Will Newsom’s workforce funding initiatives survive budget cuts?

from Adam EchelmanCalMatters

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Standing in West Sacramento high school cafeteria in 2023, Governor Gavin Newsom promised fundamental reforms to the state’s vocational training programs. A few months later he was pre fire truck in Modestoand later, in welding classroom at Reading, making the same promise.

It was “a source of pride” Newsom said last year.

A handful of these reforms are now underway. A new interagency council designed to increase collaboration between workforce providers is meeting next week. The state is also developing a new type digital resume which would help students and workers to consolidate information about their work experience and education.

But as the state faces another budget shortfall, a flagship workforce program may be forced to scale back. One of the state’s leading agencies for coordinating workforce training, the California Workforce Development Board, could lose 20 percent of its staff.

In the governor’s budget proposal for fiscal year 2026-27, several workforce programs, including the governor’s “partnerships for high road training,” will receive little or no new funding, meaning they could close when the next governor takes office or soon after. The Legislature has already passed a budget that largely adopts Newsom’s proposals, and the governor has until the end of the month to approve it.

Some vocational training organizations have criticized the governor’s proposal to freeze new funding this year.

“At a time when affordability is such a big concern, we seem to be focusing on how much things cost and not enough on what people can earn,” Julia Hatton, president of the Rising Sun Center for Opportunity, told CalMatters. Her organization trains workers for construction jobs and climate-related careers and has received nearly $4 million in government workforce grants.

However, during a legislative hearing in April, Allison Hewitt, a budget analyst with the California Department of Finance, said the state is still committed to workforce development and that the board’s budget is not being cut, it’s just not getting new funding. The Workforce Development Board received a “surge” grants over the past few years, and those dollars have been used up, so less funding is available this year, she said.

That didn’t sit well with at least one lawmaker.

“I mean you can say anything you want,” said Senator Maria Elena DurazoDemocrat from Los Angeles, in response. “But if we don’t offer funding for it … then you’re basically saying this is going to be the new policy. The bottom line is that without funding it’s not a reality.”

In a statement emailed to CalMatters, Marisa Saldivar, the governor’s spokeswoman, said Newsom’s workforce plan focuses on “structural changes to benefit students that don’t always require funding.”

HD Palmer, a spokesman for the California Department of Finance, responded in the same email, saying the current budget offers more than $250 million in new workforce funding, including in health care and construction.

By comparison, the state invested more than $2.2 billion in new workforce grants in the 2022-23 budget year.

Have workforce programs succeeded?

For decades, states and the federal government have poured money into job training programs, especially for low-income workers without college degrees, but the results they are often poor. Graduates eventually earn minimum wage or find employment with low retentionwhere many workers leave within the first year.

To improve outcomes, California created high-level training partnerships to target job training programs that lead to long-term gainful employment where the employer, not just the government, has a stake in the worker’s professional growth. Starting around 2014, the state put a small amount of money into these programs, said Stuart Knox, secretary of the California Labor and Workforce Development Agency.

In 2021 and 2022, the state made “massive investments in the workforce,” he said, pouring hundreds of millions into high-tech programs across the state, including construction, health care, technology and public sector jobs. The state sent money to current and former oil workers to help them retrain for careers when refineries close. He also sent money to youth apprenticeship programs.

There are results mixed. In the high-level program, some grants helped train hundreds or thousands of workers for union jobs, while other grants created few concrete benefits for workers. One grant was supposed to train workers at the electric vehicle company Proterra, but the company closed before the workers could begin.

This year, MP Rick Chavez ZburDemocrat from Los Angeles, suggests account to further restrict how money is used for high roads.

Of the roughly 1,700 oil workers who could have benefited from state retraining subsidies, only about 500 had participated as of May, according to an analysis of the bill. This billauthor of Culver City Assemblyman Isaac Bryan and a member of the San Rafael Assembly Damon Connelly, both Democrats would give recipients more time to spend the money.

A “Master Plan” for Career Education

In 2023, Newsom’s plans for the workforce culminated with executive order calling for the creation of a career education master plan that would create a “new foundation” for the state. The planissued in 2025, called for better coordination among the state’s labor providers who often compete for the same students. The masterplan also calls for more active vocational training programs and highlights ongoing work to support young apprentices.

“We’re definitely not done. We’re kind of in the middle of the stage,” Knox said. “What you’re seeing is a little bit less money, yes, program-wise, but that’s because we’ve made such a huge investment from 2021 onwards in the system (and) those outcomes are now what we’re focused on.”

Knox pointed to the results of the master plan, including the growth of double recording, which allows high school students to take college courses. The state also helps thousands more students to get college credit for their previous work experiencehe said.

Palmer, of the state Department of Finance, said in an email that the current proposal from the Legislature includes more funding for both dual enrollment and helping students get credit for their work experience. However, these funding allocations come from another money bank known as Proposition 98, which is largely limited to education.

The Shirley Ware Education Center, a national job training nonprofit founded in Oakland, was among the earliest and largest recipients of quality training grants, which it has used to help more than 5,500 workers find better jobs, mostly in the health care industry. Overall, the organization received more than $40 million in state workforce dollars starting in 2017.

“When the state was flush with money, they put a lot of money into these programs,” said Rebecca Hanson, executive director. Now she said the government’s budget deficit makes it “hard to argue” for increased funding, especially when so many other essential services are lining cuts.

Hanson’s high-profile workforce grant ends in 2027, but even then, she said she’s not too worried because her organization has other funding and is used to these fluctuations in government support. “Hopefully, as we talk about 2028, we can find other money.”

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.