HB 365 — Workforce Education Act (2025) — Summary
Status: Enacted (Session 2025). Signed by Governor June 12, 2025; effective date: June 20, 2025.
Purpose
- To strengthen alignment between education and workforce needs by revising community college funding, creating a reserve to support unbudgeted enrollment growth, expanding funding for cooperative innovative high schools, establishing grant programs to promote career and technical education (CTE) and related opportunities, and increasing efforts to recruit public‑school students into community college programs.
Key provisions
1. Revise community college funding model
- Directs the State Board of Community Colleges to revise its funding formula beginning FY 2025–26.
- Minimum criteria:
- Maintain a base allocation for every community college.
- Provide additional funds based on full‑time‑equivalent (FTE) enrollment in curriculum, workforce continuing education, Basic Skills, Customized Training Program, and Small Business Center Network courses.
- FTE to be calculated as the greater of current year total enrollment or the two‑year average.
- Enrollment‑based funds must be weighted by workforce sector; weights to reflect salary data and labor‑market demand.
Create an Enrollment Increase Reserve
- Establishes the Enrollment Increase Reserve administered by the State Board to fund colleges that experience unbudgeted enrollment increases.
- Eligible increases: >5% above budgeted enrollment in specified course categories or an increase of more than 325 FTE students.
- Reserve monies do not revert at fiscal year end; remain available until expended.
- Appropriations for FY 2025–26: $6,000,000 (nonrecurring) to the Enrollment Increase Reserve.
Appropriations to implement funding changes
- $94,000,000 recurring (General Fund) to the Community Colleges System Office for FY 2025–26 to implement the revised funding model and related provisions.
Cooperative Innovative High School funding expansion
- New supplemental allotments tied to county development tiers:
- Development Tier One: $740,000 recurring for the first approved cooperative innovative high school in a district; $370,000 for each subsequent school; virtual school allocation $200,000 recurring. Northeast Regional School of Biotechnology and Agriscience: $310,000 recurring.
- Development Tier Two: $590,000 for first school; $295,000 for each subsequent; virtual school $200,000. (Statutory text sets the allocation schedule by tier and school order.)
Workforce sector review
- State Board must review and, as needed, revise workforce sector designations used to weight course funding by January 15, 2027, and every two years thereafter.
Grants and student outreach (scope)
- The bill creates grant programs for the Department of Public Instruction to promote CTE and other educational opportunities and directs efforts to promote community college enrollment among public school students (statutory headings and synopsis provided; full program rules and grant details to be established administratively).
Who is affected
- Community colleges and their students (FTE funding and new reserve eligibility).
- State Board of Community Colleges (responsible for formula revisions, reserve administration).
- Local school administrative units and cooperative innovative high schools (new supplemental funding).
- Department of Public Instruction (new grant programs and outreach responsibilities).
- Employers and regional workforce partners (through sector‑weighted funding and program alignment).
Implementation & timeline
- Revised funding model to take effect for FY 2025–26 allocations.
- Workforce sector review due by Jan 15, 2027, and biennially thereafter.
- Reserve and new funding streams will be administered per rules adopted by the State Board; programmatic details and grant criteria to be issued administratively.
Fiscal note (from bill text)
- $94,000,000 recurring appropriation to Community Colleges System Office (FY 2025–26).
- $6,000,000 nonrecurring appropriation to the Enrollment Increase Reserve (FY 2025–26).
- Additional fiscal impacts depend on State Board rulemaking, grant awards, and future appropriations.
