Justices Deny Stay but Will Rule on Richmond School Loan

The California Supreme Court on Wednesday agreed to decide the validity of a precedent-setting ruling by a Contra Costa County judge that forced a $19-million state loan to keep open the bankrupt Richmond Unified School District.

The justices, however, rejected a request sought by Gov. Pete Wilson for an emergency stay blocking the loan that would have required an immediate closure of district schools and an abrupt end to classes for 31,300 students.

The Supreme Court’s action, issued in an order signed by Chief Justice Malcolm M. Lucas and all six other court members, enables the schools to remain open for the rest of the term. A decision by the high court on Wilson’s appeal of the judge’s ruling will be rendered later this year.

State Assistant Atty. Gen. Charlton G. Holland, who represents the Wilson Administration in the case, said the state would go no further in trying to block implementation of the loan--but he welcomed the high court’s agreement to decide the important issues in the dispute.

“This is a difficult and complex case and we’re gratified that the justices are going to hear it,” said Holland. “The court will be able to give guidance to the public and the Legislature on just what kind of school system we’re going to have in this state.”

State Controller Gray Davis called the high court’s rejection of Wilson’s attempt to block the loan “a great victory.” Davis, who along with state schools Supt. Bill Honig had supported a group of parents who brought suit to keep the schools open, said: “While the governor is within his rights to appeal, the court obviously felt the education of children was too important to be disrupted.”

The financially beleaguered district was scheduled to shut down its 55 schools last week, six weeks before the end of the school year, because of a lack of funds.

But in the first ruling of its kind, Contra Costa County Superior Court Judge Ellen James held that when a school district cannot provide public education, it becomes the state’s duty to “remedy the situation.” The judge ordered state officials, “by whatever means they deem appropriate,” to assure that there were classes for Richmond students through the end of the regular school year June 14.

Honig and Davis, both Democrats, said they would comply with the order by arranging a $19-million loan of state funds to the district. Republican Wilson chose to appeal on behalf of the state, and asked the high court Monday to block the loan immediately.

The decision would set a dangerous precedent, guaranteeing state funds for local districts victimized by their own fiscal mismanagement, the governor contended in a brief prepared by Holland. Honig and Davis lacked statutory authority to take over the funding and operation of the district, the governor said.

The brief emphasized the broad importance of the legal issues in the case. A high court decision in the case, it said, “will set the course for public school financing for years.”