A new University of California, Los Angeles, study found 38 percent of teens enrolled in a public school - that's 1.3 million - do not participate in any school-based gym class.
More alarming, almost all 12 year olds participate in gym classes, but by the time they are 17 years old, less than a quarter do.
The report also found more than 80 percent of all California teens fail to meet the current federal recommendation for physical activity.
While high schools students can exempt out of gym class for certain reasons, researchers largely blame the state budget cuts for the lack of school-based exercise programs, despite numerous studies that show physical education helps boost academic performance.
"In difficult financial times, these are decisions that are being made both at the state and local level that are counter-intuitive," said Kevin Gordon, a public school lobbyist. "They don't make sense. But when you don't have money, people start doing things that don't make sense."
Doctors worry about the consequences of cutting gym class out of academics. Dr. Richard Pan, a pediatrician who is also a state assemblyman from Natomas, sees his patients getting heavier and heavier.
"With the obesity epidemic that's happening, we need to be sure that our kids have good health habits and part of that is physical activity," Pan said.
If the state's expiring tax hikes don't get extended for a longer period of time, schools could see billions more in cuts.