AFT Guild

CFT Sues Arnold Over Prop. 98 Money

Capitol Alert

The latest on California politics and government

May 7, 2009

California Federation of Teachers sues state for $12 billion
The California Federation of Teachers filed a lawsuit today against Gov. Arnold Schwarzenegger and other state officials to recoup $12 billion in education funds it says the state owes schools.

The suit in San Francisco Superior Court comes as CFT campaigns against Proposition 1A, a spending limit and temporary tax hike on the May 19 ballot. That proposal, in conjunction with Proposition 1B, would help provide schools $9.3 billion of the $12 billion that CFT is demanding.

But CFT opposes Proposition 1A because it believes the measure would limit long-term funding for schools. The lawsuit is partly a political attempt to undercut the argument for Proposition 1A by saying the measure is unnecessary because schools can recover the money in the courts.

"Proposition 1B is going to fail, and besides that, we still have to worry about funding for 2009-10," said Marty Hittelman, CFT president. "We need to do this right away so we can take care of 2009-10, since they're already debating that. We want to make sure they understand they have to repay us."

After revenues sharply declined, the state cut 2008-09 school funding by $7.9 billion, and Gov. Arnold Schwarzenegger believed the state did not legally owe that money back to education. School groups disagreed and threatened to sue the state before Schwarzenegger and lawmakers put Propositions 1A and 1B on the ballot to repay that money, plus another $1.3 billion owed from 2007-08.

CFT also wants the courts to resolve for good whether the state owes schools money in similar budget situations in the future.

"The governor has consistently increased funding for education every year he has been in office, but with less revenues into the state, everyone has to cut back," said Schwarzenegger spokesman Aaron McLear. "If the ballot measures are defeated, the education community unfortunately will see further cuts."

The well-financed California Teachers Association has raised millions of dollars to help pass Propositions 1A and 1B, and the group prefers using the ballot to obtain $9.3 billion rather than going to court, where the outcome is unclear and could take years to resolve.

"We're the ones who brought it to the attention of the governor and told the governor unless the money would be paid back we would sue," said CTA President David Sanchez. "For CFT to jump at it like this before the initiatives fail or pass, I'm disappointed. ... Under 1A and 1B, there's a set plan for how to pay back schools, there's a timetable, a funding mechanism. This lawsuit is premature."

CFT maintains that the state legally owes schools $9.3 billion in funds from this year and last, and that the courts remain the best venue to recoup that money. CFT, in its suit filed with Service Employees International Union Local 99, also asserts that the state owes schools an additional $2.6 billion for 2009-10 based on the current budget agreement.

Hittelman said he believes schools would be repaid sooner under a court settlement than under Proposition 1B, possibly by 2010-11 rather than 2011-12. Repayment under a court settlement would depend upon when revenues begin to rebound, whereas Proposition 1B guarantees repayment starting in 2011-12.

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