President’s message: Protecting Proposition 98

By CSBA President Albert Gonzalez

“The Wire,” one of the most critically acclaimed television series of all time, depicts the uneasy intersection of government, law and street life in modern America. Fans of the program will remember one of its recurring themes, a lesson that applies far beyond the gritty streets of Baltimore where the show takes place. One of the show’s central messages was that, no matter his walk of life, “a man got to have a code.” This is true of all men, women and organizations that hope to conduct them themselves with purpose and integrity, and it certainly applies to CSBA.

At CSBA, our code is that we fight to the last inch to protect Proposition 98 and to preserve local control because these principles are essential to strengthen public schools and secure the conditions needed to provide every student with a high-quality education. Unfortunately, Gov. Gavin Newsom’s 2024–25 May Revise contains an existential threat to Prop 98 that demands strong action to uphold our code and protect education funding.

Despite our vigorous objection to the Proposition 98 funding manipulation in the Governor’s January Budget Proposal, he not only included the same dubious accounting gimmick, but doubled down on the maneuver by increasing the amount of money classified as non-education spending. That may seem innocuous at first glance, but the effects on Prop 98 revenue are substantial and, if adopted in the final budget, would reduce school funding for years to come.

In an attempt to bridge a budget deficit, which the Administration now puts at approximately $27 billion after factoring in cuts made earlier this year, the Governor’s staff is thinking “outside the box.” This search for creative solutions has led them onto uneven terrain.

To see why the Administration has strayed from solid ground, it helps to reflect on last year’s budget process. In 2023, the state postponed tax filing deadlines from April to November and was forced to adopt a state budget using estimates instead of confirmed state budget revenues. When actual revenues came in, they fell significantly below estimates meaning the constitutional minimum guarantee for school funding — Proposition 98 — fell about $8 billion short of the budget allocation for 2022–23.

To address this $8 billion funding discrepancy from the 2022–23 fiscal year, the Governor’s January budget proposed an unprecedented and likely unconstitutional “funding maneuver” where the state essentially loans the funds to itself while reclassifying those funds as non-school spending for the purpose of Prop 98 calculations. In addition, the Governor sought to spread the costs of this spending over a five-year period starting in 2025–26, kicking the can down the road for the next Administration and paying a prior-year debt using future state general fund revenues. CSBA is urging the Legislature to reject the maneuver as it violates both the spirit and the statutory terms of Prop 98.

We sounded the alarm when the Governor first unveiled this proposal in January and remained in conversation with the Administration, hoping to dissuade them from pursuing this option. Yet, when a reporter asked Gov. Newsom during his May Revise press conference whether he intended to move forward with the Prop 98 maneuver, he answered in the affirmative — and emphatically so. What’s worse, he added that he was increasing the amount of funding in the maneuver from $8 billion to $8.8 billion.

While the Governor is well-intentioned (his stated motivation is to maintain education funding and avoid school layoffs), his defense of the Prop 98 maneuver is short-sighted. It might ease the pain of the upcoming 2024–25 budget, but at enormous cost, as it would disregard Prop 98 law and reduce school funding for the foreseeable future.

We have grave concerns that, if adopted, the maneuver would alter the constitutional formulas by taking the $8.8 billion in spending — money that was clearly allocated to schools — and reclassifying it so it doesn’t count as prior-year spending on schools. By lowering the baseline for calculating education funding in coming years, the Governor’s May Revise sets a terrible precedent that potentially destabilizes education funding and undermines the intent of the voters who approved Prop 98.

As I told the press on the day of the May Revise, “While we understand the appeal of short-term fixes, they can’t come at the long-term expense of public school funding, nor run counter to the State Constitution and the will of the electorate.” It might be tempting to take easy money that helps this year only, but it would make life much harder for schools, students and staff in the years to come.

It would be against our principles — and against the interest of public schools — to co-sign a scheme that undercuts education funding for years into the future, merely to curry favor with the Governor or to secure one-time funds. CSBA is committed to the long-term sustainability and success of California’s public schools and we will never deviate from that code.