The $1.84 Billion Deal

It wasn’t always the way it is today. Once there was a time when money was actually available for public education. The following story is real California history about that time.

In 2001 California had a budget surplus of $34 billion. Though a state, California had then the fifth largest economy in the world, even ranking ahead of France. But California public schools did not reflect this wealth. Of the six million K-12 students, nearly 40% lived below the poverty line, and the state ranked 37th in class size and 40th in per-pupil funding, a marked decline in quality from the l960’s, when the state’s schools were considered among the best in the nation. The decline had started under Ronald Reagan, who began a program of cutting both taxes and public service programs. School funding had been one of Reagan’s main targets, and by 2000 our schools were in bad shape, the heritage Reagan left.

But a $34 billion surplus! The California Teachers Association with its 330,000 members felt it was the time for the state to give our schools a funding increase.

In October 2000, as president of the California Teachers Association, I proposed a $2 billion addition to the state education budget. The media picked up the story and it was reported in the Los Angeles Times, the San Francisco Chronicle, and just about every radio and TV station in California. I did many interviews on the subject from San Diego to Redding. Hostility from many of the interviewers actually fired the debate as teacher leaders around the state spoke up for more school money to the public and the local media as well as to teachers.

In his budget California Governor Gray Davis had proposed a $500 million increase in school funding. CTA’s counter proposal of $2 billion set off a prolonged public debate, and negotiations between CTA, the legislature, and the governor began almost immediately. CTA’s governmental relations staff in Sacramento negotiated with legislators for support of the $2 billion proposal. Because the media tracked the issue, the governor began to understand that the public knew the schools were under-funded and agreed with the proposal to give extra money for them.

Unwilling to accept the $2 billion figure, the governor nevertheless raised his offer through the fall and spring from $500 million up to about $700 million. Meanwhile preliminary numbers showed that California tax revenues were going to be substantial, and that good news in January 2001 helped us in CTA to realize that a larger addition for education was really possible. Carolyn Doggett, CTA’s executive director, and a strong and talented CTA staff began to organize a rally at the sate capital for May. The prospect of sufficient funding had roused the educational community, and a rally could bring thousands of teachers to Sacramento.

John Hein, CTA director of governmental relations and one of the best political minds in California, directed the lobbying of the legislature. Two people vital to our effort were Bob Hertzberg, Speaker of the California State Assembly, and John Burton, President Pro Tem of the California State Senate. Hertzberg, a Democrat, was a conservative with a social conscience, so we were confident he would deliver the votes in the Assembly. We were right in our assessment, and in January Hertzberg announced that he favored adding a billion dollars to the guaranteed funding for education. John Burton, with an unmatched concern for his fellow human beings, was very supportive. I personally had great admiration for him then and have more for him today. Burton and Hein did the majority of the Sacramento negotiations, while I as CTA president did the public negotiations with the governor in my speeches and interviews with the media.

As spring progressed, the public negotiations continued. CTA maintained our $2 billion and Governor Davis kept raising his offer. He was reading the polls and though he did not like holding a losing hand, he was not about to make a political blunder, so in late spring his offer reached $1 billion. I kept saying no. Many considered my stand risky, but I wanted that $2 billion for public schools. The state had been shortchanging kids and teachers for years, and now was the time to do something positive for public education.

Few of us realized it at the time, but a perfect storm was forming to aid our battle for increased school funding. The money was there and everyone knew the schools needed it. Teachers knew this was not a CTA publicity campaign but an attainable goal. And the CTA staff was doing an ongoing, efficient job of organizing thousands of teachers to go to Sacramento in visible support of more money for schools.

Once the May 8 rally was announced, the negotiations going on behind closed doors in Sacramento, while the governor and I negotiated in the media, really heated up. This debate was hot material for editorials in California’s newspapers, most of which came out against CTA’s “money grab”. At the same time CTA had started a petition drive to qualify an initiative that would require California to fund its public schools at the national average (California ranked 40th out of the 50 states in per-pupil funding), and CTA would be able to secure enough signatures to qualify the initiative for the California ballot. That prospect was so unpopular with the Democratic legislators that they preferred to give schools a large funding increase rather than have it on the ballot.

Through February and March we continued to negotiate with the governor. Our position was always the same: more money, and the funding must be ongoing with no restrictions on spending. No restrictions meant state or local districts could not designate the money for programs only and exclude teacher salaries.

The May 8 rally was to be a major show of strength, that month chosen because it was the time the state budget was revised and most budget items finalized. On May 7 as my wife and I drove to Sacramento from Los Angeles, the governor and I talked on the phone three times. The first call was general conversation. On the second call he offered $1.2 billion above the 40% of the state budget guaranteed to education, but he demanded that we not submit our initiative and call off the rally. I told him we could not do that. On the third call, he increased his offer to $1.5 billion if we would rethink the initiative and turn the rally into an anti-voucher event. Again I told him we could not do that.

The May 8 rally was a huge success, an incredible experience where 10,000 teachers and students showed up on the west lawn of the Capitol in the largest rally in Sacramento since the Vietnam War, sending shock waves through the Capital. At the rally Speaker Hertzberg sent me a note asking if I would meet with him and the governor that evening. At 7 pm, John Hein and I met with Governor Davis; Sue Burr, the governor’s education advisor; Lynn Schenk, the governor’s chief of staff; Rick Simpson, Hertzberg’s policy director; and Tim Gage from the Department of Finance in the governor’s office. The governor offered $1.7 billion and again asked that we withdraw our initiative proposal. We asked what guarantees would we have on his proposal, and he said, “our word.” I did not take anyone’s word. I had negotiated for six years with the Los Angeles school district and I learned that if it was not in writing, it was not a deal.

The CTA Board of Directors met that night, only one day before the deadline to submit the qualifying signatures for the initiative. Lynn Schenk called me that evening and asked us to delay submission for 24 hours, and then she asked, “What do you want?” At that point I knew that we were close to the $2 billion deal that we had been fighting for. We told her we would hold the signatures until the next afternoon, but we wanted a written guarantee, not a verbal promise. Later that evening, Senator Burton called and asked if he could meet with me and Hertzberg the next morning. At that meeting, Hertzberg and Burton offered $1.84 billion, making it clear that was as high as they would go. If I agreed, the Department of Finance would write a letter guaranteeing the money would be added to the budget. I agreed. That afternoon Davis, Burton, and Hertzberg held a press conference to announce the deal. (I was not invited to participate in the announcement.)

The $1.84 billion was the largest increase in school funding in California history, a deal that gave school 18 times more money for 2000-2001 than we had received in the 1999-2000 school year. The money was ongoing and unrestricted, which meant extra money for schools in the years to come. That afternoon we pulled our initiative as agreed. This was the first time in my memory that California public schools had received funding that was anywhere near adequate to meet the needs of its millions of students and teachers. We had succeeded: students in classrooms across the state benefited and some teachers even received a 10% pay raise for the first time in their careers.

Wayne Johnson
President of the California Teachers Association
1999-2003