On May 14, 2021, Governor Gavin Newsom released the May Revision, building upon the January budget proposal and making major investments totaling $100 billion in the areas of education, workforce training, economic recovery, broadband access, and support services for underserved Californians. With a record surplus of $75 billion, and with significant aid from the federal government, the May Revision proposes to expand on current programs while also funding new one-time and ongoing programs seeking to uplift low-income students and adult learners, small businesses, and working families. Below is a summary of the May Revision that highlights key investments, many of which are aligned with EDGE’s policy priorities.
Investments for Community Colleges, Students, & Adult Learners
As California charts a path to economic resiliency, community colleges continue to play a critical role in supporting adult learners and workers disproportionately impacted by the pandemic, particularly workers of color. The May Revision proposes a $3.6 billion investment towards community colleges that will pay off the deferrals in full, provide funding for student basic needs centers, low-cost textbook alternatives, and invest in collaborative workforce development efforts. Additionally, community colleges are set to receive an estimated $2.3 billion of new federal funding, of which half of the funds must be spent on direct student aid and the remainder on institutional expenses associated with the pandemic, such as lost revenue and technology needs. Other funding proposals in the May Revision for the community college system include:
● Cost of Living Adjustment (COLA): An increase to the community college’s COLA from the 1.5% proposed in January to 4.05%, reflecting a compounded adjustment of 2.3% for 2020-21 and 1.7% for 2021-22, bringing in a total of $296 million.
● Adult Education Program: May Revision keeps in place the $1 million technical assistance funding, including a minor increase of the COLA from 1.5% to 1.7%.
● Dreamer Resource Liaisons: An increase of $5.8 million ongoing Prop 98 to support immigrant students attending community colleges.
● Work-based learning: An increase of $10 million one-time Prop 98 for community colleges to develop work-based learning opportunities in cloud computing and zero emissions efforts. This is an increase to the $20 million January proposal.
● Guided Pathways – $150 million one-time Prop 98 to support colleges’ efforts to implement Guided Pathways programs, which supports students seeking credentials. This funding would provide continued support for the development of these programs over a 5-year period.
● COVID-19 Block Grants: $50 million one-time Prop 98 to help community colleges respond to the pandemic, and obtain access to grants that will assist them with the transition back to in-person learning.
● Retention and Enrollment Strategies: An increase of $100 million one-time Prop 98 to help bolster student retention rates and enrollment. This is on top of the $20 million one-time that was provided in the early action agreement in Spring.
● English as a Second Language (ESL): $50 million ongoing Prop 98 to expand vocational training and ESL programs for students. These programs are expected to be linked to pathways enabling ESL students to subsequently enroll in for-credit certificates, credentials, or degree programs.
● Competency-Based Education (CBE) Pilot Program: $10 million one-time Prop 98 to create a workgroup for a CBE pilot program in California. This has been an ongoing priority for EDGE, to ensure California offers more flexible postsecondary learning approaches, enabling Californians to participate in postsecondary education and achieve marketable skills and credentials.
Funding for Workforce Development & Economic Recovery Strategies
The May Revision also provides significant funding for workforce-focused initiatives and economic recovery strategies that ties in collaboration between California’s post-secondary institutions, employers, and other industry needs. The workforce package comes in a total of $5.2 billion proposed investment, which includes:
● Community College Strong Workforce Program: An increase of approximately $12.4 million ongoing Prop 98 General Fund to increase program funding by 5%. The state currently provides $248 million for this program.
● Community Economic Resilience Fund: $750 million in one-time federal funds to create the Community Economic Resilience Fund, which will support regional and local planning and implementation of strategies to bolster workforce and economic recovery. The fund will focus on supporting high road industries, quality job creation, and workforce strategies in those sectors or regions most affected by the state’s transition to carbon neutrality. The Fund will include dedicated funding for High Road Transition Collaboratives across California’s diverse regions, which include but are not limited to jobs in energy efficiency; advanced manufacturing and agriculture; and a wide range of other industries critical to the state’s long-term economic growth. This investment builds upon the momentum outlined in AB 106, Regions Rise Initiative, which also seeks to support innovative strategies that address regional workforce needs involving labor, community-based organizations, and private and civic organizations to achieve economic prosperity – an EDGE supported measure.
● Displaced Worker Grant: $1 billion one-time investment of federal funds to the CA Student Aid Commission (CSAC) to support displaced workers seeking to reskill and up-skill, obtain educational opportunities, or to support start-up businesses. This funding would be available over three years, and CSAC would disseminate the funds to the higher education segments to provide grants to individuals on behalf of CSAC. The grants would be aimed at workers displaced from their employment due to the pandemic, and could be spent on high-quality training or starting a business. The funding also requires at least half of the amount appropriated for this purpose to be used to provide grants to eligible individuals who are caring for a dependent child.
● Fresno K-16 Collaborative Grants: $250 million one-time non-Prop 98 for grants to award 5 to 8 regional collaboratives for workforce development strategies, modeled after the existing Fresno K-16 Collaborative. The grants would require the involvement of at least one institution from all three segments, with a focus on aligning higher education with workforce needs and streamlining pathways to high-paying, in demand jobs.
● Community Colleges High Road Training Partnerships: $20 million one-time Prop 98 to support community college’s participation in High Road Training Partnerships. With this funding, community colleges will work with the CA Workforce Development Board (CWDB) to build on current High Road Training Partnerships and High Road Construction Careers projects, and align them with community college pathways to train and bridge students into good quality jobs in industries like construction; healthcare; information technology; trade and logistics; forestry and agriculture; manufacturing; education; leisure and hospitality; janitorial and building maintenance; and clean energy and utilities. These training partnerships are geared towards workers from underserved communities hit hardest by the pandemic.
● Healthcare Workforce Training Program: $50 million one-time General Fund to support the Healthcare Workforce Training Program. This funding will support grants to new residency programs.
● Expansion of the Employment Training Panel (ETP): An increase of $50 million one-time General Fund for the ETP to support training opportunities for new and incumbent workers and address skills gaps in underserved regions of the state. This new one-time funding will allow the ETP program to provide training resources to industries it traditionally has not addressed, like health care and advanced manufacturing, as well as training targeted toward public sector jobs.
● Expansion of High Road Training Partnerships (HRTP): An increase of $90 million for the CWDB to provide additional HRTP opportunities. This builds upon the $25 million proposed in the January budget, bringing in a total of $115 million for HRTP. These training partnerships up-skill the current workforce while creating pathways for new hires and prioritize workers from underserved communities, including justice-involved and disconnected and at-risk older youth. This is also an EDGE supported budget item.
● Construction Apprenticeships: $20 million one-time General Fund to develop apprenticeships in construction, in partnership between state and local workforce boards, the University of California and Community Colleges, philanthropic organizations, and the housing industry.
● ETP and Community College Contract Education Centers: $42 million General Fund to the ETP to leverage existing community college contract education units to provide small businesses with new and incumbent employee training.
● Workforce Regional Partnerships: $50 million one-time General Fund to the CWDB to fund regional equity and recovery partnerships between community college consortia and workforce boards, intended to provide competitive grants to assess demand for good quality jobs and then design short-term targeted education, training, and job placement. An additional $10 million Prop 98 General Fund is provided for the community colleges to participate in these efforts.
● HRTP and Community College Pathways: $50 million one-time General Fund for the CWDB to create industry-based and worker focused programs in healthcare, cybersecurity, and other growing sectors. These will establish HRTPs on an accelerated timeline to align with community college pathways to bridge California students into good jobs. These programs are intended to be flexible in order to provide workers the skills they need to compete in today’s labor market. The May Revision proposes $10 million Prop 98 for community colleges to align their programs with these efforts.
● Learning-Aligned Employment Program: $1 billion one-time General Fund over 2-years to establish an endowment housed at the University of California, which would promote long-term career development for UC, CSU, and CCC students. This program would be established as an endowment to sustain ongoing support. The segments would be expected to collaborate with employers and use the funding to support underrepresented students in finding employment and work-based learning opportunities in their field of study.
● Financial Relief for Small Businesses: An additional $1.5 billion in COVID-19 relief grants for small businesses and nonprofits, boosting California’s relief grant to a total of $4 billion.
● CA Infrastructure and Economic Development Bank (IBank): The May Revision maintains a $50 million one-time General Fund to use across the IBank programs, with a focus on programs that benefit underserved businesses in California. This includes the Small Business Finance Center and the California Rebuilding Fund, which EDGE supported last year and continues to support.
● CA Dream Fund: The May Revision maintains the $35 million one-time General Fund proposal to support micro-grants up to $10,000 to seed entrepreneurship and small business creation for underserved populations that are facing opportunity gaps. The funding is shifted from 2020-21 to 2021-22. EDGE supported this item last year and continues to support.
● CalCompetes Grant Program: $250 million one-time federal funds to create the CalCompetes grant program for businesses that promise to meet one of the following four criteria: establish at least 500 net new jobs; make a significant infrastructure investment; commit to a high-need, high-opportunity area of the state; or receive a designation from the Director of the Governor’s Office of Business and Economic Development that the application is a strategic priority of the state.
● Youth Workforce Development: $200 million in federal relief funding to create a new Youth Workforce Development program, which will be administered by California Volunteers and provide competitive grants to both large cities on a per capita basis, and other cities and counties. This funding is intended to help youth gain valuable work experience by increasing employment opportunities, such as part-time work or summer jobs.
● Employment Development Department (EDD): $21 million over 2-years to improve education and outreach in communities requiring multilingual access to EDD services.
Funding to Support a Social Safety Net
As the pandemic conversation shifts to recovery, much of the work centers on not just going back to the way things were, but rather seizing this moment to create a better, more just California — addressing the disparities existing prior to the pandemic, and ensuring another crisis will never impact the most underserved the way it did this past year. Securing a social safety net has become important now more than ever, ensuring low-income/no-income Californians have the support services they need, such as health care, food assistance, child care, and other forms of cash assistance. The May Revision seeks to provide funding to aid low-income students and working families during this ongoing economic crisis:
● Community College Student Basic Needs Centers: An increase of $30 million ongoing Prop 98 for community colleges to establish basic needs centers to support low-income students and adult learners seeking food assistance, stable housing, health care and so forth. This is an addition to the January budget proposed $100 million one-time for student basic needs, and $30 million ongoing for technology and mental health, which EDGE is in support of.
● Zero Textbook Costs: $100 million one-time Prop 98, combined with the $15 million one-time Prop 98 proposed in the January budget, bringing in a total of $115 million one-time to develop and implement zero-textbook-cost degrees and open educational resources. The grant program allows the community college system to create associate degree and certificate programs that could be completed entirely without purchasing a single textbook. For example, open educational resources tend to be online and are free to students.
● Student Housing: $4 billion in one-time non-Prop 98 funding over 2-years for student housing grants to be administered through the State Treasurer and the California School Finance Authority. 60% of the funds will be provided to community colleges for either new construction or renovation of existing properties, intended to serve underrepresented students. However, the funding proposal includes requirements that student tenants in the new or renovated housing must take an average of 15 degree-applicable units per semester intended to ensure timely degree completion and reduce the overall cost of college.
● EDD Direct Deposit: $11 million one-time funding over 2-years for the EDD to develop and implement a direct deposit option for Unemployment Insurance, Disability Insurance, and Paid Family Leave claimants. This option is intended to disburse benefits faster and streamline the process claimants in order to avoid unnecessary additional processes needed to transfer funds between a debit card and bank account.
● Competitive CalGrant Awards: The May Revision leaves in place the January budget proposal of $35 million ongoing to fund an additional 9,000 new competitive awards annually (bringing the total number of new awards to 50,000 annually), providing critical support to community college students and adult learners. Although the May Revision leaves this investment in place, student financial aid levels remain the same. EDGE urges the Legislature and Administration to ensure the CalGrant program is reformed to reflect the total cost of attendance for low-income students and adult learners facing socio-economic barriers, including programmatic barriers that prevent a large adult population from accessing financial aid. Such reform should include removing GPA requirements; time out of high school; age eligibility; extend the entitlement award to all Pell-eligible students; and maintain the access award levels, which should also be increased overtime to reflect annual growth factors. Revamping a comprehensive CalGrant program will enable more students and adult learners to access aid and assist them in completing their educational and career goals.
● Medi-Cal Access for Immigrants: $68 million ($49.6 million General Fund and $18.5 federal funds) to support expansion of full-scope Medi-Cal coverage to all income-eligible individuals 60 years of age or older regardless of immigration status.
● Golden State Stimulus – Round 2: $8.1 billion for an additional Golden State Stimulus direct payments of $600 to Californians, including $500 payments for immigrant families. This 2nd round of stimulus payments are considered tax rebates for the majority of Californians in an effort to address the Gann limit, a constitutionally requirement of the State to split excess tax revenues above the limit between education and rebates to taxpayers. The May Revision proposes that taxpayers get refunds in the current budget year while K-14 education would receive its portion in 2022-23.
● Child Care: 100,000 subsidized child care slots using a combination of Federal and General Fund resources. In addition to these slots, an ongoing $83 million to fund 6,500 new child care slots in 2021-22 and ongoing by using Prop 64 cannabis tax revenues. The Legislative Women’s Caucus is pushing for an investment of 200,000 slots, including waiving family fees for all California families.
● Universal Basic Income Pilot: $35 million in General Fund over 5-years to establish Universal Basic Income pilot programs to support low-income Californians. These pilot programs would be administered by cities or counties, and require a local-match commitment, and ensure low-income Californians receive this financial support.
● Utility Bills Relief: $2 billion in federal funding to assist Californians with unpaid utility bills, including $1 billion for households that have not been able to pay their water bills due to the pandemic.
● Rent Relief: Provides an additional $2.6 billion to California for both state and local entitlement jurisdictions for a total of $5.2 billion in federal rental relief aid.
● CalWORKs Housing Support Program: $475 million General Fund in both 2021-22 and in 2022-23 to expand the existing CalWORKs Housing Support program.
Investments in Broadband Access For All
Securing broadband access for all Californians is a top priority for EDGE. As the pandemic unveiled countless inequities, the digital divide proved to be one of the most challenging barriers for many underserved communities who continue to lack internet connectivity, causing delays in learning, job search, unemployment insurance benefits, health care visits, and so forth. The May Revision makes a critical $7 billion dollar investment (over 3 years) to expand broadband infrastructure and enhance internet access for all Californians. EDGE is also in strong support of ensuring digital literacy training is a component of a broadband for all package, which is necessary as Californians get connected to the internet and learn how to use the technology at hand by having access to digital literacy training programs, and in their preferred language. The May Revision also provides $35 million one-time General Fund available through 2024-25, to expand broadband access to isolated and underserved communities through a collaborative partnership of local education agencies, regional libraries, and telehealth providers and leverage available federal funds.
Investment to Support the Cradle to Career Data System
The May Revision maintains investments to support the creation of the Cradle-to-Career data system – a $15 million General Fund investment to provide support and resources for the establishment of the data system, seeking to integrate K-12, higher education, social services, financial aid, workforce training, and employment data in a secure system – fully leveraging quality data to improve outcomes for all students and adult learners from “cradle to career.”
Another $3.8 million ongoing Prop 98 investment will fund the CA Career Guidance Initiative (CCGI) which provides an interface for student data between high schools, students, and families that will be integrated into the data system. The data system is one of EDGE’s biggest priorities this year. Additionally, the May Revision provides funding for additional data infrastructure – $15 million one-time General Fund for building a shared data infrastructure between the Community College Chancellor’s Office and the Labor Agency in order to simplify collaboration, job outcomes, and other data gathering elements.
Overall, the May Revision makes historic proposed investments that California has never seen before. However, how the money is allocated and how programing is implemented is of great importance. EDGE looks forward to working with our State leaders to ensure that every dollar is spent with an equity lens, and leads people to good jobs, as well as provide a safety net that will enable students paid low incomes, adult learners, and displaced workers to complete their educational programs. As budget discussions continue, the CA EDGE Coalition stands united in its commitment to securing meaningful and equitable investments that support the advancement and economic mobility of all Californians. Our Board is currently analyzing and developing positions on various May Revision items and we look forward to working with the Administration and Legislature to provide EDGE’s perspective on the budget proposal to achieve shared goals.
The budget must be passed by the Legislature on June 15th.
For questions, please contact Anna Alvarado, Policy Director, at email@example.com