Schools face uphill challenge over Prop. 98 child-care shuffle

One of the more controversial aspects of the education spending plan signed into law last week by Gov. Jerry Brown moved child care programs out from under the Proposition 98 umbrella as a means of lowering the school funding guarantee -– something education groups have suggested might not be legal.

While the question has drawn a mix of opinion from stakeholders, one of the state’s leading experts in school finance cast doubt on a potential court challenge – largely because the issue has already been heard.

“Child care was one of those wobblers because the court ruled that it was up to the Legislature’s discretion,” said John Mockler, longtime school consultant who was the principal architect and leading authority on Proposition 98.

“It’s not like any other program,” he said. “If you sued on this one, you would have a much lower chance (of winning).”

After Proposition 98 was passed by voters in 1988, lawmakers decided to insert child care into the minimum school funding guarantee –- a move that sparked litigation from the California Teachers Association. The courts sided with the Legislature, giving them deference on whether or not child care belonged in Proposition 98, Mockler explained.

The dispute has resurfaced more than two decades later, this time with education groups and the Legislature swapping sides.  

“It’s hard to get angry at the Legislature for doing what you sued them to do a long time ago,” said Mockler.

A closer look at the law suggests even more uncertainty. Both Mockler and the nonpartisan Legislative Analyst agree that the California Constitution is silent on whether Proposition 98 can be adjusted due to changes in state policy.

But Mockler explained that Proposition 98 needs to be viewed as a giant trust fund. And the specific programs funded in a given year have no effect on the size of that fund. “Once you create funding for schools and colleges, you don’t get to say this program doesn’t count – because it does,” he said.

Saddled with a $10 billion budget gap and a Republican minority that refused to consider tax extensions, the Brown administration had little choice but to look wherever it could to find savings.

By transferring child care outside of Proposition 98, the state saved about $100 million.

According to officials from the governor’s Department of Finance, child care costs are inflated when the item is inside the Proposition 98 umbrella because the funding formula contains locked-in spending obligations like work load level and cost of living increases. 

Officials note that child care has grown at a faster rate than other areas of Proposition 98 and thus crowded out funding for schools.

“The administration wanted to make sure to the greatest extent possible that we were protecting dollars going for classroom instruction,” said H.D. Palmer, a spokesman for Finance.

But education advocates are concerned that the shift will leave schools with less funding in future years. This is because Proposition 98 grows incrementally based on the level of funding from the prior year. If a spending area is removed, the base level goes down and schools get less the following year.

“The Legislature does not have the authority to violate the law because they think it makes good policy sense or helps them out of a budget problem,” said Rick Pratt, assistant executive director over governmental affairs at the California School Boards Association.

A CSBA letter to the governor and legislative leaders noted that former Gov. Arnold Schwarzenegger attempted a similar shift in 2007 with home to school transportation. But the Legislature killed that proposal amid opposition from education groups. 

The issue surrounding child care is just one of two major flashpoints for schools in the newly adopted budget.

Also at issue is language in the budget act that directs schools to plan their budgets around flat funding. But if revenues fall considerably under estimates, school budgets are automatically reduced by up to $1.5 billion statewide.

The change puts new bargaining power in the hands of unions by prohibiting teacher layoffs, even if the midyear cuts are triggered. School administrators have new authority to cut the school year, but teachers have to agree to lower their own pay. This obviously makes managers uneasy.

The CSBA is working with GOP lawmakers to repeal other aspects of AB 114. Assembly Republican Leader Connie Conway, R-Visalia, has expressed interest in new legislation, and the two sides are in correspondence.

But a Republican-sponsored bill to repeal a portion of the Democratic budget has virtually no chance of passage. Last week, Senate President Pro Tem Darrell Steinberg, D-Sacramento, defended AB 114, telling the Sacramento Bee that the teacher-protection provisions were “intentional.”

Nevertheless, Pratt said CSBA’s quest for a legislative fix is more than just a symbolic gesture.

“What other option do we have?” he asked rhetorically.

Ed’s Note: Cabinet Report is the only comprehensive news service covering K-12 education issues in California. To subscribe visit Registration required. Selected stories have been shared with Capitol Weekly with permission from School Innovations & Advocacy, owner and publisher. To contact reporter Allen Young:

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