Thanks to all Workforce Matters members who joined us for Workforce Matters’ 2025 budget briefing and discussion on March 20.  A special thanks to Economic Opportunity Funders for their excellent Annual Budget and Tax Briefing, which provided the foundation for our conversation, and to our speakers, Katie Spiker from the National Skills Coalition and Kermit Kaleba from the Lumina Foundation.

During the call, Workforce Matters provided a brief recap of this year’s EOF Budget and Tax Briefing, focusing mainly on the federal briefing session.  The main highlights relevant to workforce development funding and policy included the following: 

  • There is a lot on the table for 2025, including not only the budget, but also a tax bill that makes decisions about the 2017 tax cuts and whether/how they expire; the expiration of expanded coverage for ACA marketplace coverage; the debt ceiling (which was suspended through Jan 2025); appropriations; and Farm Bill reauthorization, which is relevant for SNAP E&T, a key source of support for many workforce programs.
  • While WFM does not focus on tax policy, it is worth noting that tax policy does have a direct impact on the budget because of the impact on the revenue picture we are dealing with. Paying attention to these debates and supporting communities/grantees so they can pay attention to these debates is critical.
  • The politics of a presidential election year will be in play and raise the stakes for these conversations. 

Katie Spiker reflected on what she saw in the President’s budget specific to workforce development and the opportunities/items for funders to pay attention to. Please refer to NSC’s analysis for more detail.

  • The President’s budget builds on investments over the last few years: Bipartisan Infrastructure Law (“Infrastructure Investment and Jobs Act”), Inflation Reduction Act, CHIPs etc. There’s an emphasis on partnership among agencies to implement workforce priorities. 
  • The President’s budget includes a new Career Training Fund ($8B) to fund training costs and support services for workers 
  • A proposed $12B Reducing the Costs of College Fund increases access to free career-connected dual enrollment programs; provides awards to colleges and universities that expand the number of students served; and scales evidence-based strategies that increase completion rates and reduce costs for students. 
  • Additional budget items include: proposed increases to programs that are supporting partnerships between community college partnerships with employers and the workforce system; an increase in CTE National Programs; and support for the SECTOR program for industry sector partnerships. 
  • Outside of the budget, funders might want to pay attention to WIOA reauthorization, since reauthorization and funding through WIOA may set the stage for the funding that our communities and grantees will be receiving over the next decade.

Kermit Kaleba provided further reflections on the workforce budget proposals, possible impacts of a change in administration, and some things that Lumina is doing to support existing grantees.

  • Workforce development has relatively strong bipartisan support and formula funding has not historically been a target for huge increases or decreases in funding.
  • Reauthorization of the Farm Bill and impacts on SNAP E&T is something to keep an eye on, as this program has grown to be a powerful tool for developing workforce opportunities for individuals with low incomes. 
  • Keep an eye on work related to racial equity and inclusion, as the current administration has placed a lot of emphasis on trying to address the effects of structural racism and historical inequities in access to education and workforce. Going forward, there is a lot at stake in terms of the kinds of work that can be supported directly or indirectly through federal funding. 
  • Lumina is currently supporting workforce grantees in some of the following ways:
    • Funding TA to federal grantees to meet their self-described equity goals, such as our grant with the Century Foundation and Urban Manufacturing Alliance to expand opportunities for workers of color in advanced manufacturing.
    • Emphasizing and providing support for equity goals and work through learning and technical assistance. 
    • Holding informal risk assessment conversations with grantees about their level of exposure to federal funding to help them contingency plan.

The speakers offered a few closing thoughts about roles that funders can play in contributing to workforce budget/policy conversations 

  • Invest in gathering evidence and storytelling: It is helpful for funders to support research and analysis that have relevance to key issues at the state/federal levels. Even when you’re making programmatic investments, there are always policy lessons to learn. Capture the policy barriers that impede what works. Think about how this information is shared with lawmakers and support grantees in sharing their stories and evidence. This is going to be key for WIOA reauthorization as well, as there has been a lot of conversation about evidence-based practices, and funders can help to build the evidence base along with defining what good evidence might look like.
  • Focus on magnifiers: Funders can focus on the magnifier effect – where state and philanthropic investments may magnify federal investments.
  • Expand your circle beyond workforce agencies: Don’t forget about other agencies involved in workforce development, such as Education, Commerce, Energy, and Transportation. It is critical to educate state and federal officials in these agencies about good workforce programs, as so much discretionary workforce funding will go through these agencies in coming years.
  • Expand your relationships beyond workforce funders: Along the same lines, reaching out to funders in climate, energy, etc can help build greater understanding of workforce programs and outcomes. Think about how to partner with funders who are not in workforce development but may see value in workforce partners.