Gov. Gavin Newsom and the California Teachers Association have reached an agreement that would protect school funding and press pause on a rising feud between state officials and educators.
When Newsom unveiled his budget revisions earlier this month, he proposed a maneuver that would impact Proposition 98, the 1988 voter-approved, constitutional mandate that guarantees minimum funding for California TK-12 schools and community colleges.
Newsom’s administration said last year’s income tax revenues fell “far lower” than projections. And because of the extended tax return deadline after the 2023 winter storms, the state said the size and scope of the declining revenues wasn’t fully clear until November. As a result, schools received more money than they should have — $8.8 billion more.
In his May budget revision, Newsom proposed that the $8.8 billion allocated to schools in 2022-23 would be designated as prepayments for the future — meaning that money wouldn’t count in calculating Prop 98 baseline funds moving forward and essentially giving the state a zero-interest loan.
But because each year’s Prop 98 funding guarantee is calculated through a complex formula that builds on prior years to determine how much money to allocate to schools each year, any change could reduce school funding for years to come. CTA said Newsom’s plan would have lowered the money guaranteed to schools by nearly $12 billion over two years and even more in the long-term.
Educators were outraged, calling the cuts to school funding “unconstitutional” and warning it could threaten California’s school funding system and leave the door open for “future manipulation” of the Prop 98 guarantee.
Just last week, the California Teachers Association intensified its efforts and released a TV ad in the Sacramento area urging the public to pressure lawmakers and Newsom to protect school funding.
Now, the union and Newsom have called a truce and reached a deal to avoid significant cuts and briefly stabilize school funding.
“Fundamentally, there was no difference between the goals of the governor and those of the teacher’s union,” said H.D. Palmer, Deputy Director for External Affairs at California’s Department of Finance. “Find a way to make sure schools didn’t take a cut of billions of dollars in the near term and put schools on a more predictable path in future years.”
Palmer said the agreement was reached after more than two weeks of discussion with the teacher’s union.
The proposed agreement would lower the amount the state said it overpaid schools from $8.8 billion to $6.2 billion. While the state would still consider that $6.2 billion as already paid to schools, the money would remain under Prop 98 — meaning it wouldn’t lower future years’ funding amounts.
The teachers’ union said it understands that the state simply doesn’t have the money needed to fully fund the schools under Prop 98’s guarantee. As a compromise, the state will “suspend” the requirement — paying schools less money in the short-term with the promise of paying the $5.5 billion owed in future years.
The legislature voted to suspend Prop 98 twice before — once in 2004-05 and again in 2010-11 due to severe budget crises.
The California Teachers Association said that while the union wants California to fully fund schools, given the state’s difficult budget deficit, Newsom’s new plan is the “best alternative.”
“The agreement reached with the governor to protect public school funding is a critical step forward for California’s schools and communities,” said the union’s president, David Goldberg. “In the coming weeks we will continue our advocacy with legislators along with our public campaign to protect public school funding in the state budget.”
Because Prop 98 is a state constitutional mandate, the agreement to suspend its guaranteed funding requires a two-thirds vote by the Legislature. Democrats currently hold a supermajority.
Troy Flint, the communications director for the California School Board Association, said the group is still waiting to see the terms of the proposed agreement and has not yet endorsed the deal. CSBA was not included in the negotiations between CTA and the governor’s office.
“The summary of the agreement is very promising. It’s certainly a step in the right direction,” Flint said. “We’re supportive of the idea but we’re also thorough. We need to see the legal language before we can unequivocally endorse.”