The department has been criticized for its negotiation of a $60 million contract ruled illegal by a district court earlier this year.
The Joint Finance Appropriations Committee voted unanimously March 12 to deny the department its requested $7.7 million for the public schools broadband program.
Instead, the panel gave the broadband funding to Superintendent of Public Instruction Sherri Ybarra’s office.
School districts were forced to negotiate their own broadband contracts in February after a judge voided the contract, forcing the statewide program to dissolve.
Co-chairman Sen. Dean Cameron says the funding shift applies only to the next fiscal year and is not a permanent move.