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California School Boards Association et al v. Edmund G. Brown

February 25, 2011

CALIFORNIA SCHOOL BOARDS ASSOCIATION ET AL., PETITIONERS,
v.
EDMUND G. BROWN, JR., AS GOVERNOR, ETC., ET AL., RESPONDENTS.



The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

ORIGINAL PROCEEDINGS in mandate. Petition for writ of mandate is denied.

Under California Constitution, article XIII B, section 6, subdivision (a), whenever the state mandates a new program or higher level of service upon a local government, the state is required to provide a subvention of funds to reimburse the local government for the costs of the mandated program or increased service. In this case, we are concerned with a mandated program for which the state is several hundred million dollars in arrears in its payments to local governments. In November 2004, the voters approved Proposition 1A, which added to section 6 of article XIII B a provision requiring that the state begin reimbursing local governments for the amounts due. (Cal. Const., art. XIII B, § 6, subdivision (b).) Under that provision, in each year, for each unreimbursed mandate, the Legislature is required to either: (1) appropriate, in the annual Budget Act, the full amount due that year toward repaying the local governments for the unreimbursed mandate; or (2) suspend the operation of the mandate. (Cal. Const., art. XIII B, § 6, subd. (b)(1).) In the instant case, we are concerned with a mandate for which the Legislature appropriated the required amount in the Budget Bill, and the Governor exercised his power of line-item veto to eliminate the appropriation (Cal. Const., art. IV, § 10, subd. (e)).

In this original proceeding, we are asked to determine if the Governor had the power to veto the appropriation of reimbursement funding for the mandate, or if, to the contrary, the discretion to make an appropriation of mandate reimbursement funding is exclusively vested in the Legislature. We conclude that the Governor was constitutionally permitted to exercise his veto in this manner. We therefore will deny the petition to declare the Governor's veto void.

FACTUAL AND PROCEDURAL BACKGROUND

The factual background leading to the instant proceeding is undisputed. A brief overview of the law governing mandate reimbursement and the history of the particular mandate at issue will help to place the instant dispute in proper context.

1. Mandate Reimbursement

Article XIII A was added to the California Constitution by Proposition 13 in 1978. It limited state and local governments' ability to increase taxes. The following year, the electorate approved Proposition 4, which added to the Constitution Article XIII B, a complementary limit on the rate of growth of government spending. Included among its provisions was section 6, which provided for reimbursement to local governments for the costs of complying with certain requirements mandated by the state. (County of Los Angeles v. Commission on State Mandates (2007) 150 Cal.App.4th 898, 905.) The purpose of this section " 'is to preclude the state from shifting financial responsibility for carrying out governmental functions to local agencies, which are "ill equipped" to assume increased financial responsibilities because of the taxing and spending limitations that articles XIII A and XIII B impose. [Citations.]' [Citation.]" (County of San Diego v. State of California (2008) 164 Cal.App.4th 580, 588.)

Following the adoption of Article XIII B, the Legislature enacted a comprehensive statutory and administrative scheme for enforcing it.*fn2 (See Gov. Code, § 17500 et seq.) Of particular relevance to the instant dispute is Government Code section 17581, which provides that if the Legislature identifies a particular mandate in the Budget Act as one for which reimbursement is not provided for that fiscal year, the local agencies are not required to comply with the mandate during that year.

For a number of years, the Legislature chose not to fund certain mandates, but did not identify the mandates in the Budget Act as those for which no reimbursement would be provided. Instead, the Legislature funded the mandates in the token amount of $1000. This had the effect of not automatically suspending the operation of the mandates, but leaving them virtually unfunded.*fn3 Local agencies advanced considerable funds complying with drastically underfunded mandates, with the expectation of ultimately obtaining reimbursement from the state.

This state of events led to Proposition 1A, which was approved by the voters in November 2004. Proposition 1A, which was placed on the ballot by the Legislature, with the support of local governments,*fn4 added, among other things, section 6, subdivision (b) to Article XIII B. That subdivision provides that, for every fiscal year, "for a mandate for which the costs of a local government claimant have been determined in a preceding fiscal year to be payable by the State pursuant to law, the Legislature shall either appropriate, in the annual Budget Act, the full payable amount that has not been previously paid, or suspend the operation of the mandate for the fiscal year for which the annual Budget Act is applicable in a manner prescribed by law." (Cal. Const., art. XIII B, § 6, subd. (b)(1).) The full arrearage may be paid over a term of years. (Cal. Const., art. XIII B, § 6, subd. (b)(2).) By statute, that period has been established to be 15 years. (Gov. Code, § 17617.) Thus, with respect to a reimbursable mandate, for each fiscal year, the Legislature is required to choose to either fully fund the annual payment toward the arrearage or suspend the operation of the mandate.

2. Special Education Related Services

We are here concerned with a reimbursable mandate relating to special education. The federal Individuals with Disabilities Education Act (IDEA) (20 U.S.C. § 1400 et seq.) has the purpose of ensuring "that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs . . . ." (20 U.S.C. § 1400(d)(1)(A).) "Related services" include social work services, counseling services, rehabilitation counseling, and medical services as may be required to assist a child with a disability to benefit from special education. (20 U.S.C. § 1401(26).) Under the IDEA, the federal government provides financial assistance*fn5 to states which submit plans that provide assurances that certain conditions will be met. (20 U.S.C. § 1412(a).) Among those conditions are that a free appropriate public education is available to all children with disabilities. (20 U.S.C. § 1412(a)(1)(A).) A state's educational agency must be responsible for meeting the IDEA's requirements. (20 U.S.C. § 1412(a)(11)(A).) However, the state may assign responsibility for the provision of related services to other agencies. (20 U.S.C. § 1412(a)(12).)

In California, the state and local education agencies*fn6 were initially responsible for providing not only special education, but all related services, to students with disabilities.*fn7 This was changed with the enactment of Chapter 26.5 of the Government Code, entitled "Interagency Responsibilities for Providing Services to Children with Disabilities."*fn8 (Gov. Code, § 7560 et seq.) Under this statute, local education agencies remained responsible only for education services. (Gov. Code, § 7573.) Related mental health services were to be provided by the State Department of Mental Health or community mental health agencies. (Gov. Code, § 7576.) We refer to these related mental health services as "Chapter 26.5 services."

As local mental health agencies had not previously been required to provide Chapter 26.5 services to special education students, local mental health agencies argued that these requirements constituted a reimbursable state mandate. In a series of three successive opinions, the Commission on State Mandates concluded that these requirements constituted a reimbursable state mandate, and discussed, in detail, exactly which expenses were reimbursable. (Nos. CSM-4282, 97-TC-05, 02-TC-40/02-TC-49.) Thus, there is no dispute in this case that the Chapter 26.5 services obligations at issue do, in fact, impose a reimbursable state mandate on local mental health agencies. We refer to this as the "Chapter 26.5 mandate."

3. The 2010-2011 State Budget Act

In making budget decisions, the state could decide to fully fund its repayment obligation under the Chapter 26.5 mandate, or decide not to do so. The state could also choose a middle course of funding the reimbursement for a limited time while simultaneously enacting legislation conveying responsibility for Chapter 26.5 services back to the local education agencies.*fn9 The decision among these options is a policy decision left to the Legislature and Governor; the wisdom of the course pursued by those branches of government is not a matter for judicial review. We note, however, that as early as the 2005-2006 budget - when the Proposition 1A arrearage payment requirements first went into effect - the Governor proposed ...


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