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Governor’s 2022-23 State Budget Proposal

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On January 10th, Governor Newsom released the 2022-23 state budget proposal which includes  $286 billion dollars in investments aimed to support working families, students, adult learners, opportunity youth, and the business community. The budget also projects a surplus of $45 billion – $20 billion of the total is considered discretionary funding, $16 billion for K-12 and community colleges, and $9 billion proposed for the state’s reserves. In addition to the state’s surplus, California is also expected to receive $14 billion of additional funding from the federal government over the next 5-years through the Infrastructure Investment and Jobs Act.

The California EDGE Coalition applauds the Administration for the inclusion of education and workforce training investments geared towards addressing climate justice and the healthcare sector – all while centering equity and economic mobility for all Californians. The budget proposal builds upon last year’s historic investments that addressed food and housing insecurity, increased earn-and-learn opportunities, strengthened education and career pathways for students and adult learners, and continued financial relief for small businesses.

As we enter into the second year of the legislative cycle, EDGE urges the Administration and the Legislature to invest in businesses and our most underserved communities who are in need of relief – many of whom lost their jobs due to the pandemic and are struggling to pay rent, put food on the table, pay for child care, and cover healthcare costs. Students were forced to drop out of education and training programs in order to pay their bills and help their families survive.

Although this budget proposal is optimistic due to increased and stable state tax revenues, the Gann Limit, a constitutional spending cap requirement, could impact state spending in this budget cycle. According to the California Budget & Policy Center, the Gann Limit cap is tied to a spending level and is adjusted each year for changes in population and personal income – if the state exceeds the Gann Limit over a two-year period, the Legislature is required to provide half to taxpayers and the other half to K-12 schools and community colleges[1]. The Governor is expected to address this issue during the May Revision process.

Provided below is an analysis of the proposed 2022-23 budget, which includes items that are aligned with EDGE’s policy priorities.

Supporting Community Colleges and Students

Prior to the pandemic, students, opportunity youth, and adult learners, particularly from communities of color and residing in underserved regions of the state, were already facing barriers in accessing and completing their education and training programs.  The pandemic continues to unveil inequities and imposes significant barriers for students with persistent equity gaps within postsecondary education and training. In response to these disparities, the budget proposes investments to community colleges and increased support services for students to help alleviate some of the economic burdens, with a combination of ongoing and one-time investments.

  • Community College Investments
    • An increase of 5.33% Cost of Living Adjustment (COLA) – an ongoing investment of $409 million dollars to support community colleges. In addition, the same COLA increase is proposed for several categorical programs, including adult education and apprenticeship programs.
    • The budget announces a roadmap for community colleges, proposing a goal to increase the percentage of students who acquire associate degrees, credentials, certificates, and specific skill sets that prepare them for in-demand jobs by 20% by 2026. The roadmap also sets various expectations, including supporting workforce preparedness and high-demand career pipelines; fully participating in the implementation of the Cradle-to-Career Data System; closing equity gaps between the types of students able to access dual enrollment programs.
    • The CC Roadmap further proposes to establish a baseline for credit for prior learning opportunities and increase these offerings annually, in addition to launching 10 new direct-assessment competency-based education programs.
    • The Governor also seeks to establish a goal of achieving 70% post-secondary degree and certificate attainment among working-aged Californians by 2030 – in partnership with CC, CSU, and UC systems.
    • $150 million one-time Prop 98 General Fund (GF) for student enrollment and retention strategies, with theexpectation that community colleges will offer at least 50% of their courses in person for the 2022-23 academic year while adhering to public health guidelines.
    • In terms of program funding, the majority of the CC programs got an increase with the exception of the Strong Workforce Program, Dreamer Resource Liaisons, the Puente Project, and immigrant legal services.
  • Student Support Services
    • Keeping the commitment from last year’s budget, $750 million one-time general fund investment to support affordable student housing projects across CCC, CSU, and UC, implementing the second year of the state’s 3-year $2 billion initiative adopted in the 2021 state budget.  Additionally, $1.5 billion is proposed over 2-years to accelerate the development of affordable student housing at community colleges.
    • An increase of 5.33% Cost of Living Adjustment (COLA) for additional categorical programs:  Extended Opportunity Programs and Services (EOPS), Disabled Students Programs and Services (DSPS), and CalWORKS Student Services.
    • $10 million ongoing Prop 98 GF to expand the NextUp foster youth program from 20 to 30 community college districts.
    • $300 million one-time for the Learning-Aligned Employment Program, a student work-study program intended to incentivize employers—CC, CSU, and UC—to hire students into campus-based jobs that connect to their education programs.
    • $30 million to support student basic needs centers. Last year, the budget approved a one-time $100 million dollar investment to address students’ basic needs such as food and housing insecurities.
  • College Affordability
    • An increase of $100 million ongoing Prop 98 to support Community College Student Success Completion Grant Program, providing funds for newly eligible students receiving a Cal Grant B or C award as a result of the 2021 expanded Cal Grant eligibility for community college students. Although last year’s budget addressed some barriers to accessing Cal Grants like removing the time-out-of high school and age eligibility requirements, this budget proposal falls short in addressing another major barrier – GPA verification requirement. The GPA requirement is a racial equity issue and should be addressed in the May Revision to ensure California’s most underserved students, particularly Black and Brown adult learners and opportunity youth, who should not be defined by a GPA number to demonstrate skills, competencies, or ability to be successful in education and training programs.
    • $20 million one-time Prop 98 GF to support emergency student financial assistance grants to eligible DACA students.
  • K-12 System Investments in Workforce and Education Pathways
    • $1.5 billion one-time Prop 98 GF over 4-years to support career pathways focused on technology, health care, education, and climate-related fields. These programs will require local partnerships that bring together K-12, higher education institutions, employers, and other community partners.
    • $500 million one-time Prop 98 GF over 4 years to expand dual enrollment opportunities tied with student support services. Although we appreciate this investment, the state should also prioritize adult learners and opportunity youth as part of the dual enrollment conversations. Adult learners and opportunity youth face unique barriers to access post-secondary education and training, and dual enrollment opportunities are key strategies that will help open doors to economic mobility for these communities.

Supporting a Social Safety Net for Working Families

California’s working families, particularly those living in underserved areas of the state, Black and Brown communities, and immigrant communities have been hit the hardest during the ongoing pandemic crisis. The proposed budget makes investments in several programs that are intended to secure a social safety net, a priority for EDGE. However, more ongoing and stable resources will be needed to uplift communities out of poverty. Some of the proposed budget investments include:

  • Expands the CA Food Assistance Program (CFAP) to Californians 55 and older, regardless of immigration status – $35 million GF (increasing the total pot to $113 million annually in 2025-26).
  • Universal healthcare coverage, regardless of immigration status with full implementation by 2024. Investments include $819 million in 2023-24, with $2.7 billion annually after that until it reaches full implementation. Last year’s budget authorized expansion coverage for Californians 50 and older starting in May 2022. This proposal expands coverage to the remaining uncovered population ages 26 to 49.
  • Increased access to the CA Earned Income Tax Credit, proposing to allow families with zero-reported income to be eligible for the $1,000 state child tax credit as long as the family would otherwise be eligible.
  • 7.1% grant increase to CalWORKs grants starting October 2022. The funding increase comes from a Child Poverty Subaccount, dollars dedicated to CalWORKs grant increases. As a result of the 7.1% increase, maximum CalWORKs grants will equal 54% of the federal poverty level.
  • Rental housing eviction protections will continue until March 2022 for eligible Californians; however, more support is needed from the federal government to address housing insecurities that countless families continue to experience in the midst of the ongoing pandemic.
  • Expansion of child care access – adding 36,000 child care slots on top of the 110,000 slots that were included in last year’s budget. The budget proposal provides an increase of $823.7 million to annualize the 2021-22 Budget Act, with the continued goal to serve 200,000 new children by 2025-26. However, more stable ongoing funding should be considered to help support and expand the child care workforce to support these additional slots.
  • $3.4 billion funding for summer school, before and after school programs at elementary schools to support kids and working families. The budget requires a focus on schools with the highest concentration of low-income students, English language learners, and youth in foster care.
  • $50 million on-time GF to support food banks to continue addressing food insecurity across the state.

Investments in Workforce Training to Address Climate Justice and the Care Economy

EDGE appreciates the proposed investments in workforce training, with a focus on climate justice and the care economy, which will increase access to culturally informed healthcare providers and affordable child care, as well as address high pollution rates in low-income regions of the state. A proposed $2 billion investment over 3-years will focus on three key sectors: climate justice, the care economy, and education. The workforce training budget package includes:

  • $15 million one-time GF to develop a well-capping workforce training pilot program to provide training for short-term employment for impacted oil and gas workers. Additionally, $50 million one-time GF to provide financial assistance for oil and gas workers facing unanticipated job displacement.
  • $30 million GF over 2-years in grants for community colleges to train, develop, and certify forestry professionals and expand the workforce to support forest health and fuel reduction projects.
  • $185 million one-time GF to support climate initiatives, including $50 million to support regional climate-focused incubators and competitive grants to incentivize and expand climate innovation and entrepreneurship; $35 million GF for the UC to create regional workforce development and training hubs focused on climate change.
  • $110 million GF over 3-years for a Goods Movement Training Center in Southern California to support workforce resilience & accelerate deployment of zero-emission equipment and tech.
  • 25 by 25 initiative – $350 million GF to recruit, train, and certify 25,000 new community health workers by 2025.
  • $130 million one-time Prop 98 through the CA Adult Education Program to support healthcare-focused vocational pathways for English language learners to increase language and cultural diversity in the field. Funding will be phased out in 3-years with $30 million in 2022-23, $50 million in 2023-24, and $50 million in 2024-25.
  • $2 million one-time GF to support expansion of the Export Training Network – overseen by the International Affairs and Trade Unit within GO-Biz, which develops programs and curriculum aimed at underserved business owners, including immigrant entrepreneurs and small business operators.
  • High Road Training Partnerships for Health and Human Services – $350 million one-time GF for training and career advancement programs for people with barriers to employment and to improve workforce development programs for health and human service careers. Phase-out funding will include $110 million in 2022-23; $120 million in 2023-24, and 2024-25. Funding will support collaborations and training programs among community-based organizations, local workforce boards, labor unions, educational institutions, and employers to build partnerships and pathways into family-sustaining healthcare jobs.
  • $270 million GF to expand a comprehensive nursing initiative aimed to increase the number of registered nurses, certified nursing assistants, nurse midwives, medical assistants, and other health professions.
  • $210 million GF to support social work training programs and provide financial assistance to create a new pipeline for diverse social workers who cannot otherwise afford the financial or time investment required to complete full-time programs.
  • $120 million GF to create training positions for psychiatric residents, psychiatric mental health nurse practitioners, psychology interns/fellows, and psychiatric nurses. The goal is to increase on-site training programs and build the psychiatric workforce.
  • $90 million GF to the Employment Training Panel to support job entry and career advancement for entry-level and other workers in health and human service settings, with $40 million intended for social worker incumbent training.
  • $20 million for the Employment Training Panel to expand workplace literacy training in contextualized English, digital skills, and technical skills training for incumbent workers.
  • $30 million to the Employment Development Department Workforce Services Branch to expand the English Language Learner pilots in the Integrated Education and Training programs to 15 sites. These programs will combine English language instruction with vocational skills training for in-demand occupations.
  • $20 million one-time Prop 98 GF for a High-Skilled Careers Grant program that incentivizes public-private partnerships that prepare students in grades 9 to 14 for the high-skill fields of education and early education; science, technology, engineering, and mathematics (STEM); and healthcare.
  • An increase of $8.8 million one-time GF to support 2 additional years of free online job training and educational upskilling programs available through local public libraries.
  • $60 million GF over 3-years for the CA Workforce Development Board’s Low Carbon Economy Workforce grant program as part of California Climate Investments, a statewide initiative that puts billions of cap-and-trade dollars to work with the goal of reducing greenhouse gas emissions, strengthening the economy, and improving public health and the environment—particularly in underserved communities.
  • $10 million to expand earn-and-learn pathways for community college students through the California Youth Leadership Corps (CYLC), a new statewide partnership between the Labor Agency, the Community Learning Partnership, select community colleges, local nonprofits, and community partners. Launched in 2021, CYLC seeks to prepare youth paid low incomes – including youth of color, opportunity youth, and immigrant youth – for community change careers in public/community health, clean energy planning/development, leadership, and social change. CYLC’s works to offer courses that lead to a postsecondary credential, provide; student support and mentoring; as well as paid internships. While CYLC focuses largely on community college students ages 18-24, students who are over the age of 24 may also participate including DACA recipients.
  • $20 million GF from 2022-23 through 2024-25 to provide targeted training for Emergency Medical Technicians.

Supporting California’s Businesses and the Economy

From the start of the pandemic, not only have working Californians suffered but also businesses across the state. Employers have been forced to lay off employees and shut down operations indefinitely. EDGE appreciates the Governor’s ongoing commitment to support the business community with critical financial resources to help them sustain their workforce and remain open.

  • $40 million one-time GF to waive filing fees for all new businesses registering with the State of California.
  • $150 million one-time GF COVID Relief Grant Program for Small Businesses – providing support for small businesses who were previously waitlisted in prior rounds of the state’s grant program.
  • $11.6 million GF in 2022-23, and $500,000 annually thereafter, for GO-Biz to support statewide coordination for immigrant integration through enhanced services for immigrant communities at the state and local level, and support for economic development activities, including at the California-Mexico border.
  • $6 million one-time GF for 2022-23 to bolster the existing Small Business Technical Assistance Programs (TAEP) and a proposed $23 million ongoing GF to permanently support the program. In addition, $3 million ongoing GF starting in 2023-24 to support the continuation of the Capital Infusion Program, which supports one-on-one business consulting provided by the Small Business Development Center Network to assist small businesses in accessing capital.
  • California is set to receive $1.2 billion from the federal State Small Business Credit Initiative (SSBCI). IBank and the State Treasurer’s Office will split the allocation evenly, providing each department with approximately $591 million intended to allocate funding towards existing programs, the CA Capital Access Program for Small Business, CA Capital Access Program Collateral Support at California Pollution Control Finance Authority, and the Small Business Loan Guarantee Program, including a $200 million investment to establish a Venture Capital program at IBank. The Venture Capital program will be focused on underrepresented venture capital managers, underserved entrepreneurs and business owners, socioeconomically disadvantaged regions, and climate equity/justice.

EDGE appreciates the Governor’s budget prioritizing California’s workforce and supporting the socioeconomic needs of working families.  Many of the proposed budget items included in this version align with EDGE’s policy priorities, some of which include supporting funding for education and workforce training programs; expanding earn-and-learn opportunities; providing support services for students, adult learners, and opportunity youth to enable them to access and complete education and training programs. Additionally, EDGE urges the stabilization of resources for the community college system to better support proposed initiatives such as the Career Pathways and Dual Enrollment. Also, it is important to note that significant investments were made in the  2021-22 state budget and it is imperative that the state oversee how those dollars are being spent and identify where further investments are needed to ensure programs are successful, especially in the workforce development space such as the one-time investments for the Community Economic Resilience Fund (CERF) and the Golden State Education and Training Program – which will advance climate justice, provide education and skills training opportunities to dislocated workers, and bolster California’s workforce. The collection and reporting of quality data and outcomes will also be critical in order to determine if existing and new education and workforce training programs are effectively addressing equity gaps within the postsecondary education and training programs.

As more budget details emerge via trailer bill language proposals, the California EDGE Coalition looks forward to working with the Administration, Legislature, and partners to ensure businesses, workers, adult students, opportunity youth, and underserved communities are provided the support they need as we continue to navigate these challenging times.

[1] The California Budget and Policy Center, “First Look: Understanding the Governor’s Proposed 2022-23 State Budget”, (2022), https://calbudgetcenter.org/resources/first-look-understanding-the-governors-proposed-2022-23-state-budget/ 

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