Congress has now settled on the funding for the Departments of Labor and Education for the remainder of Fiscal Year (FY) 2026, through September 30, 2026. Funding cuts and block grant proposals were ultimately rejected by Congress - WIOA and connected national programs are now funded at or near current funding levels. With the FY2026 appropriations cycle mainly complete – the Department of Homeland Security remains shutdown due to a lapse in appropriations – attention will turn to the forthcoming Administration budget proposal and FY2027 process. We expect that friends of MUS and broader stakeholders will need to follow a similar blueprint to maintaining workforce funding in the months ahead.
Focus now shifts to WIOA Reauthorization and funding implementation/allocation by U.S. Department of Labor. We expect another WIOA Reauthorization effort in the coming months, beginning with the House Education and Workforce Committee. Given the disruptive dynamics of artificial intelligence on the nation’s economy and workforce, that will add a layer of urgency to these policy discussions. However, like many issues, bipartisan agreement will be difficult to achieve. As we witnessed in 2024, focusing on WIOA specific policies can yield a bipartisan product; efforts by the Trump Administration to ‘dismantle’ the Department of Education via Inter-Agency Agreements (IAA) with the Department of Labor will be the main obstacle to a bipartisan agreement this Congress.
With Congress approving FY2026 funding for the Departments of Labor and Education, we are expecting that formula programs will have a more stable environment for the remainder of the fiscal year. The Administration cancelled contracts and delayed funding allocations during the previous year which created an unpredictable environment for workforce development organizations. Recently, the Department of Labor released $145 million as part of its Registered Apprenticeship investments/allocation. Notably, these grants will be awarded on a pay-for performance basis. This represents an opportunity for local workforce development boards and other organizations to play a role as an intermediary or sponsor to help companies hire and retain apprentices.
Workforce development stakeholders will have a busy next few months with WIOA Reauthorization and funding decisions on the horizon.
