA. Unlike traditional models in the building and fire trades, AIF supports the growth of registered apprenticeships in high-demand sectors such as healthcare, advanced manufacturing, technology, education, and more. The program provides essential funding and reimbursement to apprenticeship partners and local education agencies to cover the operational and training costs necessary to run these programs effectively and equitably.
- No additional funding for High Road Training Partnerships (HRTPs). The budget did not propose any new funding for HRTPs. The HRTP initiative started as a $10M demonstration project designed to model partnership strategies for the state. Ranging from transportation to health care to hospitality, the HRTP model embodies the sector approach to industry partnerships that deliver equity, sustainability, and job quality.
- No additional funding for the CA Apprenticeship Initiative (CAI). The budget did not include any new funding for the CAI. The CCC had initially requested a $60 million ongoing increase to meaningfully expand registered apprenticeship programs through CAI, supporting the Governor’s goal of reaching 500,000 earn-and-learn apprenticeships by 2029. CAI offers grants to community colleges, K-12 districts, and their industry partners to develop innovative, high-quality apprenticeship opportunities that connect learners with real-world career pathways.
- No additional funding for Breaking Barriers to Employment Grants. The budget did not include additional funding for the Breaking Barriers to Employment program. Community-based organizations are essential partners in bridging underrepresented workers to training and career pathways. This program equips individuals from underserved communities with the supplemental, supportive, and wraparound services necessary to access, persist in, and complete workforce and education programs – ultimately leading to meaningful, family-sustaining employment.
SOCIAL SAFETY NET
The 2025-26 budget sustains California’s commitment to its most underserved communities by investing in core safety net programs that promote stability, equity, and long-term well-being. Although the state is facing fiscal constraints, the budget improves access to cash assistance and child care. However, some programs face challenges and delays in funding tied to future state revenues.
- Child Care COLA. The budget provides an increase of $59.4 million ongoing General Fund for a cost-of-living adjustment in 2025-26 for child care programs.
- Emergency Child Care Bridge Program. The final budget reduces funding for the Bridge Program by $30 million starting in 2025-26, based on the expected use of the program. However, it still maintains $63.7 million in ongoing funding, including $53.4 million from the General Fund. The Bridge Program helps place foster children in stable child care by offering time-limited vouchers and navigator services to support relatives, parenting youth in court jurisdiction, and foster/resource families in accessing child care upon placement.
- California Work Opportunity and Responsibility to Kids (CALWORKs). The budget includes $6.2 billion for CalWORKs, which provides temporary cash aid and job support to families paid low wages with children. About 363,766 families are expected to receive benefits each month in 2025-26. It also redirects $4.6 million in savings to county funding in 2025-26 and $14 million ongoing, and includes $3.3 billion for related programs like developmental services, community college child care, and Cal Grants. The budget makes changes to simplify and improve CalWORKs for families and counties. CalWORKs Student Services, which supports college students receiving cash aid, receives a 2.3% cost-of-living increase, totaling about $1.28 million.
- Enrollment Freeze for Full-Scope Medi-Cal Expansion for Undocumented Adults (Age 19 and Older). The final budget partially addresses the state budget deficit through an enrollment freeze on full-scope Medi-Cal for undocumented adults, generating projected savings of $77.9 million in 2025-26, growing to $3.3 billion in 2028-29. Although these savings are primarily achieved from expected reductions in enrollment in Medi-Cal coverage for undocumented Californians over time, freezing new enrollments would limit access to vital healthcare services for many Californians.
- California Food Assistance Program Expansion (CFAP). The final budget approves a future spending commitment (subject to appropriation) for the expansion of $117.2 million in 2027-28, growing to $163.2 million in 2028-29. CFAP extends food benefits to Californians who are excluded from federal nutrition programs due to their immigration status. However, tying the 2027-28 funding to future state revenues creates harmful uncertainty and delays urgently needed support. This approach prolongs food insecurity, places additional strain on local food banks, and defers the health and economic benefits that come with consistent access to food.
For questions, please contact Jason Henderson, EDGE Policy Analyst, at jhenderson@caedge.org.
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