California School Districts Plead With Newsom to Restore Budget

Education officials across California are calling on the governor and state Legislature to scrap a plan to withhold billions in education funding that they say means more cuts for students and continues a harmful trend of underfunding.

Ahead of Gov. Gavin Newsom’s revised budget proposal, expected next week, school district leaders across the state are pushing for him to allocate the full amount of Proposition 98 funding required by the state.

“The proposed withholding would trigger real reductions to student services, academic interventions, mental health services, staffing, and programs that our students rely on every single day,” said Edgar Zazueta, the executive director of the Association of California School Administrators, at a press conference this week. “California has a responsibility right now. It’s to honor the commitment that they’ve made to public education, to protect students and to fully fund Prop. 98.”

Proposition 98 requires an annual minimum guarantee of funding for K-12 schools and community colleges, which equates to about 40% of the state’s general fund. In his draft budget released in January, Newsom proposed holding back $5.6 billion earmarked for schools, based on general fund revenue for the 2025-2026 year.

While Newsom said the deferral would mitigate the risk of appropriating more resources than end up being available, due to “persistent uncertainty in revenue projections,” school boards, district officials and unions across the state said delaying the funding violates the state constitution, and will mean real losses for districts already strapped for cash.

Though the governor has touted “historic” education allocations over recent years — including an unexpected $22 billion in additional funding for next year — school districts across the Bay Area and beyond are facing massive, multi-year budget shortfalls.

Many have lost per-pupil funding due to enrollment declines, and California School Board Association spokesperson Troy Flint said rising costs — for teacher compensation, pension and health care contributions and special education — are outpacing funding gains.

“When you add all that up, the idea that schools have more money is, while it’s intuitive, not reflective of reality,” Flint said.

According to Barrett Snider, an education lobbyist with Capitol Advisors, the state sees withholding this pool of money, which is an excess of the projected funding for last year, as “No harm, no foul” for school districts, and a possible solution to pay for higher-than-anticipated costs elsewhere in the state budget. The education community disagrees.

“This is a chronically underfunded system,” Snider said. “We’ve got declining enrollment all over the state. We’ve got pressure from labor because the cost of living has gone up everywhere. We need to solve that problem, so you want to borrow money from us?”

CSBA estimates that the delay means losing about $900 per student across the state. Every $1 billion withheld equates to about 9,500 educators who could lose their jobs, according to Doug Knepp, president of the West Sacramento Teachers Association.

“We take the position that a dollar deferred is a dollar denied, and IOU is not a guarantee,” Flint said. “The Prop. 98 monies are intended for the current budget year, which is being developed, not for an indeterminate date in the future.”

In March, San Francisco Unified School District board leadership sent a letter to Newsom, urging him to restore the Proposition 98 funding. That letter was signed by other district leaders across the Bay Area and state, who said the withholding “represents tens of millions of dollars from each of our districts and will directly harm our schools and the students they serve as soon as next school year.”

On Thursday, district officials from Oakland are also expected to join a statewide lobbying day hosted by the California Teachers Association in favor of restoring Proposition 98 funding.

As education officials push for Newsom to release the funding in his final budget proposal ahead of the July 1 deadline, Snider and Flint both said, to some extent, the “damage” has already been done.

“We’re already seeing school districts have had to develop their budget on the assumption that the withholding will go through,” Flint said. “No matter how this resolves, it’s already had a negative impact as school districts have to reduce staffing support and services.”

Still, the advocates said it’s not too late to stop the withholding from becoming a precedent. Last year, the state withheld $1.9 billion from schools, which will be repaid in this year’s budget, under similar circumstances.

“Precedent is an issue,” Snider said. “Because the effect is that it effectively neuters Prop. 98 from its intent, which is to protect the school portions of the budget from the non-education side pressures.

“What’s being proposed by the governor is sort of a clever workaround to that. And if the education community doesn’t speak up and push back, they’ll just keep doing it,” he continued.

Currently, CSBA is suing the state over funds withheld last year, and Flint said if this year’s delay is approved in the final state budget, the organization is very likely to litigate again.