On June 9, the Legislature announced an agreement on a budget plan to address the shortfall using a mix of cuts, borrowing, and other strategies, following the same general framework as the May Revision. Specifically, it includes $3.5 billion in reductions for 2025-26 that will grow to over $12 billion on an ongoing basis; $7.8 billion in revenue and borrowing for 2025-26; and $1.0 billion in other measures such as fund shifts, deferrals, and delays. Below are highlights of how the Legislature’s budget plan for 2025-26 addresses education, workforce development, and social safety net issues. The Governor and legislative leadership are continuing negotiations over what the final budget package will look like, and more details are expected to emerge in the coming weeks. View the full legislative budget agreement here. Stay tuned for more updates!
Education
- TK & Community College Funding. The Legislature’s budget plan rejects the Governor’s proposal to fund transitional kindergarten (TK) outside of the Prop 98 split between TK-12 schools and California Community Colleges for the 2023-24 and 2024-25 school years. However, starting in 2025-26, the new funding structure will begin, returning $260 million to Community Colleges. The May Revision proposed reallocating full funding for TK expansion to the TK-12 side of the Prop 98 budget, which would have reduced community college funding by $492.4 million over three years.
- Career Passport. The Legislature’s budget plan rejects the Governor’s proposal to provide $25 million one-time Proposition 98 for the Career Passport Initiative.
- Student Financial Aid:
- Includes $20 million one-time Prop 98 to community colleges for flexible emergency financial aid to students.
- Includes $15 million one-time Prop 98 for Dream Resource Liaisons.
- Includes $5.1 million one-time Prop 98 to community colleges for Financial Aid Community Support.
Workforce Development
- CTE. The Legislature’s budget plan appropriates $150 million Prop 98 General Fund to increase investments in career technical education programs and prepare the next generation’s workforce.
- CalRISE. The Legislature’s budget plan rejects the Governor’s proposal to spend $17 million in one-time 2025-26 General Fund to extend operation of the California Regional Initiatives for Social Enterprises (CA RISE) program for two more years.
- Youth Job Corps. The Legislature’s budget plan cuts the Youth Job Corps program annual budget by 25%, beginning in 2025-26.
- Statewide Interagency Council.The Legislature’s budget plan restores the $5 million to fund an education and workforce interagency entity to improve planning and coordination in higher education and workforce development. The May Revision proposed to fully cut this proposal.
Safety Net
- Health Care. The Legislature’s budget plan modifies the Governor’s Medi-Cal enrollment freeze so that it only affects immigrants aged 19 and older with unsatisfactory immigration status (UIS) starting on January 1, 2026. It also makes clear that there is no “age out” (meaning the restriction stays in place no matter their age) and allows a 6-month grace period for re-enrollment if someone temporarily loses coverage.
- Food Assistance. The Legislature’s budget plan rejects the Governor’s proposal to make the expansion of the California Food Assistance Program (CFAP) dependent on the administration’s “budget trigger.” Instead, it keeps the current approach where the expansion will only happen if the Legislature decides to fund it.
- Child Care. The Legislature’s budget plan approves the Governor’s proposal to suspend the child care cost-of-living adjustment for one year to save $60.7 million, but it requires that all child care programs get a new cost-of-living adjustment starting in 2026 based on the new single rate structure. It also modifies the Governor’s proposal to reduce funding for the Emergency Child Care Bridge by decreasing the cut to $30 million, and the plan also adds $150 million to create 10,000 new child care slots.