Suit claims schools owed $2b moreGroups contend Prop 98 money diverted
In a lawsuit they will announce today, school administrators and school boards associations will contend that the Legislature and Gov. Jerry Brown illegally shorted K-12 schools and community colleges $2.1 billion owed to them under Proposition 98.
The money was diverted from the general fund as part of Brown’s plan to shift some public safety responsibilities to counties and cities. In return, the governor and Legislature issued an IOU in the form of a promise to ask voters no later than November 2012 to raise taxes and repay what was owed to the schools.
But in their suit, the California School Boards Association and the Association of California School Administrators, along with three unified districts – San Francisco, Los Angeles and Turlock – will argue that shifting 1.06 percent of the state sales tax – about $5 billion – to local agencies denied schools their due, about 40 percent or $2.1 billion, as required under Prop 98, which voters approved as an amendment to the state Constitution. The plaintiffs hope that the courts will rule and order the refund by the end of the fiscal year on June 30.
The other way to cut money for schools would have been to suspend Proposition 98. Doing so would have required a two-thirds majority of the Legislature, but Republicans said they would not support that.
Brown also insisted on dedicating a source of revenue – 1 percent of the sales tax – to transfer state functions to local authorities. He proposed to ask voters to compensate for the loss in Prop 98 revenue by passing higher taxes for education in June, as part of this year’s state budget. But here again, Republicans refused to agree to put a tax plan on the ballot, leaving Brown with a budget shortfall and no time to organize a ballot initiative for 2011.
“No matter what the governor offered on pension reform and other issues, they (Republicans) weren’t going to do it. That was the big shocker,” said John Mockler, the architect of Prop 98 and an adviser to the California Teachers Association. Mockler and the CTA were in on the idea of putting higher taxes on the November 2012 ballot, which would give Brown and supporters time to organize an initiative. The budget and trailer bills stipulated that lost money to the schools would be repaid, whether or not voters approved higher taxes.
“People thought it was best, given where we were,” Mockler said, adding that the obligation to fully fund Prop 98 was not in question.
However, ACSA and CSBA will point out that the Legislature next year is not bound to a past commitment to repay the money, and this fiscal year will end with a Prop 98 violation.
When they passed the state budget in June, lawmakers were hoping that rising state revenues would cover what amounted to a 4 percent shortfall for schools, and they’d end up with the same funding as last year. But now, with revenues running behind projections, it’s appearing more likely there will be midyear cuts to community colleges and K-12, possibly as much as $2 billion.
The deal “looked too good to pass up” to legislators “wanting to maintain the rhetoric of keeping the constitutional requirement that education be the top funding priority,” observed Bill Lucia, CEO of the nonprofit EdVoice. “Had the spring revenues turned out a true harbinger of better times it may have worked, but just three short months later, with most categories of revenues and economic forecasts still flat or anemic, it looks like the courts will have the final say.”
Republican leaders in the Assembly questioned the legality of the diversion of the sales tax revenue and in August requested that Attorney General Kamala Harris issue an opinion. “The California Constitution clearly makes education the state’s number one budget priority,” they wrote, without a hint of irony, in an Aug. 3 letter.
Earlier this month, Deputy Attorney General Susan Duncan Lee wrote back, declining to take a position, indicating the AG expected to represent the state in likely litigation.