NJBIA recently held a joint meeting of the Committee on Education & Workforce Development and the Committee on Employment & Labor Policy to discuss how federal budget proposals and new laws could reshape education, labor, and workforce programs in New Jersey.
Testimony from national and local experts highlighted issues ranging from Pell Grants and workforce training to the debate over independent contractors.
Jaren Culina of the National Skills Coalition began the meeting with a blunt warning: the United States is falling behind the rest of the world when it comes to investing in its workers. While European nations are spending more to train and reskill, the U.S. is cutting back workforce development. Culina pointed to recent funding rescissions that pulled back already approved dollars for FY25 and warned that more cuts may be coming.
Culina discussed the ripple effects of the recently passed One Big Beautiful Bill Act (OBBBA). Although the law doesn’t directly cut education or workforce dollars, it reshapes the safety net many students rely on by tightening access to Medicaid and SNAP, changing the Child Tax Credit, and adding new work requirements.
Low-income learners are likely to feel these changes most sharply, citing projections that the OBBBA could lower national healthcare spending by $800 billion over the next decade, including $200 billion more in uncompensated care, putting further strain on local hospitals and services.
The hearing then shifted to the competing visions laid out in the federal FY26 budget. The President’s proposal calls for eliminating programs like Adult Education, ESL classes, TRIO, community schools, and Job Corps, while reducing Pell Grants by $1,700 per student.
Career and Technical Education (CTE) funding would stay flat, but high schools and community colleges would no longer be eligible partners. A new program called “Make America Skilled Again” would combine 11 separate programs into one—but with $1.6 billion less than current levels.
The Senate, by contrast, would largely maintain funding levels and avoid sweeping consolidations. The House budget goes even further than the President’s plan, cutting WIOA Youth programs, Reentry Employment Opportunities, and the Women’s Bureau, while slashing Job Corps by half and eliminating Adult Education.
Yet, even the House plan includes a $1.475 billion boost to CTE, signaling bipartisan recognition of the need to strengthen workforce training, particularly in manufacturing.
Jennifer Keyes-Maloney of the New Jersey Association of State Colleges and Universities focused on OBBBA’s impact on higher education. She welcomed the return of Pell Grant eligibility for part-time students, though the change won’t take effect until 2026–2027.
At the same time, she raised red flags over new federal student loan caps—$50,000 for undergraduates, $100,000 for graduate students, and $200,000 for professional degrees. While aimed at curbing student debt, these limits may push students into the riskier private loan market.
Keyes-Maloney also flagged potential cuts to Parent PLUS loans and new accountability rules for colleges, which would require them to show students perform better than peers who don’t attend—a standard not yet clearly defined.
Independent workers also took center stage at the meeting. Fight for Freelancers co-founder Kim Kavin warned that state and federal proposals modeled after California’s Assembly Bill 5 (AB5) could devastate legitimate freelancers.
While AB5 was meant to prevent worker misclassification, she said it caused widespread disruption, and only 0.3% of public comments backed the New Jersey version of the rule. Even New Jersey’s Office of the Public Defender opposed it, citing concerns over access to legal representation.
Kavin noted that opposition to New Jersey’s own proposed version of the rule was overwhelming—3-to-1 against at June's public hearing—and predicted legal battles and a possible flight of independent workers to other states if it becomes law.
Closing out the meeting, Gary La Spisa, senior vice president of the Insurance Council of New Jersey, underscored how reclassification rules could threaten insurance agents, who have operated as independent business owners since the 1940s.
Because of compensation systems and multistate licensing rules, many agents could fail the so-called “ABC test” and be forced into employee status. A recent poll showed 94% of life insurance agents oppose such a change.
Without an exemption, La Spisa warned, many agencies could close or relocate, disrupting a major sector of New Jersey’s economy.
