The past year has been marked by grim forecasts for the K-12 education funding landscape. School districts continue to grapple with shrinking budgets that have resulted from the end of pandemic-era ESSER allocations and declining enrollments as well as overall reductions in spending power due to inflation. As states and municipalities face similar economic pressures, they, too, have been forced to adjust funding formulas to schools and districts. 

This all comes amidst the backdrop of anticipated reductions in federal funding streams that underpin a significant proportion of district operations, staffing, and student support services. Though the Fiscal Year (FY) 2026 has not yet been passed, the proposal from the administration calls for a $4.5 billion decrease in K-12 funding and $12 billion overall across all levels of education, including higher ed

Despite this bleak outlook, there is one notable area where investment remains stable and, in some cases increasing: career and technical education (CTE) and workforce development. Federal support through Perkins funding and other efforts to support CTE programs in schools have remained a bright spot, signaling growing prioritization of the critical role K-12 schools play in preparing students for postsecondary careers. 

K-12 Efforts that Support Workforce Development are a Federal Priority 

The FY 2026 budget proposal from the Department of Education clearly and explicitly calls out the urgency of expanding and strengthening CTE programs explaining that federal education investments should target “workforce development to align with our country’s reindustrialization needs and equip American workers to fill the growing demand for skilled trades and other occupations.” 

To that end and despite reductions in other areas, the proposal maintains Perkins funding at $1.4 Billion. Beyond the level funding, the Department of Education has put an emphasis on expanding access to Perkins funds for middle and high school students. If enacted, this emphasis would mean a larger share of Perkins support flowing directly to K-12 district  Additionally, the budget proposal provides $10.2 million for Career and Technical Education National Programs that would support schools and districts in building out their work-based learning programs–specifically apprenticeships that equip students with competency- and skills-based education and training needed for many high-demand trades jobs. The US Department of Education has also launched the Your AI Horizons Challenge, which encourages high school students to design innovative ways to integrate AI into traditional careers with the goal of helping them build the skills needed for a rapidly evolving labor market.

Taken together, these investments underscore a clear federal priority to position K-12 education as a direct driver of economic growth. By sustaining Perkins, expanding apprenticeship pathways, and incentivizing innovation through AI-integrated workforce challenges, the Department of Education is signaling that any expansion in federal support will likely be focused on targeted initiatives that link learning to labor-market needs and demands.

What This Means for School Districts

Over the past decade, there has been a growing recognition that preparing students for careers is a key function of K-12 school districts. Practitioners and policymakers alike recognize the value of this career training and exploration for all students–regardless of their postsecondary pathway. Schools and districts can and should take their cues from these federal priorities by aligning local investments, partnerships, and programming with workforce development goals. 

As districts struggle with cutting programs and personnel, they should consider finding ways to expand and integrate CTE programs into core academic offerings. This includes strengthening CTE pathways, expanding access to apprenticeships and work-based learning, and building connections with local employers and community colleges to ensure students are gaining skills that match regional labor demands. It also means embracing emerging technologies like AI in ways that complement traditional career pathways, preparing students not only for today’s workforce but also for the rapidly evolving roles of the future. By doing so, districts position themselves to maximize stable federal and state funding streams while ensuring that every student graduates with the skills, experiences, and credentials needed to succeed in their postsecondary path–whether that is college, career, or military.

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