Mandate Redetermination and Offsetting Revenues

CSBA v. State of California (2013) Case No. S247266 – California Supreme Court Update

Member(s) Involved: Butte County Office of Education; Castro Valley Unified School District; San Diego Unified School District; San Joaquin County Office of Education

Current status and/or outcome:

On Dec. 19, 2019, the California Supreme Court upheld the appellate court’s opinion, ruling that the Legislature could consider funds it already provides schools as offsetting revenues for new mandates it imposes on them, and need not provide additional funding for the new mandates. The Court wrote that, “[a]lthough CSBA asserts that the [Graduation Requirements] funding designation leaves school districts with less unrestricted money to provide general education programming and that the [Behavioral Intervention Plans] funding designation diminishes the amount of funds available for other special education services, these general claims of insufficient funding, without more, do not make out a constitutional violation.” In its decision, the Supreme Court recognized that the purpose of the mandate requirement in the California Constitution is to ensure the State pays for any programs it imposes on local governments, including school districts and county offices of education, but found that the language of article XIII B, section 6 does not preclude the Legislature from adjusting the mix of state funding allocated for unrestricted versus mandate purposes. The Court noted that it is conceivable that increased compliance costs imposed by the state could become so great that the funds provided would not cover the cost of complying with the mandate, which likely would be a constitutional violation, but the Court did not find the state mandates at issue in this case in violation, even if some districts have had to make difficult decisions and cuts to other programs to meet the requirements of these state mandates.

Importance of statewide issue:

Ensuring appropriate funding/reimbursement of state mandates, like for the cost of graduation requirements and the Behavioral Intervention Plans (BIPs), is important for school districts with limited budgets.

Summary of the case:

In 2011, the ELA challenged the statutory scheme regarding mandate reimbursement by arguing that the scheme as a whole frustrates the right of reimbursement under the California Constitution — that districts and county offices of education are being required to provide services without a reasonable expectation of timely reimbursement, and that the procedures for reimbursement imposed an unreasonable burden on the right to reimbursement. This lawsuit explicitly challenges the statutes which allow the State to eliminate its reimbursement obligation by “redetermining” or reconsidering whether a mandate exists.

Because of subsequent changes in state law, the ELA had to amend its complaint to challenge various new tactics that the State had devised to avoid reimbursing districts and county offices of education for their mandate claims. One particularly egregious tactic is to identify “offsetting revenues” as reimbursement for mandate claims. These offsetting revenues are fund that districts and county offices of education would already receive; thus, districts receive no new or additional funding under this tactic. The State has used offsetting revenues to avoid reimbursing districts and county offices of education for the BIP and the High School Science Graduation Requirement mandates.

The trial court ruled against the ELA, holding that the State could use existing revenues as it saw fit, including identifying them as offsetting revenues for mandate reimbursement purposes. The appellate court largely upheld the superior court’s ruling. The California Supreme Court granted CSBA’s Petition for Review. Amicus letters were filed in support of CSBA’s Petition for Review by Clovis USD, Corcoran USD, Culver City USD, East Side Union HSD, El Monte Union HSD, Elk Grove USD, Kern HSD, Lassen COE, San Juan USD, California State Association of Counties, League of California Cities and School Innovations & Achievement.