Schools Say California Owes Them $3.6 Billion

OAKLAND, Calif. (CN) - California has dumped billions of dollars of expenses on local school districts, the California School Boards Association says. The state constitution was amended in 1979 to "prevent the state from forcing programs on local governments, including school districts, without paying for them." But California has been "deferring" reimbursements for years, budgeting only $1,000 per mandate while "carrying the remainder of the reimbursement obligation as 'debt' owed to local governments, including school districts," according to the complaint in Alameda County Court.

The extent of the budgetary dishonesty is exposed in a 2010 report from the Legislative Analyst Office, which "estimated the annual cost of education mandates to be $416 million," yet "only $41,000 was appropriated for mandate reimbursement during the 2009-10 fiscal year," the complaint states.

The school boards say the state's funding "scheme" is an "administrative and bureaucratic nightmare," that has resulted in a "backlog of unreimbursed mandate claims from school districts," that now stands at $3.6 billion.

The School Boards Association, through its Education Legal Alliance, sued California, the Commission on State Mandates, state Controller John Chiang and state Finance Director Ana Mantosantos.

The school boards cite a 1979 amendment to the California Constitution, ostensibly enacted to "prevent the state from forcing programs on local governments, including school districts, without paying for them." The implementation of the amendment meant that the commission would have to approve reimbursement for a mandated program, or give the local agency "an opportunity to be relieved of the underlying legal obligation to provide the program or service," according to the complaint.

But in 2002, California began "deferring" reimbursement for mandated programs, budgeting for only $1,000 per mandate while "carrying the remainder of the reimbursement obligation as 'debt' owed to local governments, including school districts," the complaint states.

The Legislative Analyst's Office likens it to "credit card debt," since the state was "borrowing money from the school districts without providing any fixed repayment schedule," the board says.

In February 2010, the Legislative Analyst Office "estimated the annual cost of education mandates to be $416 million," yet "only $41,000 was appropriated for mandate reimbursement during the 2009-10 fiscal year," the complaint states.

It says the "backlog of unreimbursed mandate claims from school districts has grown from $2.8 billion in 2007-08 to $3.6 billion in 2009-10 with no plan for reimbursement."

The school boards say that school districts are in a constant battle, seeking approval for claims, suing the state for relief from mandatory obligations, and pursuing "incorrect reduction claims" - many of which have been pending for years.

The "elaborate mandate reimbursement process" alone cost $17 million statewide in 2009, and the state has given no funding to school districts for their participation, the boards say.

The school boards say that rather than eliminating a mandate if it will not be approved for funding, the state circumvents its obligation to reimburse school districts and county offices of education.

"The state's most recent efforts to eliminate their obligation for reimbursement represents yet another bureaucratic Catch-22 for school districts, i.e., the prospect of endless 'new test claim' proceedings based on 'changes in the law' when the only 'changes' are the self-serving pronouncements of the state," the complaint says. It continues: "Districts will be forced to spend financial resources to defend mandate determination that are not even being paid, and yet are now being 'redetermined.'"

The school boards seek writ of mandate, citing violations of the California Constitution.

Lead counsel is Deborah Caplan with Olson Hagel & Fishburn in Sacramento.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit