The California Court of Appeal has found the State’s practice of nominally funding mandated programs to be unconstitutional. However, the practical impact of that ruling for school districts was muted by a companion ruling that the court is unable to order the Legislature to either fund mandated programs or suspend the mandates, holding that such an order would violate the separation of powers doctrine of the California Constitution. The Court also found that it could not order the State to actually pay school districts the almost $1 billion that is owed them for unfunded mandates, also because of the separation of powers doctrine. Districts can only seek relief prospectively, for future violations. (California School Boards Association v. State (Feb. 9, 2011, D055659) ___Cal.Rptr.3rd___ [2011 WL 453247].)
Background of the Case: We originally reported on this case back in 2008 (NF No. 08-46) when the San Diego Superior Court initially determined the State’s practice of deferring full reimbursement of 38 school-related mandated programs was unconstitutional. The Superior Court had also issued a writ commanding the State to ensure costs of each mandate was included in the budget or to suspend the mandate(s). Both CSBA and the State appealed the Superior Court’s ruling.
Underfunding Mandates is Unconstitutional: The Court of Appeal upheld the lower court’s determination that the State’s practice of nominally funding the mandated programs with the intention to pay the remainder with interest at an unspecified later date does not constitute a funded mandate under the applicable constitutional and statutory provisions.
No Mandate Suspension: However, the Court held that it could not order the State to either fund or suspend the mandates. A court order may not compel the State to perform a discretionary act. Rather, a court order is appropriate if the agency has a “clear, present and ministerial duty to act in a particular way.” Here, the Court determined there is nothing ministerial about placing items in the budget bill, and the formulation of a budget bill is both a discretionary function and a legislative power.
The California Constitution’s separation of powers doctrine prohibits the courts from issuing writs that direct the Legislature to take specific action, including to appropriate funds and pass legislation. The courts have no authority to issue an order that interferes with powers exclusively held by the other branches of government.
No Order for Refund: Most disappointingly, the Court also refused to order the State to refund the almost $1 billion it owes to school districts for unfunded mandates from prior years. The Court again relied on its separation of powers arguments and frankly noted that the amount was too large and that because of budget conditions, funds simply might not be available.
Limited Prospective Relief: The Court apparently realized that it had to do something for school districts, because its ruling would otherwise establish a constitutional right without a remedy. It therefore allows districts to seek piecemeal relief from mandates. If the State does not fund or only nominally funds a mandate, then a school district may seek a judicial determination that it need not comply with that mandate for a year. Because of court delays and litigation costs, the efficacy of this limited relief is questionable, at least for the school district budget making process.
Conclusion: Nominally funded mandates are unconstitutional. However, the Court made clear that it will not order a blanket requirement that the Legislature either fund or suspend state mandates. The onus is on school districts to seek relief from unfunded mandates through the process provided in the Government Code. Please contact one of our five offices for further information or for assistance with any unfunded mandates.
F3 NewsFlash prepared by Mark Williams and Cynthia Smith.
Mark is a partner in the F3 Oakland office.
Cynthia is an associate in the F3 Sacramento office.
This F3 NewsFlash is a summary only and not legal advice. We recommend that you consult with legal counsel to determine how this case may apply to your specific facts and circumstances. Information on a free NewsFlash subscription can be found at www.fagenfriedman.com.
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 Since 2002, the Legislature engaged in a routine practice of appropriating $1,000 for each of the 38 mandates imposed on school districts rather than appropriating the full amount of the program costs. Such appropriation equated to approximately $1 per mandate for each California school district for the entire fiscal year.
 Such process is set forth in Government Code section 17612(c). The Legislature may also, in its discretion, specifically relieve school districts of complying with a mandated program, but this action is limited to only a few categories of mandates applicable to school districts, as set forth in Government Code section 17581.5(c).