California’s largest educators union has taken legal action against state officials, alleging that the state government has deprived public school districts of billions of dollars in constitutionally mandated education funding over the past two fiscal cycles. The lawsuit contends that state leaders improperly withheld critical money to help balance statewide deficits.
The legal complaint was formally lodged in Sacramento County Superior Court by the California Teachers Association, which represents roughly 310,000 classroom teachers, counselors, librarians, and other school staff members statewide. The action names California Department of Finance Director Joe Stephenshaw alongside several unnamed officials, directly targeting budget decisions overseen by Gov. Gavin Newsom.
According to the union, state leaders violated long-standing constitutional safeguards approved by voters under Proposition 98 in November 1988. That voter-approved amendment established strict minimum guarantees requiring designated percentages of the state’s general fund to be directly allocated to K-12 public schools and community colleges.
The lawsuit asserts that facing substantial state budget shortfalls, the Newsom administration and state lawmakers deliberately underfunded the public education system by $1.9 billion during the 2024-25 fiscal year and by an additional $3.9 billion in the 2025-26 budget plan.
While the state ultimately repaid the $1.9 billion deficit from the 2024-25 budget year twelve months later, the CTA argues that no equivalent commitment or repayment timetable has been established for the missing $3.9 billion in the 2025-26 fiscal cycle. The disputed $3.9 billion is part of an overall statewide education budget totaling $119.9 billion.
The union emphasized that the unresolved $3.9 billion shortfall represents a substantial blow to local district operations across California, translating directly to an estimated loss of $638 for every individual student enrolled in the state's public school system.
The CTA highlighted that these budgetary reductions have already exacted a severe toll on personnel and academic programs. According to figures cited in the complaint, nearly 1,000 school employees across California lost their jobs to layoffs over the preceding year as local school districts struggled to absorb fiscal constraints.
CTA President David Goldberg strongly criticized state leadership for imposing reductions on public education while asserting that California continues to maintain a strong wider economy. Goldberg argued that the funding decisions have destabilized school districts and forced unwarranted job losses among education professionals.
"Our economy is booming, yet we just crushed the careers of public school teachers and disrupted communities up and down the state," Goldberg said in a statement accompanying the legal filing. He maintained that the state must immediately rectify the situation to protect school staff from additional rounds of staff terminations and service reductions.
The lawsuit underscores the specific legal mechanisms established by Proposition 98, which was narrowly adopted by 51% of California voters in 1988. Under the state constitution, the Legislature does possess the authority to temporarily suspend minimum funding obligations for a single year through a two-thirds supermajority vote, but lawmakers are constitutionally obligated to restore and repay any withheld amounts in subsequent cycles.
The union's Sacramento-based attorney, Benjamin Gevercer, argued in court documents that state officials have bypassed these obligations by failing to establish any clear path to return the money. Gevercer stated in the filing that it remains highly doubtful when or if the $3.9 billion owed to local schools will ever be reimbursed without judicial intervention.
The legal action asks the Sacramento County Superior Court to issue a formal order determining that the state's actions breach Proposition 98. The union is seeking a binding decree that compels the state to provide full, restored funding to public school systems for both the current fiscal year and upcoming budget cycles.
Alongside the litigation, Goldberg tied the fight over school resources to the upcoming statewide election, urging Californians to support Proposition 3 on the November ballot. The proposed ballot measure seeks to secure long-term revenue streams for the state's educational institutions.
Proposition 3 would permanently extend an existing state tax levy on high-income earners that voters originally enacted in 2012 and reaffirmed in 2016. The high-earner tax provision is currently scheduled to expire in 2031 and generates nearly $15 billion per year earmarked specifically for public schools and community colleges.
Following the filing of the lawsuit, the governor's office did not immediately provide a statement regarding the allegations. Meanwhile, the office representing State Superintendent of Public Instruction Tony Thurmond declined to comment on the pending litigation.
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