Educators and school boards consider legal action against Gov. Newsom’s revenue shortfall solution

The article was updated on May 20 to include a quote from Rob Manwaring and a graphic showing differences in Prop. 98 funding between the governor’s May budget revision and CTA’s estimate of full funding.

Opposition from two influential education organizations could potentially thwart Gov. Gavin Newsom’s efforts to address a significant state budget deficit for TK-12 schools and community colleges, leading to potential legal action this summer with uncertain outcomes.

The disagreement centers around Proposition 98, a complex formula that determines the annual amount of funding required from the state’s general fund for schools and community colleges. While Newsom asserts compliance with the law by largely sparing schools and community colleges from the major budget cuts affecting other parts of the state government, the California School Boards Association and the California Teachers Association are not satisfied.

The California School Boards Association and the California Teachers Association have both threatened legal action over what they see as an attempt to circumvent the Proposition 98 formula, potentially depriving schools and community colleges of billions of dollars. They argue that allowing Newsom’s strategy to proceed could establish a costly and undesirable precedent for future governors.

David Goldberg, CTA President

CTA President David Goldberg criticized the budget maneuver as an attack on public school funding that could have long-lasting negative effects.

Patrick O’Donnell, representing the school boards association, expressed their willingness to engage with the governor but emphasized their commitment to upholding the state constitution on Proposition 98.

Similar to other state entities, schools and community colleges are facing substantial revenue shortfalls, with a decrease of $17.7 billion in Proposition 98 funding over three years, including $3.7 billion just since January.

A significant portion of this decrease was due to an initial miscalculation caused by delays resulting from winter storms in early 2023. As a result, Newsom assured schools and community colleges that they would not be penalized despite the challenge of addressing the budget discrepancy.

To remedy the situation, the Department of Finance proposed a plan involving a $8.8 billion payment in cash over a five-year period starting in 2025-26. While the Department of Finance considers this plan to be legal and beneficial for providing stable support, concerns have been raised about its prudence.

CTA and the school boards association oppose the handling of the Proposition 98 funding and argue that the additional $8.8 billion should be factored into the funding calculations for subsequent years.

According to CTA’s analysis, incorporating the $8.8 billion would significantly increase funding for the upcoming years compared to Newsom’s proposed budget revisions.

CTA expressed concerns over the potential suspension of Proposition 98 and emphasized the importance of protecting school funding amidst the ongoing budgetary challenges.

Rob Manwaring, representing Children Now, criticized the proposed handling of Proposition 98 funding, highlighting the need to adhere to the voters’ intention behind the constitutional amendment.

Suspension of Proposition 98 likely

Newsom’s budget revision includes measures to address the funding shortfall but may involve significant cuts and adjustments that could impact various educational programs and services.

While a resolution in favor of the educational groups may not immediately resolve the revenue shortfall, it could impact the budget balancing efforts and lead to additional challenges ahead.

The potential suspension of Proposition 98 could have various consequences, including further financial strains and the need for solutions to address the resulting deficits.

Legislative discussions will likely intensify regarding the available options for managing the budgetary constraints and ensuring adequate support for schools.

Despite the challenges, CTA underscored the importance of maintaining the constitutional guarantees for school funding and vowed to advocate for legislative action to protect education funding.

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