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CEO’s note

by Vernon M. Billy
Unfunded mandates
The state’s “gift” that takes away from local educational agencies

n 1979, California voters passed Proposition 4, requiring the state to reimburse local governments for the cost of new programs and higher levels of service it imposes upon them. This state constitutional mandate, enshrined in Article XIII B, section 6, applies to all local governments such as school districts, cities and counties, with some exceptions, including when the state suspends a mandate.

California State Capitol Museum

The number of state reimbursable education mandates varies based on the number of new laws enacted that require a mandate. For simplicity, let’s say historically the number of reimbursable education mandates has hovered somewhere between 30 to 40, with the suspension of about a dozen additional K-12 mandates at times.

To be clear, this unfunded mandate problem is not limited to local educational agencies. In fact, about two decades ago, the League of California Cities and other local government organizations representing cities and counties drafted and successfully secured voter approval of Proposition 1A. This ballot initiative, among other things, attempted to limit the state’s excessive approach to imposing new mandates onto cities, counties and special districts without providing funding to implement them. The success of the initiative is debatable, but for a moment in time, their effort not only brought greater awareness to the serious impact of unfunded mandates on local governments, but it also had a chilling effect — albeit a brief one — in the halls of the state Capitol.

Sacramento policymakers have a history of believing they know what is best for local communities (insert deep sigh). Some critics of the Legislature argue they should rarely dictate to local governments how to govern their communities, while others view state intervention or direction on certain issues as critically important. The reality seems to be somewhere in the middle.

State elected officials have a constitutional right and obligation to promote policies they perceive as advancing the well-being of California schools and the state’s residents. In fact, some mandated policies can be warranted for important reasons, such as to preserve public safety. A challenge, however, occurs when the state mandates new, difficult-to-implement and costly requirements without providing sufficient funding to cover the actual costs associated with the mandate. Equally frustrating — and damaging to the state’s credibility — is when it creates unfunded mandates that are not only questionable based on policy reasons but also ignore real-world implementation challenges.

close up of a charging port with a plug connected on the side of a yellow school bus

Take for example, the state’s 2035 mandate that all new school buses purchased by LEAs are electric. This is one of those policy areas that may fall in the “somewhere in the middle” category. Sure, switching from diesel or natural gas school buses to electric buses will significantly reduce the amount of carbon emissions released into the environment. No argument there. However, this particular requirement has the potential to become a massively underfunded mandate. According to some superintendents from around the state, the full costs of this mandate include significantly higher purchase costs than estimated, including retrofitting bus yards with charging capabilities, maintenance costs and, perhaps, even special mechanics to service these buses.

From an implementation perspective, it simply does not match the reality on the ground for many communities that will be required to purchase electric buses, particularly our rural communities. There is currently a significant lack of infrastructure (charging stations) in some rural communities to support electric buses that may have to drive close to 100 miles one way up hills, through snow and with the heater running the entire time. But I digress.

While policy implementation issues are important, and often significant, the ongoing fiscal impact of unfunded mandates cannot be underestimated. The State Controller’s 2023 State-Mandated Program Cost Report of Unpaid Claims & Deficiencies assessed the amount of insufficient appropriations for education reimbursement claims filed for state-mandated programs at a whopping $840 million.

Over the years, the state has consistently maneuvered to avoid fully paying for new mandated programs. This maneuvering has included deferring mandate payments, not including money in the state budget for mandate reimbursements, making partial payments and simply declaring that other funding LEAs receive can pay for the mandate. Further, the process for obtaining reimbursements from the Commission on State Mandates can be onerous.

In the 2012–13 Budget Act, the state created an alternative to the mandated claims process by establishing a mandate reimbursement block grant that provided a per-pupil allotment to an LEA in lieu of a reimbursement based on claims. Although it provides greater funding flexibility for schools, it is subject to the annual state budget process and thus delays or even underfunds the true cost of a state mandate. Gov. Gavin Newsom’s 2024–25 proposed budget includes approximately $288 million for the block grant.

While the block grant provides simplicity, its creation was intended to avoid reimbursing LEAs for the full cost of mandates. Every time the state skirts its obligation to fully fund a mandate, it means that a school, city or county must “find” money from other programs or services to implement the state requirement. This potentially creates a ripple effect where another program, service or requirement — probably mandated by the state — must suffer in an effort to implement the new requirement. I would submit this defeats the purpose of the mandates and demonstrates that unfunded mandates do not support the well-being of California’s schools or residents.

If the state believes a program, service or activity is critical, then they should provide LEAs with the resources that match the actual costs to implement. For years, CSBA has been at the forefront of challenging unfunded mandates in the Legislature and in the courts. CSBA’s Education Legal Alliance has participated in, and led, major lawsuits against the state’s efforts to saddle LEAs with expensive unfunded and underfunded mandates, and we will continue to do so.

With the state budget ballooning to $73 billion, it’s a good time to advocate for relief from the undue imposition of unfunded and underfunded mandates. If we don’t, this gift from the state will keep on “giving” — and costing you precious resources.

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