State budget: Governor responds to CSBA advocacy

On May 28, Gov. Gavin Newsom’s Administration revealed elements of proposed changes to his Proposition 98 funding maneuver in response to CSBA’s objections
and advocacy, which generated nearly 30,000 emails to the Governor and Legislature. Most welcome was the change by the Governor to no longer reclassify the 2022–23 shortfall in public education funding as non-98 funds. Key takeaways include maintaining funding for public schools at current levels; protecting the integrity of Prop 98 by not reclassifying $6.2 billion in Prop 98 funding as non-Prop 98 funding; suspending Prop 98 in the 2023–24 fiscal year, creating $5.5 billion in maintenance factor (debt), which will be required to be repaid to Prop 98 in future years; utilizing three year-over-year deferrals, each less than $3 billion; and exhausting the Prop
98 Reserve.

CSBA does not take the suspension of Prop 98 lightly. As opposed to the Governor’s initial funding maneuver, which CSBA opposed because it would be unconstitutional as it would have reclassified Proposition 98 moneys as non-education funds, suspending the Prop 98 Guarantee aligns with the State Constitution and preserves the existing statutory framework available to the state. It is also the better alternative to a permanent reduction in public education funding in the short- and long-term. The Legislature has until June 15 to pass a balanced budget and the Governor has until June 30 to sign the budget. As negotiations continue, CSBA will continue to keep its membership informed of developments and opportunities for advocacy.