California on the Hook for $1 Billion, 20 Years Later

California’s budget problems in the recession have been legendary, and now a state commission has ruled that it’s time to pay the piper, according to John Fensterwald of EdSource. While the state claims that its increased demands on schools to comply with IEPs were not “mandates,” the Commission on State Mandates disagrees. On January 29 it ruled that the state must pay districts for costs reaching back to the 1990s.

California school budgets have been in trouble for years. Voters were presented with several ballot initiatives to increase taxes for school funding. Proposition 30 passed in November, but districts are still hurting.

By contrast, the state is at last reporting that tax increases and spending cuts have brought its finances back to health. 2013 is the first time that January hasn’t brought a fiscal crisis since the recession began.

So it stands to reason that districts particularly hard hit by unfunded mandates would turn to mediation to make up some of the deficit. Two counties, Butte and San Joaquin, and a city, San Diego, were the claimants in the challenge. They said that they had not been able to cover the costs of directives for how to manage students with behavioral problems. EdSource reports:

The unreimbursed expenses are for intervention plans for special education students identified with behavior problems. In the early 1990s the State Board of Education, under orders from the Legislature, prescribed interventions that teachers should incorporate into individual education plans, known as IEPs, according to Paul Golaszewski, an analyst with the Legislative Analyst’s Office who has followed the case.

A key point in the Commission’s ruling is that districts will not need to comb through two decades of records and total up their actual costs related to behavior plans. Instead, the School Board Association has worked out a formula that dictates what the state must reimburse.

Rather than having to go back and document two decades of actual costs, the districts will receive a flat $10.64 per year per student based on their Average Daily Attendance for 19 years or between $50 million and $65 million per year, according to the school boards association. Attorneys for the school boards association are still fighting over how the money will be reimbursed from here on out.

The School Board Association called the ruling a victory for public education.

Unfunded mandates have taken their toll on the state’s public education system. The commission’s decision affirms the need for the state to adequately reimburse (districts) for mandates.

Governor Jerry Brown refers to money owed to the state’s school districts as a “wall of debt.” He has proposed that the Legislature change the requirements for managing behavior-challenged students so as to make it less expensive. But the $200 million for school reimbursement that is included in the 2013 budget isn’t just for special education. Unfunded science requirements for high school graduation is another matter that is under litigation. Brown estimates that another $100 million will have to be added to settle the matter finally.

The payout money will mostly come from funds set aside by 1988′s ballot initiative, Proposition 98. This law requires that 40% of the state’s general budget must be spent on K-14 education.