On June 29, Governor Gavin Newsom signed the Budget Act of 2026-27, which outlines $351.7 billion in total state spending, including $251.5 billion from the state’s General Fund. The state enters 2026-27 with a balanced budget and no projected deficit for this year or next, a shift from the multibillion-dollar shortfall addressed in last year’s budget. This reflects higher-than-projected state revenues, a mix of spending and revenue solutions, and continued use of budget reserves.
The budget builds total reserves of roughly $35.2 billion and reduces the state’s projected structural deficit for 2029-30 from $23 billion to $8.4 billion. This includes changes to one-time investments and ongoing program costs, alongside continued funding for programs that serve underrepresented communities, working families, opportunity youth, and adult learners.
Despite the improved fiscal picture, the enacted budget continues to prioritize stability for key sectors, including higher education, advancing key components of the Master Plan for Career Education, and emphasizing structural changes to maintain budget resilience and protect vital state programs into the future.
The enacted budget also takes steps to protect immigrant communities and underserved working families from the fiscal impacts of federal spending cuts under the Federal House Resolution 1. The Administration and Legislature will continue to monitor those impacts and may propose further adjustments as federal implementation continues.
View the Governor’s Full 2026-27 Enacted State Budget Summary here.
Provided below is an overview of the 2026-27 enacted budget related to education, workforce development, and social safety net issues that are aligned with EDGE’s 2026 Policy Priorities.
EDUCATION
- Office of the California Education Interagency Council (CEIC): Approves 4 new permanent positions to staff up the newly created CEIC, a cross-agency body established to improve coordination and alignment across California’s education and workforce systems. These positions are absorbed within existing agency resources, with no new dollar appropriation.
- Cradle-to-Career Data System (C2C): Maintains critical funding to continue implementing the data system, including $1.3 million one-time funding for data collection related to the federal Workforce Pell Grant Program, and a requirement that data providers enter into a memorandum of understanding to support data-sharing.
- Student Support and Discretionary Block Grant: Provides $5 billion one-time Proposition 98 General Fund for the Student Support and Professional Development Discretionary Block. These funds help schools cover rising costs and support statewide priorities, including career pathways and dual enrollment expansion under the Master Plan for Career Education, and community school and neighborhood partnerships.
- Dual Enrollment Expansion: Provides $100 million one-time Proposition 98 General Fund for dual enrollment expansion, including instructional minutes flexibility, a 75% set-aside for College and Career Access Pathways (CCAP) programs, dual credit clarifications, and technical assistance via the CA Community College Chancellor’s Office (CCCCO) and CA College Guidance Initiative. Separately, the budget provides $10 million one-time Proposition 98 General Fund to launch the California Early College Demonstration Initiative, a regional pilot pairing schools with community college districts to expand dual enrollment and early college access.
- Credit for Prior Learning Expansion: Provides $37 million Proposition 98 General Fund ($35 million one-time, $2 million ongoing) for Credit for Prior Learning (CPL), which allows community college students to earn credit for skills they already have — from work experience, military training, or professional certifications — so they don’t have to retake material they already know. Also, requires the CA Community Colleges Chancellor’s Office to implement CPL as a systemwide initiative at every college district to ensure equitable access, and to report on its outcomes by January 31, 2028, including how many and which students received credit and how it affected their progress toward completion.
- Student Centered Funding Formula (SCFF): Includes ongoing adjustments to the Student Centered Funding Formula (SCFF), California’s system for funding community college districts based on enrollment and student outcomes, including added support tied to students’ financial need. This includes $292 million for a 2.87% cost-of-living adjustment (COLA), $31 million for the same COLA for select categorical programs like Adult Education, $159.7 million (a 1.44% discretionary COLA) to help districts cover the cost of a new paid pregnancy disability leave requirement for staff, $153.1 million for enrollment growth, and $47.7 million to update how funding is calculated.
- TK-12 and Community College Funding Split: Starting in 2026-27, the state changes how it divides Proposition 98 education funding between TK-12 schools and community colleges: TK-12 will get 88.9%, and community colleges will get 11.1% (shifted from the prior split). This gives community colleges an extra $217.7 million and helps fix a funding gap that was unintentionally created in last year’s budget when TK costs were moved outside this split.
- Dreamer Resource Liaisons: Provides $71.1 million one-time Proposition 98 General Fund for Dreamer Resource Liaisons, dedicated staff who help immigrant students navigate college and access support services, with up to 3% of funds available for state administrative operations and technical assistance.
- Calbright College: Provides $38.1 million ongoing for Calbright College, and future funding will depend on data it must report. By October 2028, the Chancellor’s Office must figure out how to count enrollment in competency-based education (CBE) programs, including Calbright’s, the same way as other colleges for funding purposes. By July 2027, it must also set standard rules for Credit for Prior Learning across all colleges, including Calbright. Calbright must also publicly report outcomes using the same measures as other colleges. Calbright College is California’s free, fully online community college intended to support working adults.
- Adult Learner Demonstration Project: Provides $9.7 million one-time Proposition 98 General Fund over three years to support the Adult Learner Demonstration Project. This program provides comprehensive services to help adult workers facing financial hardship move into stable, higher-paying jobs.
- Strong Workforce Program: Provides $15.8 million one-time Proposition 98 funding for the Strong Workforce Program, an important partial restoration after prior funding was shifted to support nursing education. This investment helps sustain community college career education and workforce training aligned with regional labor market needs.
- Cal Grant C – Student Financial Aid: The budget, under trailer bill SB 135, shortens the minimum length of training programs eligible for a Cal Grant C award, from 4 months down to 8 weeks, aligning it with the federal Workforce Pell Grant Program. Award amounts will now be scaled based on how long the program is. Cal Grant C is California’s state grant for students in career and technical training programs, while Workforce Pell is the federal grant that funds short-term job training programs in high-demand fields.
WORKFORCE DEVELOPMENT
- Workforce Pell Grant Implementation: Provides $664,000 one-time General Fund to implement Workforce Pell, a new federal grant that funds short-term job training programs in high-demand fields. Budget language requires the California Student Aid Commission (CSAC) to consult with the CA Workforce Development Board before approving any short-term program as eligible for Workforce Pell funding. Colleges seeking approval must submit a program participation agreement showing the program meets all federal requirements, matches the hiring needs of employers in that field, and leads to a postsecondary credential that is stackable, portable, and counts toward further certificates or degrees. Colleges must also report program and student-level data to the C2C Data System. Programs must have been offered for at least one year before applying, and CSAC must decide on eligibility within 90 days.
- Social Entrepreneurs for Economic Development (SEED): Provides $10.8 million one-time General Fund for the SEED program. This investment supports entrepreneurship and small business opportunities for immigrant and English language learner communities facing barriers to economic mobility.
- Apprenticeship Training Grant Augmentation: The Apprenticeship Training Grant Augmentation provides about $18 million a year from 2026-27 through 2029-30, funded through the Apprenticeship Training Contribution Fund, a special fund (not General Fund dollars) built from employer training contributions. Administered by the Department of Industrial Relations, the grants support approved apprenticeship programs in construction and related trades.
- Physician Access and Workforce Program: Provides $5 million General Fund for the Physician Access Workforce Program, aimed at retaining physicians in high-cost areas that lack sufficient primary care access for underserved communities.
- Promotoras Workforce Training: Allocates $15 million to support workforce training and expansion for promotoras – trusted community health care workers who help connect underserved families to health information, services, and care.
- Proposition 1 Behavioral Health Workforce Initiatives: Provides Behavioral Health Services Fund dollars (Proposition 1) to three agencies: $174.8 million to the Department of Public Health, $131.1 million to the Department of Health Care Access and Information (HCAI), and $20 million to the Commission for Behavioral Health. Of this, $107.6 million (Public Health) and $79.5 million (HCAI) will fund new prevention and workforce programs, including continuing the BH-CONNECT Workforce Initiative, which trains, recruits, and retains behavioral health professionals for Medi-Cal members.
- Jails to Jobs Pilot: Provides $5 million one-time from the Labor and Workforce Development Fund for a Los Angeles County pilot to connect justice-involved individuals, including people at the pretrial stage, to workforce training, employment services, and pathways to quality jobs.
- Hospitality Training Academy: Provides $5 million General Fund one-time funding for the Hospitality Training Academy, a high-road training program administered by the United Food and Commercial Workers Western States Council that offers free training and apprenticeships connecting workers to jobs in hospitality, food service, and tourism.
- Creating Restorative Opportunities and Programs (CROP): Provides $5 million General Fund one-time funding to Creating Restorative Opportunities and Programs (CROP) to continue its Ready for Life program, supporting housing, leadership development, workforce training, and job placement for justice-involved individuals.
- Port Workforce Training: Provides $5 million General Fund one-time for a competitive grant program supporting workforce training at California’s ports, administered by the California Workforce Development Board, with up to 10% available for administrative costs.
SAFETY NET
- Child Care: Provides $269.2 million ongoing General Fund to restore 3,430 child care slots that had been proposed for elimination after losing their previous funding from Proposition 64 and federal sources, and to expand 22,770 additional subsidized child care slots. Also includes a 2.01% cost-of-living adjustment for child care programs administered by the California Department of Social Services (CDSS), about half the increase providers say is needed to keep up with the rising cost of care.
- CalFresh Outreach and CalFood: Provides $108 million for CalFood, which helps food banks purchase, store, and distribute food to families facing food insecurity, and $14 million for the CalFresh Outreach Program, which helps underserved communities learn about and apply for CalFresh. The budget does not expand the California Food Assistance Program (CFAP) to additional immigrant populations, including younger adults and those with humanitarian protection status, though it preserves funding for the previously planned expansion to residents 55 and older regardless of immigration status.
- Health Care for Immigrant Californians: Provides $303.1 million General Fund to continue full-scope Medi-Cal coverage for qualified immigrants, including refugees, asylees, and trafficking victims, through July 1, 2027. Delays the shift of these enrollees to restricted-scope coverage and delays Medi-Cal dental cuts by 12 months. Also includes $39 million to help enrollees transition smoothly as they move from managed care to fee-for-service coverage.
- Distressed Hospital Support: Provides $90 million in grants to hospitals struggling financially, with up to $50 million more available if needed, plus $250 million for public hospitals. Many hospitals, especially in rural areas, are under strain from low Medi-Cal payments and federal funding cuts, putting health care jobs at risk across the state.
For questions, please contact Valerie Johnson, EDGE Policy and Advocacy Manager, at vjohnson@caedge.org.
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