Schools Face Funding Riddle with New State Budget (CA)
October 26, 2010
The new state budget looks like one that would make California school officials happy.
State legislators restored $1.7 billion to schools, cut by the governor in his May budget revision.
But lawmakers deferred payment until next July, and education leaders – weary from years of cuts – don’t trust t hat the money will make it to schools.
The budget also suspended Proposition 98, which guarantees a minimum funding level for public education. This resulted in a loss of $4.3 billion to schools, according to School Services of California Inc., a consulting firm that advises school districts.
An unexpected budget twist has added to the angst. Gov. Arnold Schwarzenegger vetoed $133 million in mental health funding for special education, essentially shifting responsibility for providing services from counties to school districts.
Districts aren’t quite sure what to do.
"Our guidance has been to open the planning books and plan for current law, but close the checkbook and don’t spend it," said Ron Bennett, president of School Services.
On average, schools should receive 5.17 percent more in funding than was anticipated in May, Bennett told The Bee. "We think that’s a good thing," he said. "If the money stays, it provides some relief."
But some experts aren’t convinced that will happen, saying the budget is based on questionable revenue. Bennett estimates there is about $5 billion of "wishful thinking."
"The next governor walks in, and they will have a big deficit," he said. "We’re not sure what they’ll do, and it makes us nervous."
Keeping the cash flowing – after $18 billion in cuts to education in the last few years – becomes more complicated as the state delays payments to districts. The state had four payment deferrals built into the law in 2008. This year’s budget includes five – including deferral of the $1.7 billion unt il July of 2011 – for a total of $7 billion, Bennett said.
"These deferrals help the state but put the school district at much more risk," said Mike Dencavage, chief financial officer for San Juan Unified.
Districts can apply for an exemption, but essentially only if they are facing bankruptcy. Most will borrow to keep the cash flowing.
School districts may face bigger cash-flow problems if they have to take on the cost of mental health care for special education students.
Some of the services are provided through federally funded programs or Medi-Cal, said Patricia Ryan, executive director of the California Mental Health Directors Association. The $133 million was for unreimbursed expenditures – over and above federal funding. Services were paid for by the state and provided by the county until the governor vetoed funding Oct. 8.
County mental health providers have traditionally worked with districts to provide services to special education students with severe needs. These services generally include crisis counseling, case management, medication management and residential placement.
In the worst-case scenario, a school district could be responsible for the entire cost of placing these students in a residential care program, but more likely they would be responsible for a portion of the costs, said Judy Holsinger, executive director of the Sacramento County Special Education Local Plan Area.
Mental health services for special education students will continue despite funding issues, say educators. The California Department of Education sent out a memo last week reminding school officials of their federal mandate to provide the services.
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Staff from Placer County and the Placer County Office of Education have been meeting to decide how to best provide the services. The Office of Education expects to pick up the costs, said Placer schools chief Gayle Garbolino-Mojica.
Sacramento County will bear the burden for its schools. "We plan to continue to provide services for children’s mental health," said Laura McCasland, spokeswoman for the county Department of Health and Human Services. "We’re trying to figure how we will do it."
A lawsuit filed in federal court Friday by a number of organizations, including Disability Rights California, seeks class-action status and calls for the preservation of mental health services for special education.
"While the adults quibble about who is responsible – for funding, for services, for this entire mess – in the midst of this chaos, we are stepping up to fight for their continuity of care," Laura Faer of Public Counsel Law Center said in a prepared statement.
There could be some relief if lawmakers make good on promises to reverse the governor’s veto after they return in December.
In the meantime, counties and school districts across the state are in flux. Some counties have continued services, while others have stopped accepting referrals for new students, Ryan said.