(The Center Square) – Gov. Gavin Newsom has signed legislation giving California school districts greater flexibility in how they spend voter-approved arts and music education funding, though the measure arrives against a backdrop of a high-stakes legal battle in Los Angeles over how the money is being used.
Authored by Assemblymember Al Muratsuchi, D-Torrance, Assembly Bill 2440 updates California's Proposition 28, which provides roughly $1 billion annually statewide. The new law expands allowable uses of funding to include curriculum, materials and professional development. Newsom signed the bill on Sunday in addition to many other measures.
The legislation introduces funding flexibility by allowing smaller schools to pool their resources to hire arts teachers, while ensuring site expenditures remain proportional. It also establishes a formula to guarantee that new funds supplement rather than replace existing spending. Meanwhile, the legislation streamlines compliance by updating annual reporting and internet posting deadlines to Sept. 30, simplifying financial audits and refining staff hiring certification rules for larger districts.
All provisions are scheduled for full implementation at every school starting with the 2027–28 fiscal year.
Proposition 28 author Austin Beutner, alongside Los Angeles Unified School District families represented by attorneys at the Kendall Brill Kelly law firm, filed a lawsuit in 2025 in Los Angeles County Superior Court against the district and then-Superintendent Alberto M. Carvalho. The complaint alleges that LAUSD misused $76.7 million in Prop 28 funds.
“Art and music education is essential for our kids to develop the skills they need in the classroom, in their careers, and throughout their lives,” said the plaintiffs in a joint statement provided by the law firm in its 2025 press release.
LAUSD did not respond Monday to The Center Square’s request for comment.
Corbin Farias, communications specialist for Newsom, told The Center Square, “The governor’s signature speaks for itself.”
Lance Izumi of Pacific Research Institute said it is disturbing that the original language of AB 2440 would have allowed school districts to use Prop. 28 dollars merely to replace existing arts funding, thus supplanting rather than supplementing and increasing funding for the arts in schools.
“The fact that the original bill was supported by powerful groups such as the California Teachers Association, with no organized opposition, despite the clear intent of voters in supporting Prop. 28, reveals one of the troubling realities of policymaking in Sacramento,” Izumi told The Center Square Monday. “Laws are created in darkness, with key input by special interests, while the general public has no idea that its will is being subverted.”
Izumi credits Beutner, a businessman who served as the LAUSD superintendent from 2018 to 2021, with single-handedly championing the public’s interest and forcing a compromise to protect voter intent.
Izumi said LAUSD's alleged misuse of Prop. 28 dollars to supplant existing arts funding rather than supplement that funding is “part of a pattern of fiscal mismanagement” by the district.
“Indeed, supplanting existing arts funding has allowed the district to move around existing arts funding to other purposes, which the district no doubt desperately wanted to do given that it faces massive structural deficits in the coming years,” said Izumi. “Also, LAUSD has approved employee collective bargaining contracts that it clearly cannot afford, increased staffing, especially support staff such as social workers, despite plunging enrollment, and expanded services such as mental health while huge numbers of students failed to gain proficiency in reading and math.”
Izumi added that LAUSD is a “fiscal Titanic, and its arts funding shell game just moves around the deck chairs on its sinking budget."
