On May 14, Governor Gavin Newsom presented the 2025-26 May Revision, an updated state budget proposal shaped by economic disruptions stemming from federal instability. The proposal adjusts for a projected $11.95 billion shortfall driven by market volatility, decreased tourism revenue, and the impact of tariffs. These combined factors have contributed to an estimated $16 billion reduction in the state’s revenues. The May Revision introduces several fiscal adjustments that could significantly impact Los Angeles (LA), particularly given the city’s budgetary challenges and recent natural disasters. Below is an analysis of the potential effects on LA based on key fiscal changes in the May Revision:
Education
Community College Funding. The May Revision offers increased support for community colleges in some areas, while proposing changes that could destabilize funding and limit colleges’ ability to serve students effectively:
- Student Centered Funding Formula. May Revision includes over $210 million in one-time funding and $104.7 million in ongoing funding for the Student Centered Funding Formula (SCFF), which determines how colleges receive funding based on student needs and success. This ensures colleges are fully supported for both the 2024–25 and 2025–26 school years.
- Enrollment Growth. The proposal includes $109.5 million in ongoing funding to support a 2.35% increase in student enrollment. This helps colleges expand access, offer more classes, and provide support services to accommodate more students.
- COLA. The May Revision also reduces the previously proposed Cost-of-Living Adjustment (COLA) to 2.3%, down from 2.43%. While still higher than last year’s 1.07%, this smaller adjustment means less new funding to help colleges keep up with rising costs. As a result, the SCFF will see a $12.9 million reduction, and categorical programs, which support underserved students, students with disabilities, and English learners, will receive $122,000 less than initially expected.
- TK Shift. The May Revision proposes to shift $492.4 million in Proposition 98 General Fund money away from community colleges and into the TK–12 education system to support the expansion of transitional kindergarten (TK). This reallocation significantly impacts community colleges, reducing the overall share of Prop 98 funds they receive. It threatens to destabilize local funding, making it harder for colleges to plan, hire, and maintain essential student services, especially at a time when enrollment is beginning to rebound and demand for support is high.
Impact on LA: The May Revision provides $109.5 million for 2.35% enrollment growth, helping Los Angeles community colleges expand access and serve more students, especially those pursuing career training in high-demand fields. However, the budget also proposes a reduced 2.3% COLA and a $492.4 million funding shift from community colleges to TK-12, which could destabilize local budgets. This threatens support for low-income, first-generation, and underserved students and undermines efforts to build a strong regional workforce in sectors like healthcare, clean energy, and early education.
Cuts to the Student Support and Professional Development Discretionary Block Grant to $1.7 billion (from $1.8 billion in the Governor’s January Budget) due to Prop 98 reductions. These dollars are supposed to help schools fund professional development for teachers, including expanding career pathways and dual enrollment efforts.
Impact on LA: This reduction will directly affect LA County, where community college districts heavily rely on discretionary funds to drive student success initiatives and educator training, including, but not limited to, slower expansion of CTE pathways and dual enrollment with community colleges.
Cuts to Career Passport and Credit for Prior Learning proposals. Cuts $25 million from the Career Passport and $35 million (one-time) to the Credit for Prior Learning proposals. The Career Passport is a digital tool intended to help individuals showcase their skills and land good-paying jobs, especially those without a four-year degree. Credit for Prior Learning is a critical initiative enabling more Californians to convert their real-world experience into college credits. These proposals are part of the Master Plan for Career Education.
Impact on LA: Large and diverse populations in LA depend on accessible, flexible pathways into the workforce. Colleges in the LACCD and neighboring systems were poised to expand CPL offerings, including standardizing evaluation processes, training faculty, and building tech infrastructure, but these efforts may now stall. Additionally, adult and returning students could face longer and more expensive degree pathways without this funding. Further delays in CPL implementation limit access to streamlined credentialing, impacting workforce entry or advancement.
Cuts $20 million to the Rising Scholars Program, reducing the initial proposal of $30 million to $10 million total ongoing. The Rising Scholars Network is a statewide initiative within the California Community Colleges system that supports students who are currently or formerly incarcerated, or otherwise impacted by the justice system.
Impact on LA: Although a $20 million proposed cut to the Rising Scholars Network is not ideal, Rising Scholars can operate at the current level of $10 million (ongoing) to allow more community colleges to participate in the program. However, increased funding would translate into greater opportunities for student success and enhanced capacity for community colleges to expand and strengthen the delivery of Rising Scholars programs. This proposed cut does not put current community colleges, students, or the ongoing operation of Rising Scholars in jeopardy. Within the Los Angeles Community College District, East Los Angeles College, Los Angeles Valley College, and Los Angeles Pierce College operate Rising Scholars programs to support educational access for justice-involved students.
Cal Grant Program Caseload Adjustments: Projected spending increased to $2.3 billion in 2023-24, $2.5 billion in 2024-25, and $2.8 billion in 2025-26, driven by an increase in the number of eligible students. The budget adds $94.7 million one-time for 2024-25 and $228.7 million ongoing for 2025-26. The Cal Grant program offers financial aid to help underserved students cover college tuition and related expenses at eligible institutions.
Impact on LA: The projected increase in Cal Grant Program spending to $2.8 billion by 2025–26 represents a major investment in college affordability with strong benefits for Los Angeles County, where many students depend on financial aid. LA-area institutions like Los Angeles Community College District (LACCD) and CSU LA will gain critical support to reduce barriers to access and persistence for first-generation, underserved, and underrepresented students. This funding expansion is expected to improve graduation outcomes and strengthen the region’s skilled workforce pipeline, promoting long-term economic mobility.
Workforce Development
DIR Apprenticeship Training Grant Expansion: An additional $18.2 million one-time funding for the Department of Industrial Relations to support construction and trade apprenticeships, on top of the $3 million in the Governor’s January Budget.
Impact on LA: This additional funding could prove as a strategic investment in both workforce and equity for LA County. In a region with both high labor demand and deep equity gaps, this investment has the potential to expand access to well-paying trades careers, improve outcomes for underserved communities, and strengthen partnerships across education, labor, and industry.
Cuts to the CA Education Interagency Council. Cuts the total $5 million ongoing funding to create the CA Education Interagency Council, initially proposed to support the Master Plan for Career Education in the Governor’s January budget proposal. The Council is intended to improve systems alignment, support data-driven policy, and build clear pathways for students, workers, and employers.
Impact on LA: The elimination of the $5 million ongoing funding for the California Education Interagency Council significantly weakens the governance backbone of the Master Plan for Career Education. For LA County, this threatens coordinated policy execution across its sprawling and diverse education/workforce landscape, equity-focused systems change needed for marginalized learners, and effective regional implementation of initiatives designed to prepare students for family-sustaining wages and high-demand careers.
Maintains the $17 million investment for CalRISE. This program offers financial and technical assistance to employment social enterprises to help build the capacity to create and retain jobs in communities.
Impact on LA: LA County has one of the largest reentry populations in California, with thousands of individuals returning to communities each year from state prisons, jails, and juvenile facilities. These individuals face significant barriers to employment. The continued investment in CalRISE will provide ongoing support to populations historically excluded from traditional workforce pipelines, including formerly incarcerated adults, transition-age foster youth with justice involvement, and people experiencing homelessness.
Maintains the $3 million investment to continue supporting the Cradle-to-Career (C2C) Data System, specifically the California College Guidance Initiative (CCGI). CCGI is central to C2C’s college and career planning tools. It will provide these tools to all 6th-12th-grade students in the state and use eTranscript California to transfer community college transcripts to four-year colleges, aiming to bridge gaps between K-12 and higher education, ensuring every California student has the resources for college and career success.
Impact on LA: Enabling a more integrated, data-driven approach to education and workforce development will benefit LA’s complex ecosystem, spanning over 80 school districts, multiple colleges, and workforce boards, and will benefit from better alignment and coordination. C2C can connect education data with labor market outcomes, helping the region tailor training programs and build career pathways in key sectors like healthcare, clean energy, and tech. This is crucial for improving economic mobility and closing persistent wage and opportunity gaps across LA County.
No additional funding for the Apprenticeship Innovation Fund (AIF). AIF was a new investment in 2022 for new and innovative apprenticeship programs, defined as apprenticeships associated with the Interagency Advisory Committee on Apprenticeships (IACA). AIF focuses on sustaining and scaling registered apprenticeship programs in industries beyond traditional apprenticeships in the building trades.
Impact on LA: The lack of additional funding for the Apprenticeship Innovation Fund in the May Revision could significantly limit LA County’s ability to expand and modernize apprenticeship pathways, particularly in high-growth and nontraditional sectors. LA County has been actively working to diversify apprenticeships beyond the building trades into fields like healthcare, early childhood education, and clean energy. However, continued innovation requires sustained investment.
No additional funding for High Road Training Partnerships. HRTP aims to enhance workforce training partnerships that prioritize workers, industry leadership, and emphasize equity, quality, and sustainability.
Impact on LA: The absence of new funding for High Road Training Partnerships (HRTPs) in the May Revision could stall progress on equity-focused, industry-aligned workforce development in LA County, where these partnerships have been key to connecting underserved workers to quality jobs. HRTPs in LA have supported sectors like healthcare, construction, clean energy, and logistics, providing training that’s not only aligned with employer needs but also centered on racial, economic, and environmental justice. Without additional funding, many community-based organizations, unions, and training providers may face constraints in expanding or sustaining programs that support underserved communities, immigrants, and justice-involved populations. This limits LA’s ability to build inclusive pipelines into good-paying, future-ready careers, particularly in communities hit hardest by unemployment and systemic inequities.
No additional funding for the CA Apprenticeship Initiative (CAI). CAI provides grants to community colleges, school districts, and their industry partners to create new and innovative apprenticeship opportunities.
Impact on LA: The lack of additional funding for the California Apprenticeship Initiative (CAI) in the May Revision poses a significant setback for LA County’s efforts to expand apprenticeships into new and emerging industries. CAI has been a crucial source of support for developing nontraditional apprenticeship programs in fields like healthcare, IT, early childhood education, and green technology—sectors vital to LA’s economy and equity goals. Without new funding, community colleges, employers, and workforce boards in LA may face barriers to launching or scaling these earn-and-learn models, limiting access for underserved, immigrant, and BIPOC communities. This stalls progress on building inclusive, future-ready career pathways and weakens the region’s ability to meet local labor market demand through equitable workforce development strategies.
No additional funding for Breaking Barriers to Employment Grants. The Breaking Barriers to Employment program provides individuals from underserved communities with supplemental, supportive, and wraparound services they need to successfully enter, participate in, and complete workforce and education programs to obtain meaningful and family-sustaining jobs.
Impact on LA: The lack of new funding for Breaking Barriers to Employment Grants could significantly impact LA County’s ability to support job seekers facing the greatest challenges, such as foster youth, justice-involved individuals, and people experiencing homelessness. These grants fund critical wraparound services that help high-need residents prepare for and retain employment. Without them, many local programs may shrink or disappear, reducing access to jobs and economic mobility in LA’s most underserved communities.
Safety Net
Enrollment Freeze for Full-Scope Medi-Cal Expansion for Undocumented Immigrants (Adults 19 and Older). The May Revision allocates $86.5 million in 2025-26, rising to $3.3 billion by 2028-29, but freezes new enrollments for the Medi-Cal program, limiting access to vital healthcare for many Californians.
Impact on LA: The freeze on new Medi-Cal enrollments will leave thousands of LA County residents, particularly underserved, immigrant, and communities of color, without access to vital, life-saving healthcare. This will strain the county’s safety-net system, including public hospitals and community clinics, increasing uncompensated care and reducing overall quality for all patients. It also undermines local progress toward universal coverage and worsens existing health and economic disparities. In a region heavily reliant on high-risk workers, limiting access to care weakens both public health and workforce stability.
Child Care. The May Revision maintains the Cost of Care Plus Rate payments for state-subsidized child care providers but cuts $42.7 million from the Emergency Child Care Bridge and $60.7 million from the Cost-of-Living Adjustment, increasing challenges for working families to access affordable child care.
Impact on LA: The May Revision’s child care cuts will make it harder for many LA County families, especially underserved and foster families, to access affordable, reliable care. Reductions to the Emergency Child Care Bridge and COLA funding strain providers already facing rising costs, increasing the risk of program closures or reduced availability. This will disproportionately impact working parents in high-need communities, forcing some to leave jobs or forgo training due to a lack of child care access. While maintaining the Cost of Care Plus Rate helps stabilize funding, the overall cuts undermine equity and early learning goals across the region.
Future Spending Triggers. The May Revision includes $456.1 million in spending commitments set to be triggered in 2027-28, contingent on available resources. One major trigger is the CA Food Assistance Program (CFAP) Expansion, which allocates $117.2 million in 2027-28, growing to $163.2 million in 2028-29. The CFAP provides food benefits to underserved Californians who are ineligible for federal food assistance programs due to their immigration status.
Impact on LA: CFAP has the potential to significantly benefit Los Angeles County, home to many undocumented and mixed-status families who are excluded from federal nutrition programs, but the May Revision proposes a trigger-based expansion. Under this approach, funding would only be made available in 2027–28 if sufficient state revenues exist. This support is vital, as it would deliver much-needed nutrition assistance to tens of thousands of underserved immigrant residents, especially in food-insecure areas such as East and South LA. However, tying the $117.2 million in 2027–28 (growing to $163.2 million) to future state revenues creates uncertainty and delays urgently needed relief. This prolongs food insecurity, increases pressure on local food banks, and postpones the health and economic benefits associated with improved nutrition. For LA County, the delay risks undermining trust in state commitments and deepening hardship for communities already struggling to meet basic needs.