The third attempt: Bonta sues again over vanishing school mental health funds

California Affairs | The Navarro Report | July 13, 2026

OAKLAND — California Attorney General Rob Bonta filed a new lawsuit this month challenging what his office calls the Trump administration’s third attempt to strip federal mental health funding from schools, in a legal fight that has now stretched across two federal court rulings and more than a year of litigation.

The suit, filed in the U.S. District Court for the Western District of Washington as part of a coalition of 15 state attorneys general, targets the U.S. Department of Education’s latest move to end the Mental Health Service Professional Demonstration Grant Program and the School-Based Mental Health Services Grant Program. Congress created both programs after the school shootings in Parkland, Florida, and Uvalde, Texas, specifically to help schools recruit and train counselors, psychologists and social workers in high-need districts.

The Department first tried to discontinue the grants in April 2025, and a federal court found that discontinuation illegal in December 2025, ordering the Department to reconsider under lawful procedures. Rather than comply in full, the Department now seeks to terminate the same funding under a different regulatory mechanism entirely. “By calling this a termination rather than a discontinuation, the Administration seeks to circumvent the court’s order,” Bonta’s office said in its filing, arguing the maneuver is designed to sidestep a standing judicial order rather than address any legitimate performance concern.

“The Trump Administration is once again trying to take critical mental health funding away from the schools that need it most,” Bonta said in a statement announcing the suit. The two grant programs awarded more than $250 million combined in 2025 alone, with roughly $200 million of that flowing to California local education agencies, county offices of education and universities.

For anyone who has managed a nonprofit or public agency through a federal grant transition, the pattern in this case will look familiar. Grant funding rarely disappears with a clean, single decision; it erodes through a sequence of technical redefinitions, recharacterizations and partial-year awards that each individually sound survivable but cumulatively starve an organization’s ability to plan. In March, for example, the Department shifted from cutting off the mental health grants outright to awarding only six months of funding instead of the standard full year, a move the coalition argues violates the December court order because it forces grantees to plan and staff as if the money could vanish mid-year.

That kind of funding uncertainty is not an abstraction for California’s nonprofit sector, and it is a dynamic I saw directly during my time as Financial Controller at the San Diego Center for the Blind, where I managed federal and state grant compliance for programs serving blind and low-vision residents. Grant-funded organizations build annual budgets, staffing plans and board financial packages around the assumption that awarded funds will actually arrive on the timeline the grant agreement specifies. When a funder — federal or state — recharacterizes an active award mid-cycle, the organization is left absorbing the gap: delaying hires, drawing down reserves, or in the worst cases, laying off the very staff the grant was funded to employ. School districts facing six months of funding instead of twelve are living a version of the same problem nonprofits have faced for years whenever DOR, HUD or HHS funding streams get renegotiated after the fiscal year has already started.

The stakes Bonta’s office cites are concrete: without a full year of committed funding, school districts risk losing counselors and social workers they hired specifically because these grants existed, then face rehiring and retraining costs if the money is restored later. That whiplash — hire, layoff, rehire — is precisely the kind of structural inefficiency that grant compliance officers spend their careers trying to prevent, and it falls hardest on the low-income and rural schools these programs were designed to prioritize in the first place.

The legal theory underlying the new suit largely mirrors the one that succeeded in December: that ending Congressionally-appropriated grants through a boilerplate notice, without citing grantee performance, violates the Administrative Procedure Act and oversteps the Constitution’s Spending Clause protections for how appropriated funds must be administered. The coalition has also asked the court for a preliminary injunction to keep the funding flowing while the case proceeds, rather than waiting for a final ruling that could come long after the fall semester has already begun.

Whether this round of litigation ends the cycle or simply produces a fourth attempt at termination is, at this point, an open question. What is not in question is the operational cost of the uncertainty itself: every month spent in court is a month school business offices and nonprofit finance departments alike must spend hedging against money that may or may not show up as promised.

This article was produced through Human-Directed AI Journalism: reporting, editorial judgment, sourcing, and final review by Jose Navarro, with AI assistance used for drafting and research synthesis.

Jose Navarro is the founder of The Navarro Report. Contact: jose@navarro-report.com | LinkedIn: linkedin.com/in/Jose-E-Navarro-MBA