Workforce Development Policy at the Federal Level: Cuts Anticipated, Details Pending

On February 27th, President Trump released a budget blueprint for fiscal year 2018 to government agencies that will increase defense and security spending by $54 billion and cut roughly the same amount from non-defense programs.  While the release is just a blueprint, the President will deliver his official budget to Congress next week with proposed cuts widely anticipated.  What will be the impact on federal funding for workforce development programs?  It’s unclear at this point, but the National Skills Coalition, a Washington D.C. based advocacy group focused on workforce development policy, anticipates there will be significant funding reductions across the board.  With details pending further negotiations with Congress, workforce development leaders are in a wait and see mode.  In the meantime, consensus is that the current budget will be extended through the fiscal year end on September 30th, with funding levels unchanged from the previous year.

One of the top concerns expressed by workforce development leaders is that cuts will jeopardize adequate training for roles related to infrastructure projects at the federal and local level. President Trump has expressed support for significant infrastructure spending, specific details to be released.  Substantial investment is already happening at the local level, with the passage of Measure M and various other projects such as the LAX modernization program.  An LAEDC report on the construction industry in the fall of last year indicated that while there is not a general shortage of trained talent in Southern California, specific occupations may be experiencing a shortage of trained workers.  The report was released prior to the passage of Measure M.

To help students better access training and close the skill gap across industries, Senators Tim Kaine and Rob Portman introduced the Jumpstart Our Business by Supporting Students (JOBS) Act to expand Pell Grant eligibility to short-term job training programs earlier this year.  Under current law, Pell Grants can only be applied toward programs that are more than 600 clock hours, or at least 15 weeks in length.  The JOBS Act would expand eligibility to students who are enrolled in programs that are at least eight weeks long and that lead to industry-recognized credentials and certificates.  It is unclear if the President supports the proposed legislation.

Government funded workforce development programs totals $6.5 billion in the state of California, with roughly one-third coming from federal sources and two-thirds from the state General Fund.  They provide a range of job-specific training, basic skills education, and related support services to help individuals prepare for employment.  The California Legislative Analyst’s Office estimates that roughly 3 million people access California workforce programs annually. Community colleges and schools are the major providers of workforce education and training, relying primarily on state funds. The Department of Social Services and the Employment Development Department (EDD) are among several state agencies that run programs primarily financed by federal funds, which would be most impacted by federal budget cuts.  These programs serve a range of demographics, including low income individuals, individuals with multiple barriers to employment, veterans, and dislocated workers.