Settlement returns billions to California schools funding

May 16, 2006

The state's teachers and schools chief Jack O'Connell have settled their lawsuit against Gov. Arnold Schwarzenegger and, as a result, billions of dollars in school funding O’Connell and the teachers claimed the governor misappropriated during the state’s fiscal crisis will be returned to the schools.

"The restoration of funding to California school districts is very positive news,” New Haven schools Superintendent Pat Jaurequi told the James Logan Courier.

"This is a day for celebration in schools throughout California. When this lawsuit was filed, I promised that I would fight up and down the state until the funding owed to our schools was restored," O'Connell, the state superintendent of Public Instruction, said in a statement last week. "I also promised I would give the Governor credit for doing the right thing if he restored this critical funding. Today, I want to thank Governor Schwarzenegger for working with the education community to invest wisely in our schools — the best investment we can make in California’s future."

"This is a good thing for our schools and community colleges throughout California," said Barbara E. Kerr, president of the California Teachers Association, one of the parties to the lawsuit. “Having all the money owed to our schools under Proposition 98 and the governor’s agreement of 2004 restored to our students is the news we’ve been waiting for.

In a statement regarding the settlement, Schwarzenegger said, "I am pleased to announce a resolution that will put the dispute regarding Proposition 98 funding behind us and allow us to invest an additional $3 billion in schools in a way that best helps our students.”

Proposition 98 is an amendment to the state Constitution, passed in 1988, that established a minimum funding level or guarantee for K-12 education and community colleges. O’Connell and the California Teachers Association sued Schwarzenegger and the director for the California Department of Finance last summer after when they diverted billions of dollars earmarked for the schools under Prop. 98 to overcome budget deficits that were crippling California, violating an agreement made with educators the previous year.

The agreement restores funding Proposition 98 funding that was due, but not provided in the 2004-05 and 2005-06 fiscal years. The Governor’s May Budget Revision will include $2 billion and language that provides an additional $3 billion to be paid in installments between fiscal year 2006-07 and fiscal year 2013-14, or until paid in full.

In addition to the settlement funds, Schwarzenegger’s “May Budget Revision,” announced last week, also directs billions more of the state’s money to schools. Schwarzenegger said bulging state coffers, filled by unexpected tax revenues, allowed him to budget an extra 8.1 billion for schools, for a total of $55.1 billion-an over 17% overall funding increase from 2004-2005.

The settlement and the new budget figures “will allow us to make good on the debts to schools created through the recent lean years and to make important new investments in public education,” said O’Connell.

Schwarzenegger had some ideas about how the money should be spent. "For K-12 schools, I propose that we concentrate these funds to improve instruction in schools with low academic achievement. We should direct the funds to the classroom level for such things as lowering class size, attracting and supporting quality school leadership and fully credentialed and experienced teachers, supporting greater involvement of parents, providing more counselors in high schools, and increasing quality professional development, instructional materials, improved instruction and accountability.” he said.

Although pleased by the outcome of the lawsuit, Jaurequi was cautious about predicting its effect in New Haven “ It is significant to note that two-thirds of the new funding is one-time in nature and is not an ongoing revenue stream,” she said.

"Although the budget process is far from over and we will likely differ on some of his budget priorities, I am happy to thank Governor Schwarzenegger for working with the education community to invest in public education,” said O’Connell, who’s been embroiled in controversy and litigation over the California High School Exit Exam in recent weeks.

"I am particularly pleased to see that the Governor has increased funding to expand remediation programs for students who are struggling to pass the California High School Exit Exam, and to pay for new summer and evening administrations of the Exam,” said O’Connell, who wrote the law requiring the exam when he was a state legislator in 1998, “ I also applaud the increase in funding to expand and improve student nutrition programs giving more students the opportunity to make healthier food choices on campus. In addition, I am very happy to see additional funding for high school counselors. Our state currently has the lowest ratio of counselors to students in the nation. This is a statistic we need to improve upon".