State Panel Votes to Repay $1 Billion to Schools

After failed negotiations between California school districts and the Davis administration, a state commission voted Monday to begin reimbursing schools for about $1 billion in special education costs.

The money was spent by districts over the past 20 years to cover aspects of the program required by the state, ranging from smaller caseloads for speech therapists to a longer school year. The state has contended that budget appropriations have covered the costs.

In theory, Monday’s vote by the Commission on State Mandates means that school districts could begin filing reimbursement claims within two months. As the state’s largest district, Los Angeles Unified could expect to gain about 20% of the money or $200 million.

In reality, however, many unknowns remain: The Legislature and governor must approve any payments, and many involved expect the administration to protest Monday’s decision in court.

The commission inherited the issue in 1992 after an appeals court found the state liable for special education programs it had ordered districts to provide. On the eve of approving a reimbursement plan, the commission voted last fall to wait for Gov. Gray Davis to discuss the issue with school districts.

Although Davis agreed to allow talks with the districts, his negotiators consistently maintained that sufficient money for the disabled student programs already had been provided.

At the end of March, school representatives announced that talks had broken down over money--”There’s a significant gap from their zero to our tens of millions,” one said at the time.

State Treasurer Phil Angelides, who engineered those negotiations as a member of the state mandates commission, said he was disappointed they had not succeeded.

State Controller Kathleen Connell, the only commission member who opposed the negotiations, said they needlessly extended years of waiting for districts. “There were no negotiations,” Connell said. “They were going nowhere.”

Angelides said he holds out hope that the weight of the commission vote could tip the administration back toward the negotiating table.

“There is still time to resolve this,” he said.

An attorney representing the California School Boards Assn. said his group remains ready to discuss a settlement lower than the full $1 billion that he estimates the claims process will produce.

Speed and certainty, said attorney Richard Hamilton, would be worth something.

Initial indications from the administration were not encouraging, however. Reading a prepared statement, Department of Finance spokesman Sandy Harrison said:

“The administration’s view is that through the funding of a variety of programs over the years, including $2.4 billion in the coming year, the state has more than met its obligation to school districts for special education funding.”

As to whether the administration would return to the courts, Harrison said only that all options would be considered.

Under state law, when the government requires a local jurisdiction to do something, it must pay the costs of those activities. The special education dispute involves expansions required over the course of several years, such as a requirement that students be schooled through the age of 22 instead of 18 and another that extended the school year for special education students by 20 days.

During the mandates commission hearing, Deputy Atty. Gen. Daniel G. Stone sided with the administration’s position that the state had met its obligation through various general boosts in state education funding. It is the federal government, Stone said, that has fallen short in its support of special education.

Describing special education as a vast federal forest, Stone said, “the question today is whether the state provided enough water to keep the state trees alive. The evidence is undisputed . . . [there’s been] plenty of funding.”