School boards sue, saying Newsom jeopardized funding guaranteed for schools

Gov. Gavin Newsom’s funding plan for California schools violates the state’s constitution and could endanger school funding in years to come, according to a lawsuit filed today in Sacramento.

The California School Boards Association, which filed the suit, has been outspoken in its opposition to the plan since Newsom introduced his revised budget in May. The state already passed its budget and the lawsuit won’t affect money that’s already been allotted to schools, but the association hopes a judge will strike down what they described as Newsom’s “funding maneuver.”

The governor, trying to preserve funding for schools amid a tight economic climate, made up an $8.8 billion shortfall in the Proposition 98 school funding guarantee by borrowing from the state’s general fund.

“The manipulation … is unacceptable as it removes a funding safety net that has served schools for more than three decades and could be used by future governors and legislatures to avoid complying with the Proposition 98 funding guarantee,” association president Albert Gonzalez said.

Newsom’s office said the accounting move was not only legal, but saved schools from potential budget cuts.

“Because general fund revenues were significantly lower than estimated … the recalculated minimum guarantee for fiscal year 2022-23 is roughly $8.8 billion less than previously calculated,” Joe Stephenshaw, the state’s director of finance, wrote to legislative leaders in July. “To help address this decrease in the minimum guarantee without impacting school district and community college district budgets,” the budget shifts some spending sources.

Proposition 98, passed nearly 40 years ago, sets a minimum funding guarantee for California’s public schools. Based on a complex set of formulas, the guarantee is roughly 40% of the state’s budget, and pays for things such as teacher salaries and day-to-day operating expenses at the state’s 10,000 schools.

Newsom has invested heavily in schools during his stint as governor, funneling billions to programs like community schools, improved school meals, student mental health and other initiatives. He’s said that these programs are especially important as students recover from the pandemic, academically as well as emotionally.

California’s per-pupil spending, which used to be among the nation’s lowest, is now above average, according to the Public Policy Institute of California. In 2022-23, California spent $19,475 per student, counting revenue from all sources.

Overall, the education budget this year was $134 billion.

Schools are facing a precarious budget outlook, as federal pandemic relief money expires, absenteeism remains high and enrollment continues to drop in many parts of the state. California funds schools based on attendance, so fewer students in classrooms equals less revenue from the state.

Meanwhile, schools are trying to find money to maintain programs that have proven successful, such as academic tutoring, after-school programs and summer school. They’re also grappling with teacher shortages in some subjects, and raising salaries to attract and retain staff.