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Unfunded mandates aren't always federal

by Greg Lucas, published

Mandates, funded or unfunded, aren’t unique to the federal government -- the state imposes 51 on school districts and community colleges, with one requirement costing as much as $200 million annually.  California’s constitution says schools must be reimbursed for any actions the state commands them to perform –everything from scoliosis screening to truancy notifications – but to save money, the state routinely postpones payment or temporarily suspends school compliance requirements.

Until the courts declared it unconstitutional in 2008, the Legislature and governor budgeted only $1,000 in reimbursements for school mandates for six straight years.  That shorting of districts sharply increased the backlog of unpaid mandate claims. That backlog of payments is estimated to be $3.6 billion by June 30, the end of the state’s current fiscal year. That’s an $800 million increase since June 30, 2008.  Annual reimbursement claims from schools have risen from $5 million in 1993 to more than $400 million in 2006, the last year for which data is available.

In his budget proposal for the fiscal year beginning July 1, Gov. Arnold Schwarzenegger proposes suspending all but three education mandates for one year in order to save $373 million.  Educators oppose the idea, favoring instead a determination of which mandates should be kept and which discarded rather than a one-year suspension.  Critics say most of the requirements are unnecessary, duplicate federal law and cost money better spent on educating students.     “Performing these services diverts money from a district’s general purpose revenue,” said Sue Burr, executive director of the California County Superintendents Educational Services Association.  “And there are those who would argue money that could otherwise be going to instruction is going to bureaucracy.”

Defenders counter that many of mandates are needed to protect public health and improve educational quality.  Schools have a love-hate relationship with the mandates.  It can be a source of revenue.  Collective bargaining is one of the reimbursable mandates so a district’s management and employees can be reimbursed for the time spent on negotiations.  Requiring pupils to take at least two science classes in order to graduate from high school is reimbursable  -- an estimated $200 million annually – but is already a part of many district’s graduation requirements without it being mandated.  On the other hand, whatever reimbursement schools receive from the state comes from the pot of money schools would ordinarily receive from the state, not in addition to it.

Compliance is complicated enough that the mandates have spawned an industry of private companies who aid districts in meeting state demands.  In return, the companies rake off a percentage of the eventual state reimbursement.  “It has created a little cottage industry particularly for smaller districts who don’t have staff to do all the recording,” said Rick Pratt, assistant executive director of the California School Boards Association.

A recent study of education mandates by the Legislative Analyst calls the system “broken” and recommends elimination of 27.   “Districts are required to perform hundreds of activities even though many of these requirements do not benefit students or educators,” the Legislative Analyst says.  The report recommends maintaining 12 state-reimbursable mandates.  Among the more costly of the 12 is districts proving students have been immunized against hepatitis B, measles, mumps, rubella, diphtheria, tetanus and whooping cough.  Reporting that information to the state costs schools $6.2 million each year, the Legislative Analyst estimates.

Additionally, the analyst would also continue to require school districts to review petitions for charter schools, force counties to certify district budgets are financially sound, inform parents that students need a health screening before enrolling in kindergarten and, at a cost of $8.5 million annually, paying for excess costs of administering the High School Exit Exam.

Mandates recommended for elimination include sending form letters to parents of students absent or tardy three or more times or truant three of more times.  Each form letter is reimbursed by the state at a cost of $17. The annual cost of the notifications is nearly $23 million.  Another mandate the analyst recommends abandoning – maintaining information on students who have committed suspendable and expellable offenses in the last three years and telling teachers who those students are.

Also suggested for elimination is a mandate to hire consultants to inventory chemicals in science classrooms and remove chemicals that are outdated but have not yet become dangerous, as defined in the state Health and Safety Code.     “Potential lawsuits resulting from harm to students create greater incentives for compliance than a mandate,” the analyst says.

Some educators are critical of the analyst’s report saying elimination of state mandates is merely a way for the state to save money by not being forced to reimburse the district.  “The Legislative Analyst’s report is only a rehash of recommendations they’ve made for several years that pretend to take the side of local schools in fighting against unfunded mandates,” said Kevin Gordon, president of School Innovations and Advocacy, a firm that helps districts recover mandate reimbursements.  “In reality, they suggest eliminating mandates or manipulating the language in state law regarding specific mandates that they know will result in schools having to continue carrying out the duties without any reimbursement,” Gordon said.  “Their recommendations are more about how to extricate the state from reimbursement requirements than a concern for real mandate reform.” 

Both the analyst and educators complain about the complexities of getting reimbursed by the state – when reimbursement occurs.   “Meaningful mandate reform should attack the problem of unfunded mandates being passed to begin with and the extremely bureaucratic process that has been created statutorily to narrow the ability for locals to get a fair determination of costs and then reimbursement on a timely basis,” Gordon said.

The analyst calls the process “elaborate.”   The state’s obligation to reimburse when it requires schools and local governments to carry out a new program or increase service levels stems from Proposition 4, a constitutional amendment approved by voters in 1979.   After its passage, the Legislature created the Commission on State Mandates to decide claims that a state law imposes new responsibilities on local governments.  Under the mandate approval system, once a new state law is passed, districts have one year in which to file a test claim with the commission.  The commission then issues a “Statement of Decision” laying out its reasons for deciding whether the test claim is a mandate.  Then the commission adopts an estimate of the statewide costs of compliance.    

In light of the state’s $20 billion budget shortfall, resolution of the mandate issue is unlikely this year.  Generally, educators say their goal would be to create a simpler reimbursement process and winnow the list of mandates to the most essential.
“Let’s have a policy discussion of which we want to keep and which we don’t and then fund the ones we want to keep,” said Pratt. “It doesn’t make sense to suspend mandates one year at a time. Either they are good things to do or they’re not good things to do. That’s the determination that needs to be made.”

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