Prop. 98 lawsuit ruling pending; next move assessed

ACSA is strategizing on actions moving forward, following a March 28 San Francisco Superior Court ruling that tentatively rejected a lawsuit to protect the integrity of Proposition 98.

ACSA and the California School Boards Association led the suit filed in September, alleging the 2011-12 state budget illegally excluded sales tax revenue from the Prop. 98 guarantee.

Schools say they are owed $2.1 billion under the voter-approved guarantee that the state must spend a specific percentage of general fund money on schools.

“We’re disappointed in the ruling, and we think the judge has made a mistake,” said ACSA Executive Director Bob Wells. “If he’s right, and the state can put money aside in pots outside of Prop. 98, then the voters were hoodwinked.”

In his ruling, Judge Harold Kahn said: “Nothing in the language of Proposition 98 or its ballot materials precludes the Legislature from assigning revenue to a special fund that previously had been deposited in the general fund.”

ACSA argues that the 2011-12 budget artificially reduced the Prop. 98 funding guarantee by directing the money to counties. At issue is almost $6 billion in state program responsibilities shifted to counties for criminal justice, mental health and child welfare costs.

The programs originally were to be funded by passage of a sales tax measure the governor hoped to be put before voters last year. When the Legislature was unable to provide that ballot provision, the realignment became part of the budget.

“The actions taken in the 2011-12 budget bills are a direct attempt to evade the requirement to either provide the required funding or ‘suspend’ and assume the obligation to restore funding in accordance with the constitutional formula,” the schools argued in their petition.

Abe Hajela, a lead attorney on the lawsuit, told the Sacramento Bee immediately following the ruling that he hoped the judge could be turned around and that it was unclear whether the ruling was on the merits of the case or on procedural grounds.

“Clearly the conclusion (the judge) appears to be reaching in the tentative ruling is not one we’re happy with,” Hajela said.

“We knew whether we won or lost, we might have to file an appeal,” Wells added. “We’re working with our colleagues to plan a path for the future.”

Still pending in California courts is a suit arguing the Legislature has failed to provide schools adequate funds to cover the extensive educational standards all students are expected to achieve.

Public school advocates point out that during the past four years, public education has endured budget cuts of more than $20 billion.

The SI&A Cabinet Report contributed to this article. ACSA members may access the report’s free daily coverage of K-12 education at