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California EDGE Coalition’s Summary of the Governor’s 2024-25 May Revision

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California EDGE Coalition’s Summary of the Governor’s 2024-25 May Revision

On May 10th, Govern or Gavin Newsom presented the 2024-25 May Revision. The updated state budget outlines a $288 billion spending plan, with a revised projected shortfall of $27.6 billion, down from the January estimate of $37 billion. This comes after the Legislature reduced spending by $17 billion last month in the early action budget agreement. Although the May Revision does not anticipate a recession, it acknowledges potential risks that could substantially alter the state’s fiscal outlook in the near future. The May Revision includes severe cuts and delays across the board including, but not limited to, childcare support, apprenticeship programs, and cuts within the healthcare workforce sector, many of which were promised in recent budget cycles.

Despite continuing fiscal challenges, the revised budget mostly retains investments in education, such as funding for community colleges, various student support services, dual enrollment pathways, and the Cradle-to-Career Data System. However, there are significant cuts to workforce development programs, which will negatively impact these initiatives and further disadvantage underserved Californians who face barriers to accessing skills training and employment opportunities.

The Legislature will draft a budget plan in late May or early June for budget bill passage before June 15. The Governor then has until June 27 to sign or veto the bill. In late June, budget trailer bills will be introduced to adjust the approved budget plan, check out the budget process timeline here. This budget season continues to prove exceptionally challenging, and the State must continue to lead in prioritizing equity for all Californians facing socioeconomic challenges. EDGE is prepared to collaborate with the Administration, Legislature, and partners to ensure that industries, workers, returning students, opportunity youth, and underserved communities are prioritized as we navigate these economic uncertainties.

Provided below is an overview of the 2024-25 May Revision related to education, workforce development, and social safety net issues that are aligned with EDGE’s 2024 Policy Priorities.

Education

  • No funding for Cal Grant Reform. The 2022 Budget Act included provisions for the Cal Grant Reform Act, aiming to revamp California’s largest student financial aid program. The reforms propose Cal Grant 2 for community college students and Cal Grant 4 for four-year university students. The 2022 Budget Act also included a trigger anticipating certain program expenditures to be incorporated into the 2024 Budget Act, contingent on General Fund resources outlined in the 2024 May Revision being able to support ongoing increases over the multiyear forecast. Due to anticipated multiyear deficits, no funding was allocated for Cal Grant Reform.
  • Maintains core funding for Community Colleges. The proposal includes a $28 million ongoing increase to fund 0.5% enrollment growth and $100.2 million ongoing to support a 1.07% cost of living adjustment (COLA) for apportionments, matching the K-12 system’s COLA. Additionally, $13.1 million ongoing is allocated for a 1.07% COLA for selected categorical programs and the Adult Education program.
  • Maintains key funding for Cradle-to-Career Data System. The May Revision maintains key funding for the Cradle-to-Career Data System’s (C2C) operations. However, the revised budget cuts $3 million to the January proposed $5 million ongoing to support the C2C’s CA College Guidance Initiative (CCGI), due to carryover funding available. 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.
  • Investments in Credit for Prior Learning. The May Revision includes $6 million one-time funding for a Mapping Articulated Pathways for Credit for Prior Learning (CPL) Demonstration Project. This initiative aims to embed CPL policies to enhance access for working adults to high-demand, high-wage careers. Several colleges will receive grants to establish campuswide CPL practices or develop a comprehensive framework, promoting equitable access and successful outcomes. The project will use technology to automate and share CPL articulations across colleges. Grants will also support faculty professional development and technical assistance to improve cultural and academic practices.
  • Investments in a demonstration project for workers. The revised budget proposal allocates $5 million one-time funding for a Pathways for Learners of Low-Income Demonstration Project. This initiative, in partnership with United Domestic Workers (UDW), aims to develop educational pathways for working learners by identifying educational goals and relevant certificates at California community colleges. It will provide flexible modalities and support services such as childcare, transportation, laptops, and instructional materials. The project will support homecare and childcare workers, offering three cohorts of at least sixty students in vocational ESL and healthcare courses, with additional certifications identified by Summer 2024. Union representatives will help identify barriers and establish a support pipeline between the Chancellor’s Office and UDW.
  • Investments to expand nursing programs. Maintains the Governor’s proposed investment 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.
  • Cuts to the Learning Aligned Employment Program. The May Revision cuts funding for this program by $485 million General Fund one-time, reflecting the balance of unspent funds. The Learning-Aligned Employment Program offers eligible students at public colleges and universities the opportunity to earn money to help defray their educational costs while gaining education-aligned, career-related employment.

Workforce Development

  • Cuts to High Road Training Partnerships. The revised budget proposal maintains a $45 million General Fund cut for the High Road Training Partnerships (HRTP) in Health and Human Services. HRTP promotes worker-focused, industry-led workforce training that prioritizes equity, job quality, and sustainability. The 2022 Budget Act provided $135 million over three years, with $90 million already used. This reduction eliminates the remaining funds for the program.
  • Eliminates the Women in Construction Unit. The May Revision eliminates the Women in Construction Unit at the Department of Industrial Relations by $15 million on an ongoing basis. The Women in Construction Unit is intended to support women and nonbinary individuals in the skilled trades sector.
  • Cuts to California Jobs First (formerly known as the Community Economic Resilience Fund). The California Jobs First program is a collaborative effort between agencies to foster job creation with a focus on climate adaptation, managed regionally. The 2021 Budget Act allocated $600 million for workforce investments across 13 regions in California. An early action agreement in April 2024 postponed $275 million from 2021-22, reallocating $91.7 million annually from 2024-25 to 2026-27. The May Revision further cuts the program’s funding by $150 million over three years, cutting $50 million each year from 2024-25 to 2026-27.
  • Cuts to the Apprenticeship Innovation Fund. In the April 2024 early action agreement, the Governor’s January proposal included postponing $40 million from the General Fund in the 2024-25 fiscal year and allocating it across the 2025-26 and 2026-27 fiscal years. However, the May Revision proposes a $40 million cut from the General Fund. 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.
  • Cuts to the CA Youth Apprenticeship Program. The Governor’s January budget proposed to delay $25 million for the program to 2025-26. However, the May Revision proposes converting this delay into a $25 million cut from the General Fund. The 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 this population.
  • Cuts to the CA Youth Leadership Corps. The 2022 Budget Act allocated $20 million from the General Fund for 2022-23 and $20 million from the General Fund for each of the subsequent two fiscal years, serving as advance payment for the Emerald Cities Collaborative for CYLC. This support aimed to facilitate community change through earn-and-learn career pathway programs at 20 chosen community colleges over a four-year span. However, the May Revision proposes a $20 million cut, eliminating the program.
  • Cuts to the healthcare workforce sector. The May Revision proposes to cut General Fund expenditures for health workforce initiatives outlined in the 2022 Budget Act. This reduction amounts to $300.9 million in 2023-24, $302.7 million in 2024-25, $216 million in 2025-26, $19 million in 2026-27, and $16 million in 2027-28. These initiatives cover various programs, including those for community health workers, nursing, social work, residency programs facilitated by the Song-Brown Healthcare Workforce Program, the Health Professions Career Opportunity Program, and the California Medicine Scholars Program. Additionally, the May Revision eliminates expenditure authority of $189.4 million from the Mental Health Services Fund for the fiscal year 2024-25. This cut affects behavioral health workforce programs that were previously proposed for postponement in the Governor’s January budget.
  • Cuts to the Small Business Technical Assistance Expansion Program (TAEP). The May Revision proposes to cut $26 million to the Small Business TAEP – a program that prioritizes support for underserved small businesses, including those owned by women, people of color, veterans, and those situated in low-income, rural, or disaster-affected areas.
  • No new funding for Breaking Barriers to Employment. 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. Although the program has received one-time funding in the past, reliable ongoing funding is needed to sustain the program. Due to the deficit, no funding was allocated for the program in the May Revision.

Social Safety Net

  • Maintains commitment to Health4All. The May Revision maintains funding to expand Medi-Cal eligibility to undocumented immigrants ages 26-49. The 2022 Budget Act approved Medi-Cal coverage regardless of immigration status, with $835.6 million ($626.1 million General Fund) in 2023-24 and $2.6 billion ($2.1 billion General Fund) at full implementation and annually thereafter until it reached full implementation January 2024.
  • Delays access to food resources for undocumented immigrants. The May Revision implements a two-year delay to the CA Food Assistance Program expansion – automation to begin in 2026-27 with benefits beginning in 2027-28. CFAP would provide food assistance to undocumented immigrants 55+. In addition to the delay, the budget continues to exclude undocumented immigrants 54 and under to access the program.
  • No funding for undocumented immigrants to receive unemployment insurance benefits. Over the last several 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. Due to budget constraints, no funding was provided for this effort.
  • Eliminates commitment to child care expansion. The May Revision proposes to eliminate the expansion of over 200,000 new subsidized child care slots that were approved under the 2021 Budget Act. Instead, the total slot expansion would be limited to approximately 119,000 awarded slots. This proposal includes revoking recently issued final award letters for 12,000 General Child Care slots budgeted for 2024-25.
  • Cuts to the CalWORKs Mental Health and Substance Use Disorder Services. The May Revision permanently eliminates $127 million in total funding for mental health and substance use disorder treatment for families participating in the CalWORKs program. This program is an outpatient program that provides both a comprehensive and integrated array of mental health services, case management services, medication support services, and crisis intervention services to adults who experience mental health barriers to employment.
  • Delays student housing efforts. The 2023 Budget Act shifted Affordable Student Housing grants’ funding from the General Fund to local lease revenue bonds. This applied retroactively to existing and future community college projects. UC/CSU housing projects’ debt service was backed by ongoing funds. Community college housing projects were to be funded by local revenue bonds or a state pool. The May Revision maintains the statewide lease revenue bond program proposed in the Governor’s Budget. Two community college projects not fitting state bond criteria will use redirected funds. No new housing projects are expected in 2024-25.

For questions, please contact Anna Alvarado, EDGE Policy Director, at aalvarado@caedge.org.

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