The California Teachers Association, a union representing 310,000 teachers and other school district employees, has just filed a lawsuit accusing the state of illegally withholding $3.9 billion in funding that’s needed to prevent “devastating educator layoffs.”
Are you wondering how a union can sue the state for money to keep its members working?
“We believe in our legal standing,” CTA president David Goldberg said in a statement.
The argument is over the limits of the state’s power to defer education funding due under Proposition 98, the 1988 voter-approved initiative that requires about 40% of general fund revenue to go to TK-14 education.
Because the final figures for the previous fiscal year are not yet available when the budget is finalized, the Legislature and the governor estimate the Prop. 98 guarantee. If they estimate too low, they have to “settle-up” at some point in the future.
In the 2022-23 budget year, the Legislature’s estimate of the Prop. 98 revenues was too high, overshooting the mark by $8 billion. Gov. Gavin Newsom didn’t even try to get the money back, instead opting to borrow money from parts of the budget that fund other things, such as universities and Medi-Cal.
Now the administration says it’s a good idea to be fiscally prudent, withholding $3.9 billion after withholding (and repaying) $1.9 billion last year.
The state spends so much money on education that $3.9 billion amounts to only 3% of the Prop. 98 guarantee for 2026-27.
Still, the teachers’ union is not amused, and neither is the California School Boards Association, which is filing its own lawsuit over the withholding.
This story has its roots in the 1970s, when Californians revolted over a growing surplus in the state treasury while skyrocketing property taxes were forcing homeowners out of their homes. Angry voters passed two initiatives in two consecutive years. The first was Proposition 13 in 1978. It cut the property tax rate from a statewide average of 2.67% to 1%, capped the growth of assessed value at 2% per year until a change of ownership, and required all local taxes to go on the ballot for voter approval, with a two-thirds vote needed for special taxes. Proposition 13 passed with 64.8% of the vote.
The second initiative was Proposition 4 in 1979, known as the Gann Limit. Paul Gann’s measure sought to limit the growth of government spending by holding it to a baseline number adjusted annually for population growth and the cost of living. If the government took in more tax revenue than the Gann Limit allowed it to spend, the extra money would have to be given back to the taxpayers.
The Gann Limit passed with 74.3% approval. In 1986, the state government had to refund $1.1 billion.
The teachers’ union was horrified and put forward its own initiative, Proposition 98, a complicated minimum funding guarantee for education to prevent the Gann Limit from being reached again. Then in 1990 the Legislature put another Gann-fiddling measure on the ballot. Proposition 111 increased the gas tax and changed the factors that went into Gann Limit calculations in order to allow more spending.
Today, education in California is flooded with money, yet the unions say it’s never enough. One major reason for that also has its roots in the 1970s. In 1975, Gov. Jerry Brown signed the Educational Employment Relations Act, known as the Rodda Act. It gave public education employee unions full collective bargaining rights for the first time. Separate legislation did the same for state workers in 1978 and for higher education employees in 1979.
Year after year, the unions collected dues and spent money to elect politicians who were indebted to them for their careers.
That’s how we got where we are. Government employee unions bargain with government officials like a bank robber and a bank teller deciding how much of your account they’re going to take.
This year, the California Teachers Association is the sponsor of Proposition 3, which would renew the “temporary” income tax hikes for education that first passed in 2012 and were extended in 2016. Proposition 3 would make the money flow permanent.
The kids can’t do math, but the teachers’ union sure can.
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