On January 10th, Governor Gavin Newsom unveiled the 2024-25 state budget proposal – a $291 billion spending plan, with an updated deficit projection of $37.9 billion. To address this shortfall, the Governor is proposing various delays and cuts to programs, including the use of $12 billion from the rainy-day fund account, along with other reserves. To access the state’s reserves, a declaration of a state budget emergency is required to withdrawal the funds. The budget proposal reduces and delays spending on various workforce development programs that were funded in last year’s budget relating to apprenticeships and other workforce training programs. Additionally, there are no new dollars being proposed to implement Cal Grant Reform, the state’s largest student financial aid program, leaving out countless students who need this aid to complete their education.
Despite ongoing fiscal challenges, the budget proposal largely maintains historic investments made in previous budget years, such as funding to support community colleges, student support services, career technical education, dual enrollment pathways, and other skills training programs intended to provide economic mobility for returning students, workers, and opportunity youth. As more budget details emerge in the coming months, California must remain a leader in centering equity for all Californians facing socioeconomic barriers. EDGE stands ready to work with the Administration, Legislature, and partners to ensure industry, workers, returning students, opportunity youth, and underserved communities are provided the support they need as we continue to navigate these economic uncertainties.
Provided below is an overview of the proposed 2024-25 budget related to education, workforce development, and social safety net issues that are aligned with EDGE’s 2024 Policy Priorities.
Despite facing another challenging year of budget projections, the proposed budget maintains its recent investments in supporting community colleges and students. Funding for initiatives like strengthening dual enrollment pathways, adult education programs, and other student-centered programs remains largely intact. Nevertheless, access to student financial aid remains a hurdle for many, especially for returning students and opportunity youth. This year’s budget includes:
- Community College investments. The proposal incorporates a $29.6 million ongoing increase to fund a 0.5% growth in enrollment and an additional $69.1 million ongoing to support a 0.76% Cost of Living Adjustment (COLA) increase. While this COLA increase is relatively smaller than in previous years, it remains the same for the K-12 system. Additionally, the proposal includes $9.3 million ongoing to back a 0.76% COLA for selected categorical programs, including Adult Education and other student support programs. The budget also proposes a withdrawal $235.9 million from the Prop. 98 reserves in 2023-24 and $486 million in 2024-25 to support the Student-Centered Funding Formula (SCFF).
- Funding to expand nursing programs. An increase of $60 million one-time Prop 98 General Fund to expand nursing programs and Bachelor of Science in nursing partnerships to develop, educate, and maintain the next generation of registered nurses through the community college system.
- Delays funding for student housing. The budget cuts $194 million from the 2023-24 fiscal year, eliminating the Student Housing Revolving Loan Fund. Additionally, previously approved future investments, including $300 million in the 2024-25 fiscal year, are put on hold. The budget aims to present a proposal for a statewide lease revenue bond in the May Revision, with the goal of supporting the community college section of the Student Housing Grant Program.
- No funding for Cal Grant Reform. The 2022 Budget Act included provisions related to the implementation of the Cal Grant Reform Act, which aims to bring significant changes to California’s largest student financial aid program. The proposed reforms involve replacing the current Cal Grant program with a new version that introduces a Cal Grant 2 for eligible community college students and a Cal Grant 4 for eligible four-year university students. Despite attention to the fiscal conditions outlined in the 2022 Budget Act, there is no additional funding allocated for Cal Grant Reform implementation this year. The Governor expresses the intention to engage in discussions with the Legislature and partners on this matter. EDGE will continue to advocate for financial aid accessibility for all students, particularly for returning students and opportunity youth, who continue to face barriers to eligibility such as GPA verification requirements.
- Governor’s Master Plan on Career Education. Last year, Governor Newsom issued an executive order, initiating a comprehensive endeavor to reshape education and workforce systems to better mirror the realities faced by Californians. Despite budget challenges, this multi-year initiative aims to optimize the delivery of existing investments and formulate policy proposals for improved future system alignment. To achieve this, the Governor’s Office is assembling interagency teams at both state and regional levels, under the Governor’s Council for Career Education and as part of the K-16 Regional Collaboratives. These teams will leverage the substantial workforce investments made in previous years, including the publication of the Governor’s Master Plan for Career Education by Winter 2024, with a focus on career pathways/passports, hands-on learning, real-life skills, collaboration between governments and employers, and skills map/skills transcripts.
- Funding to support Cradle-to-Career Data System. The budget proposes an increase of $5 million ongoing Prop 98 General Fund to support the C2C’s Data System, CA College Guidance Initiative.
Budgets from previous years marked a significant commitment to the business community and workforce training programs. These initiatives aimed to help employers maintain their workforce and empower individuals facing employment barriers through skills training. However, the Governor’s current budget suggests postponements and reductions in essential workforce programs in response to the deficit. The budget proposes the following:
- Cuts to High Road Training Partnerships. The budget proposes to cut $45 million General Fund in 2023-24 for the High Road Training Partnerships program at the CA Workforce Development Board. The Budget maintains $90 million over two years for this program. HRTP expands workforce training partnerships that are worker-centered, industry-led and focused on equity, job quality, and sustainability.
- Cuts to the Women in Construction Unit. The budget proposes to cut $5 million General Fund ongoing for the Women in Construction Unit at the Department of Industrial Relations – maintaining $10 million for this program. The Women in Construction Unit is intended to support women and nonbinary individuals in the skilled trades sector.
- Cuts to emergency medical tech workforce. The budget proposes to cut $10 million to the Emergency Medical Technician training program at the Employment Development Department (EDD). The Budget maintains $30 million General Fund for this program over two years.
- Cuts to the Low Carbon Economy Program. The budget proposes to cut $15 million General Fund to the Low Carbon Economy Grant Program at the CA Workforce Development Board. The Budget maintains $30 million over two years ($15M from the General Fund and $15 from Greenhouse Gas Reduction Fund). This program prioritizes quality jobs and upward mobility for underserved communities, offering skills training, support services, and placement assistance in climate resilience sector.
- Cuts to the Displaced Oil and Gas Worker Pilot. The budget proposes to cut $10 million General Fund for the Displaced Oil and Gas Worker Pilot Fund at EDD – maintaining $30 million General Fund. This program is intended to meet the needs of displaced workers in the oil and gas sector, facilitating their transition into industries aligning with their skills, expertise, and offering comparable wages.
- Delays funding to the California Jobs First (formerly the Community Economic Resilience Fund). The budget proposes to delay $300 million from this program and maintains $100 million General Fund annually in 2024-25 through 2026-27 for the program. California Jobs First is an inter-agency partnership to support new strategies to diversify local economies and develop industries that create high-quality, broadly accessible jobs for all Californians in the transition to a carbon-neutral economy.
- Delays funding to the Apprenticeship Innovation Fund. The budget proposes to delay $40 million General Fund to 2025-26 and 2026-27 ($20M each year) for the Apprenticeship Innovation Fund (AIF) at the Department of Industrial Relations. AIF was established in 2022 as a new funding source for innovative apprenticeship programs associated with the Interagency Advisory Committee on Apprenticeships (IACA). AIF’s purpose is to support sponsors of IACA apprenticeship programs in both sustaining and scaling their initiatives for apprentice training.
- Delays funding to the CA Youth Apprenticeship Program. The budget proposes to delay $25 million General Fund to 2025-26 for the Youth Apprenticeship Program. This program is a new funding source to develop and test innovative practices to increase the participation of opportunity youth in pre-apprenticeship and apprenticeship programs and demonstrate the impact of apprenticeship on employment and earnings outcomes for OY.
- Delays recent funding investments to the health care workforce sector. The budget proposes to delay millions in recent health care workforce investments until 2025-26. Specifically, $140.1 million General Fund spending for the nursing and social work initiatives administered by the Department of Health Care Access and Information; and $189.4 million Mental Health Services Act Fund spending for the social work initiative, addiction psychiatry fellowships, university and college grants for behavioral health professionals, expanding Master of Social Work slots, and the local psychiatry behavioral health program overseen by the Health Care Access and Information Department.
- Delays funding to the Goods Movement Workforce Training Campus. A delay of $40 million General Fund for a Goods Movement Workforce Training Facility in Southern California. The Budget includes $20 million General Fund for this purpose in both 2025-26 and 2026-27. The training center will focus on developing worker skills, as well as up-skilling and re-skilling workers, so they can adapt to the shipping industry’s evolving needs, including training workers in green and zero-emissions technologies.
- Labor and Workforce Development Fund. The budget proposes taking out a loan of $125 million from the Labor and Workforce Development Fund, which is currently not earmarked for operational or programmatic purposes. This loan is intended to offset General Fund spending.
Social Safety Net
California’s working families, especially underserved communities of color, continue to encounter economic challenges. Whether it’s a shortage of healthcare, inadequate access to food, childcare issues, or the struggle to find affordable housing, these difficulties affect their capacity to pursue education or participate in skills training programs. The proposed budget recommits to health care for all, and food for all, while delaying access to food resources for undocumented immigrants. Resources to address food insecurity and child care access are needed more than ever to uplift communities out of poverty. The Governor’s budget proposes the following:
- Maintains commitments to healthcare and food access for immigrants. The budget continues its commitment to provide health care coverage to undocumented immigrants, which begins January 2024, including food access for Californians 55 and over regardless of immigrant status by September 2025. However, the budget does not include new funding for undocumented immigrants 54 and under to access the CA Food Assistance Program.
- No commitment made for undocumented immigrants to receive unemployment insurance benefits. Over the last two years, there have been legislative efforts to provide unemployment insurance benefits to excluded immigrant workers in California who contribute to our state’s economy and cannot access these benefits due to immigration status. The budget proposal does not make a commitment to provide such benefits, continuing to hinder the lives of working immigrants who continue to be left out of our state’s prosperity.
- Maintains commitment to child care reform. As part of the 2021 Budget Act to expand access to subsidized child care slots, the budget maintains this commitment including $2.1 billion to fund 146,000 new subsidized child care slots expected to be filled by 2024-25, working towards the goal of creating over 200,000 new slots by 2026-27. Additionally, the budget maintains funding ($723.8 million General Fund) to implement an agreement with Child Care Providers United – California and the parity provisions for non-represented providers, including working towards a single rate structure and a new way to estimate child care costs. By July 2024, California plans to submit a state plan for approval of this new cost estimation approach to the federal Administration for Children and Families.
To see last year’s investments in education and workforce development, view our 2023-24 budget overview here.
For questions, please contact Anna Alvarado, EDGE Policy Director, at email@example.com.
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