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CSBA Litigation Restores $686 Million to Schools in 2019–20 State Budget, Protects More Than $756 Million Annually in Future Budgets

July 15, 2019

California’s public schools will receive hundreds of millions of dollars in additional funding and avoid billions in potential losses thanks to a settlement agreement between the State of California and the California School Boards Association (CSBA). The agreement ensures public schools will receive repayment of $686 million (approximately $110 per student) due to prior year underpayments. It also contains provisions that could protect up to 1 percent of the Proposition 98 guarantee ($756 million in 2017-18 and potentially more in future years) as part of the annual certification process.

“We are pleased that we were able to reach an agreement with the State that upholds both the law and the will of the voters when they passed the Proposition 98 minimum funding guarantee for public schools,” said California School Boards Association President Dr. Emma Turner in a press release on July 2. “At a time when public education is dramatically underfunded, it’s critical that schools — and the students they serve — receive the funding to which they are legally entitled.”

The settlement agreement arose from a trio of lawsuits related to Proposition 98, which voters approved in 1988 to ensure a guaranteed minimum spending level for K-12 public schools and community colleges. In all three cases, CSBA and its Education Legal Alliance (ELA) alleged that the State shortchanged schools by reneging on its Prop 98 obligations.

“The settlements are a credit to CSBA’s Education Legal Alliance and reinforce its status as the preeminent legal voice for California’s school districts and county offices of education,” said CSBA’s CEO & Executive Director Vernon M. Billy. “The advocacy of ELA strengthens California schools and provides essential resources and support for the State’s 6.2 million public school students.”

Provisions to enact the settlements are contained in the budget act and trailer bills signed into law by Gov. Newsom.

Litigation Background

In CSBA v. Cohen (2015), CSBA and its ELA charged that the State violated the constitution when it failed to “rebench” (recalculate) the minimum guaranteed funding for schools to account for the inclusion of childcare expenses the State used to meet its obligation. Subsequently, the Sacramento County Superior Court found that the failure to rebench was an unconstitutional manipulation of the Proposition 98 guarantee, and the State appealed.

In CSBA v. Cohen II (2018), CSBA and its ELA filed a lawsuit challenging provisions of Assembly Bill 1825, a 2018–19 budget trailer bill that would have allowed the State to manipulate how the Proposition 98 minimum education funding guarantee is calculated through the “cost-allocation schedule.” As originally written, AB 1825 would have allowed the state to reduce education funding in future years by up to 1 percent of the prior year’s Proposition 98 guarantee, equivalent to $756 million in 2017-18. That number stood to grow in future years depending on various financial conditions and the size of the Proposition 98 guarantee.

In CSBA v. Bosler (2018), CSBA and its ELA filed a lawsuit arguing that the State was immediately required to repay prior year underpayments when the State certified Proposition 98 funding from 2009–10 through 2016–17, resulting in $686 million in underpayments to K-12 schools and community colleges. This settlement guarantees repayment in full in the 2019–20 and 2020–21 budget cycles.

Source: California School Boards Association



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