Director Liz Gagan told the Joint Appropriations Committee that federal uncertainty is forcing the Department of Workforce Services to adjust its budget plans and staffing mix. "We receive on average about $450,000 in federal funds per year to run the program," Gagan said, describing a request to relinquish the Senior Community Service Employment Program grant and the two positions tied to it.

The nut graf: The agency framed the move as a response to changing federal priorities and program performance assessments. Gagan said the White House's "Building the Workforce for the Golden Age" strategy and shifting Department of Labor flexibilities left DWS able to decline the grant after DOL granted permission in September. She told members the state has other programs to serve low‑income older workers and does not expect the population to lose access to services.

Committee members pressed for details on how much of the agency payroll relies on federal money and how federal funding volatility would affect services. Gagan and Deputy Director Jason Wolf said many DWS positions are federally funded and that a proposed 24% cut in Department of Labor workforce programs in the White House budget could reduce roughly $9 million in program dollars by about $2 million if that scenario occurred.

The presentation included an overview of DWS's budget structure (about 43% federal funds, 41% other funds, 16% general funds, roughly $223 million total) and core programs—unemployment insurance (UI), workers' compensation, vocational rehabilitation, OSHA outreach and workforce centers. On UI funding history, agency staff said CARES Act deposits kept UI tax rates low and produced two rate holidays, and that the UI trust fund minimum tax rate was 0 between 2020 and 2024.

Committee members asked for clarifying figures and historical totals; staff and the budget director agreed to follow up with exact CARES Act injections and to correct narrative/table discrepancies flagged in the budget book. Gagan also outlined the Employment Support Fund cashflow: an October negative cash balance was addressed by a B11 transfer from Fund 501, putting the ESF at about $1.86 million and with a new UI grant of roughly $7.6 million on hand.

What happens next: The committee requested follow‑up documentation on table reconciliations, the precise federal grant figures referenced and a breakdown of the proposed relinquished positions and salary/pass‑through splits. The agency will supply those figures ahead of next week's markup.