Education Mandates: Overhauling a Broken System

Executive Summary

California has an elaborate system for identifying mandates and reimbursing local government agencies, including school districts and community colleges, for performing related activities. Currently, the state has more than 50 education mandates, with each mandate requiring school districts and/or community colleges to perform as many as a dozen specific activities. In 2009–10, these education mandates are estimated to cost a total of more than $200 million. When coupled with a pending mandate relating to high school science graduation requirements, annual costs total more than $400 million.

California’s process for identifying mandates creates major problems for schools, community colleges, and the state. At the local level, districts are required to perform hundreds of activities even though many of these requirements do not benefit students or educators. The existing mandate system also can reward districts for performing activities not only inefficiently but ineffectively. Making matters worse, the state’s system for funding mandates is broken. Oftentimes, districts claim vastly different amounts for performing comparable activities. Moreover, the state does not pay for these activities on a regular basis, instead deferring district reimbursements to future years. As a result of these deferrals, which were deemed unconstitutional by a superior court in 2008, the state owes roughly $3.6 billion in outstanding mandate claims (including the high school science mandate, which more than doubled the backlog). In short, districts are required to perform hundreds of activities—many of dubious merit—without regular pay, resulting in billions of dollars in state debt.

In this report, we present a comprehensive K–14 mandate reform package. As a general principle, we think the state should not mandate an activity unless it is of fundamental importance to the education system. Using this standard, we evaluate mandates on a case–by–case basis. In the few cases mandates are serving essential purposes, we recommend funding them using a simplified reimbursement process. For some mandates, the underlying policy objective appears worth preserving but the mandate process is not the best means of achieving that objective. In these cases, we find a more effective policy alternative that largely achieves the same goal. We recommend eliminating the remaining mandates either in whole or part. By relieving schools from performing the vast majority of K–14 mandate requirements, our package of recommendations would result in more than $350 million in annual savings.

Introduction

This report presents a comprehensive K–14 mandate reform plan. The report is divided into four sections. First, we provide background on the current mandate system. Second, we discuss problems current K–14 mandates create for both local educators and the state. Third, we summarize the Governor’s 2010–11 proposal to suspend most K–14 mandates and highlight two major shortcomings of such an approach. Finally, we recommend a strategy for comprehensive K–14 mandate reform and describe how to implement that strategy.

MultiStep Process Used to Identify Reimbursable Mandates

In this section, we provide background information on mandates, including the role of the Commission on State Mandates (CSM) and the number of K–14 mandates that currently exist.

Mandate Determination Process Overseen by CSM. In 1979, voters passed Proposition 4, which added a requirement to the California Constitution that local governments be reimbursed for new programs or higher levels of service the state imposes on them. As part of its response to Proposition 4, the Legislature created the CSM to hear and decide claims that a state law imposes new requirements on local governments, including school districts and community colleges. In its current form, CSM consists of seven members entrusted with overseeing the mandate determination process (see Figure 1).

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California Has Unique Legal System for Identifying Reimbursable Mandates. Due in part to the requirements placed on the state by Proposition 4, California now has an elaborate legal process for determining whether new requirements constitute mandates (see Figure 2 for a simplified overview of this process). Following the passage of a state law, executive order, or regulation, school districts and community colleges (as other local government entities) have one year to file a “test claim” with CSM asserting the new requirements impose on them a new program or higher level of service and are therefore reimbursable. The CSM adopts a “Statement of Decision” articulating the reasons for its determination whether a test claim is a mandate. Following adoption of the Statement of Decision, the commission must adopt a “statewide cost estimate” for the mandate. Upon adoption of a statewide cost estimate, CSM’s role is largely finished and responsibility for reimbursing school districts and community college’s is turned over to the State Controller’s Office (SCO). The SCO accepts claims from school districts and community colleges that are based on the commission’s adopted guidelines for reimbursement. From beginning to end, the mandate determination process usually takes roughly five years to complete.

Determination Process Limits Legislature’s Role in Mandate Process. The legal authority given to CSM has implications for the role the Legislature plays in the mandate determination process. Before legislation is passed into law, the Legislature has options for avoiding many mandates by structuring policies in ways that do not shift requirements onto local governments. However, once a bill becomes law and activities required of local governments are deemed reimbursable by CSM, so long as those requirements remain in law, the state has no choice but to eventually reimburse them. Short of taking legal action, the Legislature merely can fund the mandate or eliminate its cost by changing the statute creating it.

School Districts and Community Colleges Required to Perform 51 Reimbursable Activities. The state now imposes 51 mandates on school districts and community colleges each year (see Figure 3). The majority of these mandates apply only to K–12 schools whereas seven mandates apply solely to community colleges. Some mandates, such as collective bargaining, are required of both school districts and community colleges. Finally, some mandates involving other local agencies, such as city governments, also apply to school districts and community colleges. (These local government mandates extend beyond the scope of this report and therefore are not discussed in detail.)

Mandates in Various Stages of the Determination Process. Mandates can be in different stages of the mandate determination process. Mandate claims that have completed the process typically appear in the annual budget act. Other mandates that have not fully completed the process, however, can still generate costs. For example, mandates involved in litigation or awaiting an official cost estimate might generate substantial costs though not listed in the budget act. (The additional claimable mandates listed in Figure 3 either have not completed the determination process or were simply omitted when the budget act was crafted.)

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Some Mandates Have Been Suspended. Once a mandate has been established, the Legislature retains the authority to determine whether it remains in effect. The Legislature can eliminate a mandate by repealing the provisions of law or “suspend” a mandate on a year–to–year basis. Suspending a mandate means the law creating the mandate technically remains in statute, but school districts and community colleges do not have to perform the mandated activities during the suspension period. Currently, five mandates applying to school districts (three of which also apply to community colleges) are suspended. These mandates were suspended on a case–by–case basis. For example, the School Bus Safety mandate was suspended in part because its costs were exceeding expectations.

Current Status of K–14 Mandate Funding

In this section, we describe the state’s general approach to paying for K–14 mandates and address their long–term costs to the state.

Yearly Claims Have Increased Substantially, Sporadically Over Time. Over the last two decades, as the state has passed more laws that impose new local government requirements and CSM has heard more cases, annual K–14 mandate claims have grown substantially. As shown in Figure 4, in 1992–93 (the first year for which data are readily accessible), annual K–14 unadjusted mandate claims totaled less than $5 million. By 2005–06 (the most recent year for which complete data were available at the time this report was being prepared), annual claims exceeded $400 million. (These figures include claims for some of the mandates still completing the determination process.) Increases in claims have corresponded with the identification of more mandates, more districts filing claims, and increased costs for existing mandates. While claims have increased significantly over time, year–to–year changes can be volatile due largely to the number of claimable mandates. For example, the number of mandates doubled between 1994–95 and 1995–96, increasing claims from $25 million to roughly $200 million. By contrast, claims fell in 2002–03, due largely to decreases in certain volume–driven mandates, such as processing interdistrict transfers and collective bargaining.

Mandates Just Finishing Process Likely to Lead to Large Cost Increases in Future Years. Our office estimates annual school district and community college mandate claims will reach $416 million in 2009–10, including roughly $200 million in new annual claims associated with the high school science graduation mandate. (The SCO recently released new retroactive claims data for the graduation requirement mandate, which serves as the basis for our estimate.) Another mandate related to special education with potentially big costs is involved in a court case awaiting resolution. In addition, over a dozen claims are still on file with CSM awaiting statements of decision. In short, while uncertainty remains over exactly how much annual costs will increase, they are likely to grow considerably in the near term.

State Typically Defers Mandate Payments to Future Years. In recent years, the state has not paid these annual K–14 mandate claims. Instead, the state has deferred payments by providing only a nominal sum for each mandate in the annual budget act. The 2009–10 Budget Act, for example, provides only $41,000 ($1,000 per identified mandate) for activities school districts and community colleges will likely claim in excess of $400 million to perform. Despite receiving virtually no funding, districts must still perform the activities required by each mandate.

Current Backlog of Mandate Claims Substantial. As shown in Figure 5, the backlog of unpaid K–14 mandate claims is substantial. We anticipate unpaid K–14 mandates, including the graduation requirement, will total roughly $3.6 billion in 2009–10. The state has a constitutional obligation to eventually pay off this backlog (though it has some options for reducing some costs for pending mandates, such as the high school graduation requirement mandate).

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Superior Court Declares Deferring Payments Unconstitutional. In December 2008, a superior court found the state’s practice of deferring education mandates unconstitutional and ordered the state to fully fund mandated programs “in the future.” (The opinion responds to a lawsuit filed in 2007 by five school districts and the California School Boards Association against the Department of Finance and State Controller seeking payment of past mandate claims and an end to deferrals.) While constitutional separation of powers means the court cannot force the Legislature to make appropriations for past mandate costs, its decision increases pressure on the state to pay the annual ongoing cost of education mandates.

Noneducation Mandates Already Funded on an Ongoing Basis. One motivation for the court case involving education mandates was that other local government (cities, counties, and special districts) mandates are already funded on an annual ongoing basis. Under Proposition 1A, approved by the state’s voters in 2004, the Legislature has only three options for addressing other local government mandates: (1) appropriate funds in the annual budget to pay a mandate’s outstanding claims, (2) suspend the mandate (render it inoperative for one year), or (3) “repeal” the mandate (permanently eliminate it or make it optional). Two categories of mandates—those relating to K–14 education and employee rights—are exempt from this payment requirement. Though the exact impact of Proposition 1A on the mandate process is unclear, noneducation mandates are more likely to be suspended or eliminated than K–14 mandates.

Virtually Every Aspect of K–14 Mandate System Broken

In this section of the report, we discuss problems with K–14 mandates and the state’s approach to funding them. These problems are summarized in Figure 6.

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Mandates Often Do Not Serve Compelling Purpose. Mandated activities do not necessarily serve a more compelling purpose than other policies that are not mandated. Oftentimes, a law becomes a mandate not because it serves an essential function, but because the original legislation did not phrase its requirements very carefully. Further, many mandated activities are of altogether questionable value. For example, one mandate requires districts to submit physical education data that are already collected during regular audits. Another requires schools to remove chemicals from science classrooms even though state Health and Safety Code includes similar provisions. Yet another requires administrators to inform teachers when one of their students has committed an expellable offense, even though principals are already responsible for keeping teachers safe and would provide staff with this information in the absence of a mandate. (In stark contrast to the state’s treatment of K–14 mandates, the amended 2008–09 Budget Act removed requirements associated with many categorical programs that arguably serve more compelling purposes, such as requirements related to summer school, programs for suspended or expelled students, instructional materials, and professional development. See nearby box for more detail.)

Little Justification for Treating Mandates and Categorical Programs So Differently Beginning in 2008–09, the state significantly increased local flexibility by essentially eliminating the requirements associated with roughly 40 state–funded categorical programs. One rationale for this categorical flexibility was to allow school districts and community colleges to focus resources on a smaller range of top priorities amidst diminishing state funding. Despite offering more categorical flexibility, the state chose to maintain more than 50 K–14 mandates, many of which have dozens of specific requirements. Given the types of requirements associated with categorical programs and mandates can be quite similar, eliminating many categorical requirements while simultaneously maintaining virtually all K–14 mandate requirements has little justification. Moreover, eliminating mandated requirements would result in as much, if not more, local flexibility, especially given the highly detailed process entailed in filing a mandate claim.

Costs Can Be Higher Than Anticipated. Not only are mandates often of questionable value, but their costs often are much higher than anticipated. The mismatch between initial expectations and final costs can occur for several reasons. In some cases, the state can end up being required to reimburse districts for activities that were not intended to increase total education costs. In other cases, lawmakers do not anticipate the range of activities that eventually will be deemed reimbursable. The high school graduation requirement mandate fits both categories. For instance, our office’s Analysis of the 1983–84 Budget Bill (the year after the state increased graduation requirements) anticipated minimal costs for this mandate. Nonetheless, based on a 2004 superior court ruling, which expanded the scope of reimbursable activities, annual claims are all but certain to reach about $200 million. In general, costs per mandate can vary dramatically depending on the number of districts that ultimately file claims, the number of years covered by claims, the activities deemed allowable, and subsequent statutory decisions and legal rulings. Consequently, legislators can rarely predict the fiscal ramifications of the policies they establish that eventually are deemed mandates.

Recent Court Ruling Likely to Make Containing Costs Even More Difficult. A 2009 Appellate Court ruling found unconstitutional the Legislature’s practice of referring mandates back to CSM in an attempt to reduce associated costs through “reconsideration.” Specifically, the court ruled the Legislature cannot refer any previously decided mandate back to CSM without a consistent process for doing so. This is significant because legal developments after a mandate’s initial determination can occasionally reduce the cost of a mandate and the Legislature has wanted a way to recognize these savings. For example, several court rulings involving collective bargaining rights have been issued that would likely impact the costs associated with the K–14 collective bargaining mandate. Specifically, the courts have clarified that requirements applicable to public and private entities are not mandates. Nonetheless, as a result of the 2009 ruling, CSM has no way to revise its decisions in light of new legal precedent until a new process is developed that is consistent with the court’s findings. Thus, the recent ruling further limits the state’s options for lowering the cost of an established mandate.

Reimbursement Rates Vary Greatly Without Justification. In addition to these overarching problems, mandates allow districts to claim widely different reimbursement amounts and receive widely different rates for performing the same activities. The variation often reflects local record keeping and claim–filing practices more than substantive cost differences in implementing policy objectives. For example, some larger districts have staffing units dedicated to processing mandate claims or hire accounting firms to file claims whereas many smaller districts have one administrator to file claims while juggling many other responsibilities. Figure 7 provides an example of the notable variation in reimbursement amounts. As shown in the figure, among a subset of districts selected by our office for purposes of illustration, reimbursements for the graduation requirement mandate ranged from $6 to $264 per pupil and reimbursements for the high school exit exam ranged from $3 to $26 per pupil. Moreover, more than 11 percent of eligible school districts did not file a claim for the high school exit exam, suggesting the process was not worth the investment of staff time. For some mandates, as many as one in four districts does not file a claim.

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Reimbursement Process Can Reward Inefficiency. Districts also receive more in mandate funding by claiming more activity, not by performing an activity efficiently. Many mandates are reimbursed based on the amount of time devoted to a required activity and the salary of the staff member performing it. In other words, the more time devoted to an activity and the higher the staff member’s rank, the greater the reimbursement. For example, the longer it takes school districts to reach collective bargaining agreements or evaluate their teachers, the greater the reimbursement.

Reimbursement Process Ignores Effectiveness. The state also has little power to hold districts accountable for performing mandated activities effectively. That is, districts can claim expenses for performing an activity regardless of how well it is performed or whether its underlying policy objectives are achieved. For example, school districts receive the same amount for sending a form letter home when a student becomes a truant, regardless of whether the districts’ efforts increase parental involvement or reduce dropout rates.

Governor’s Proposal to Suspend Most K–14 Mandates Misses Opportunity

The Governor’s 2010–11 budget includes funding for the annual cost of three K–12 mandates but suspends all remaining K–14 mandates (except for the graduation requirement mandate, which the administration is challenging in court). Unlike the practice of deferring mandate costs, suspending mandates would relieve the state from the obligation to pay for required activities as well as relieve local schools from performing them. The Governor’s proposed suspensions would reduce associated 2010–11 claims by roughly $373 million. While the Governor’s plan reduces state mandate costs and is a better option than continuing to defer costs, we believe his plan misses an opportunity to engage in substantive mandate reform. Specifically, we think the Governor’s plan has two major shortcomings as described below.

Treats All Currently Mandated Activities Alike Regardless of Policy Merits. The Governor’s proposal does nothing to preserve the state policies that underlie many education mandates. For instance, suspension would temporarily remove requirements that students receive a medical examination and potentially lifesaving immunizations before entering school. In the past, lawmakers have found strategies to limit the high cost of some mandates while creating strong incentives for schools to perform activities fundamental to the operation of a school district. By suspending mandates, the administration fails to create such incentives.

Suspension Creates Confusion for Districts. Suspension also would lead to confusion among districts about what activities they are required to perform. Rather than actually repeal or amend sections of the Education Code, suspension through the budget act makes sections of law inoperative only for the year in which they are suspended. As a result, districts would be forced to cross–reference the budget act with the Education Code and lengthy CSM decisions to determine what activities they are still required to perform. Moreover, districts cannot dismantle costly programs for a single year if there is a chance the mandate will be reinstated the following year. For example, a district is unlikely to release science teachers one year only to rehire them the next.

Recommend Comprehensive Mandate Reform

In this section, we recommend comprehensively reforming K–14 mandates, discuss related implementation issues, and make suggestions for addressing future mandates. As shown in Figure 8, our reform package would save the state $363 million annually by no longer requiring non–essential or ineffective activities. Our package would fund slightly more than $30 million in ongoing mandate costs to support essential activities.

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State Should Adopt Comprehensive Mandate Reform Package. We recommend the state assess the merits of each K–14 mandate. For most mandates, we recommend either funding or eliminating them in their entirety. For a few mandates, however, we recommend a hybrid approach whereby certain activities associated with a mandate would be funded and the remaining activities eliminated. Eliminating a mandate is not necessarily the same as eliminating the related policy. Oftentimes, a mandate can be eliminated while still preserving underlying policies that serve a compelling purpose. Under our reform package—taken in totality—the state can relieve schools from performing hundreds of activities of relatively little value to students while saving hundreds of millions in mandate costs annually.

Fund Select Mandates

As a general rule, the state should only mandate activities of fundamental importance to the effective operation of a school district. That is, implementing a policy that has reasonable objectives in an effective manner is not by itself sufficient justification for mandating an activity. In many cases, reasonable education policies that are not essential still can be implemented by creating a different incentive to perform related activities, such as making funding available for a school district to conduct the activities at its discretion. By comparison, an activity should only be mandated when it is essential—that is, in its absence, the educational system will not function with nearly the same effectiveness or integrity or the state will encounter significant health or safety risks. Specifically, in determining if a mandate is essential, we asses whether it meets five longstanding Legislative Analyst’s Office (LAO) criteria (see Figure 9).

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Use Narrow Definition of Statewide Interest. In making our assessment of each education mandate, we use a somewhat narrow definition of “statewide interest”—focusing primarily on activities related to accountability as well as public health and safety. Over time, the education system has gradually shifted to a focus on outcomes and accountability. An outcomes–based system cannot function, however, without data and procedures to assess effectiveness and hold schools accountable. Furthermore, the education system cannot meet its accountability goals if students and teachers are not protected from health and safety risks. In short, we believe educational activities should only be a mandate if they are needed to hold schools accountable or protect students and educators. This narrow definition of a statewide interest conforms to the approach the state has recently adopted for local agency mandates—funding certain public safety and oversight activities while suspending most other local agency mandates.

Several Existing Mandates Meet This Definition and Should Be Funded. While many existing mandates do not translate into essential services for students or teachers, some mandates do require activities of fundamental importance. In these cases, we recommend funding associated costs (see Appendix A). For example, despite an annual cost of nearly $10 million, we recommend the state pay to ensure students entering school have been immunized against certain infectious diseases, such as mumps, measles, and hepatitis B. The effectiveness of immunizations in preventing these communicable diseases, all of which could prove debilitating to school districts and their students, is well documented. We also recommend local education agencies continue to provide oversight of district budgets, charter schools, and plans to combine school districts. In each case, lack of sufficient regulation could have serious negative effects on impacted school districts.

Standardize Reimbursement for These Mandates. While we recommend funding the activities in Appendix A, we also recommend the state improve the manner in which it funds those activities. Specifically, we recommend the state work with original claimants and statewide organizations like the California School Boards Association to develop a standardized reimbursement methodology. For example, under our proposal, rather than fund school districts based on whatever they claim for the high school exit exam mandate, every district submitting a claim would receive a set amount for each student tested. A reasonable reimbursement methodology (or RRM) would help ensure districts are compensated reasonably for performing the same activities. An RRM also would reduce the staff time needed to file a claim, thereby making the claims process easier for smaller districts.

Pay Annually Based on Actual Prior–Year Costs. Once standardized reimbursements are adopted, we recommend the state pay for mandates on an annual basis and align payment schedules for education and other local government mandates. Other local government mandates currently are paid annually but two years in arrears. (For example, 2007–08 claims were paid in 2009–10.) Such a practice allows districts time to document their activities and file claims after the end of the year, which in turn allows the state to pay districts based on the actual activities they performed. Aligning mandate payments would mean all mandates are reimbursed two years in arrears.

Eliminate Mandates That Do Not Serve a Fundamental Purpose

Despite the important nature of certain mandates, others can be eliminated with little if any impact on students (see Appendix B). In some cases, these mandates require activities that also are required elsewhere in law. For example, the Notification of Truancy mandate largely overlaps with federal law that also requires school districts to develop policies for increasing parental involvement and reducing dropout rates. For other mandates, the activity may add some small value but does not justify its price tag. For instance, the state now pays $2 million a year for physical performance tests in certain grades. While physical activity is important for kids, these tests do not supplement state physical education requirements in any substantive way, nor do they provide data used to improve physical education practices. (While mandates suspended in the 2009–10 Budget Act do not generate costs and are therefore not addressed in Appendix B, we recommend eliminating them as part of our reform package.)

Truancy Mandates Exemplify Requirements That Should Be Eliminated. The two mandates requiring school districts to notify parents when students are truant exemplify requirements that should be eliminated. These particular mandates are expensive ($25 million annually), ineffective, and broadly duplicative of other requirements. While notifying parents when a student misses class repeatedly is important, the mandate does little to increase parental involvement or reduce dropout rates. Rather than lead to substantive interaction between educators and parents, the mandate simply requires districts to send a form letter to parents when a student is truant, which the state reimburses at a rate of approximately $17 per notification. In general, educators believe a form letter is neither sufficient to increase parental involvement nor as effective as a phone call. Beyond the ineffective and inefficient implementation of these mandates, federal accountability policies require schools serving low–income families to develop detailed plans for increasing parent involvement. This federal requirement directly targets students at risk of dropping out, whereas the state’s truancy mandates often fund affluent districts with very low dropout rates.

Eliminate Other Mandates While Preserving Core State Policies

For some mandates, we recommend eliminating required activities while still preserving important state policies underlying the mandate (see Appendix C). In these cases, in our view, the core state policies add significant value to the education system. Relatively simple changes to statute, however, often can drastically reduce the cost of the mandate without removing these fundamental requirements. The high costs of the mandates typically stem from quirks in the mandate process. For example, requiring students to take two, rather than one, science class in order to graduate from high school now costs upwards of $200 million annually. Through a simple change to statute, the same requirement could be preserved at no cost to the state by clarifying that districts need to provide the additional science class as part of their regular course of study, which virtually all of them now do. (As discussed in the box below8, another mandate involving behavioral interventions for students with disabilities also could be reformed using this approach.)

Behavioral Intervention Plans Mandate Should Be Eliminated Through Work Group A mandate related to Behavioral Intervention Plans (BIPs) for students with disabilities, which could add significantly to ongoing state costs, is currently involved in litigation. We recommend eliminating this mandate because federal special education laws now largely overlap with state laws. Under state law, if a student with a disability exhibits behavior that impedes his or her Individualized Education Plan, school districts are required to perform three primary activities: (1) assess the student’s behavior using a “functional analysis assessment,” (2) implement a plan for addressing the behavior (the BIP), and (3) ensure teachers are properly trained to perform BIPs. After state laws and regulations were adopted, the federal government essentially chose to require the same primary activities (see figure below, which highlights federal regulations related to IDEA generally and BIPs specifically). As a result of the new changes in federal law, IDEA funding likely could be used to implement most, if not all, desired BIP activities. New Federal Requirements Offer Sufficient Protection Topic Federal Rules and Regulations Functional Analysis Assessments The IDEA “requires the public agency to ensure that the child is assessed in all areas related to the suspected disability...If a child’s behavior or physical status is of concern, evaluations addressing these areas must be conducted.” Behavioral Intervention Plans The IDEA “emphasizes a proactive approach to behaviors that interfere with learning by requiring that, for children with disabilities whose behavior impedes their learning...the IEP team consider...the use of positive behavioral interventions. This provision should ensure that children who need behavior intervention plans to succeed in school receive them.” Related Professional Development The IDEA requires the state “to ensure that personnel are appropriately and adequately prepared and trained...(IDEA) specifically focuses on professional development for teachers and other school staff to enable such personnel to deliver scientifically based academic and behavioral interventions and provide educational and behavioral evaluations, services, and supports.” Given the high degree of overlap among state and federal law, most state BIP requirements could be eliminated with minimal impact on students. Nonetheless, given this mandate involves issues related to student safety, we believe the state should use heightened care when repealing state requirements that duplicate federal law. Specifically, we recommend creating a work group that includes special education experts to make recommendations for revising associated state laws and regulations. The work group could help ensure new federal requirements are implemented effectively and state requirements are rolled back carefully, such that important existing protections for students and districts are not undermined.

Refine and Implement New Reconsideration Process

To help preserve certain policies while reducing costs, we also recommend the state establish a new mandate reconsideration process. Toward this end, CSM already has proposed a new process for how mandates impacted by changes in legal precedent, fact, or circumstance could be reconsidered. While our office has some concerns with specific components of CSM’s proposal (particularly with provisions disallowing reconsideration after a set number of years), CSM’s general approach addresses the court’s concerns. With a few refinements, we recommend the Legislature adopt this reconsideration process. Establishing a new reconsideration process would mean the state could reduce mandate costs in the event a court finds that certain types of activities are no longer reimbursable.

Reduce Cost of Collective Bargaining Using New Reconsideration Process. As our office has argued in the past, collective bargaining laws now largely apply both to public and private organizations, which means most of the state’s education collective bargaining requirements should not be a reimbursable mandate. By requesting CSM to reconsider this mandate, which was originally decided before CSM even existed, we believe the commission will find most bargaining requirements not to be reimbursable. This action would significantly reduce costs while preserving current bargaining requirements.

Use a Hybrid Approach for Remaining Mandates

For some mandates, there are a mix of requirements that, based on our review, should neither be funded nor eliminated in their entirety. In these cases, we recommend the state consider the merits of each activity required by the mandate and fund or eliminate it accordingly (see Appendix D). This hybrid approach allows the state to preserve important policies while reducing costs and relieving school districts from performing unnecessary activities. For example, the state now requires schools to inform parents annually of certain information. Some of this information, such as the right of students to take necessary medications during the school day and receive support from staff, is important for families to know. Other information, however, is unnecessary, overly costly to provide, or would be provided even in the absence of a mandate. Much of the cost associated with annual parent notifications, for instance, is generated by the requirement that districts include the complete text of their sexual harassment policies in the notification. Rather, the state could require districts to inform parents generally of sexual harassment policies and of their right to obtain a complete copy by request. As shown in Appendix E, simple changes like these would have little to no impact on students while significantly reducing the cost of these mandates.

Mandates Completing the Determination Process This Year Could Be Included in Reform Package

Chapter 1124, Statutes of 2002 (AB 3000, Committee on Budget), requires the LAO to review each mandate included in CSM’s annual report of newly identified mandates. Since our last review, three new education mandates have been identified by CSM. We recommend the following approaches on these provisions:

• We recommend eliminating expanded hearing costs for students mandatorily expelled from school. As indicated earlier in the report, we recommend leaving offenses that now result in a mandatory expulsion to a school district’s discretion, an approach that would automatically eliminate these expanded hearing costs.
• For a new mandate involving reporting requirements placed on school districts and community colleges related to the California State Teachers’ Retirement System, we recommend a hybrid approach (as described in Appendix D and Appendix E).
• Lastly, one mandate involving the state’s Norm Referenced Test (NRT) that recently completed the entire CSM process is no longer claimable because the NRT was eliminated during the 2008–09 school year.

State Should Develop Long–Term Plan For Reducing Backlog of Unpaid Claims

Given the Legislature is essentially limited to reforming mandates on a prospective basis, the state will likely have to pay for the vast majority of prior–year mandate claims. We recommend a two–tiered approach to paying down this backlog over time. First, the state should schedule out annual payments until the debt is retired. The annual obligation, however, should not be so large as to create an undue burden on the K–14 budget but should still constitute enough to pay down the debt slowly over time. Second, the state should use any unanticipated Proposition 98 revenues received at the end of a fiscal year to accelerate payments such that the backlog could be retired more quickly.

Conclusion

Continuing to defer mandate costs while avoiding substantive mandate reform has several negative consequences. For school districts and community colleges, deferral means still having to perform hundreds of activities, which are often of little benefit to students, even amid steep budget cuts. Mandates also allow districts and community colleges without justification to claim very different amounts for performing the same activities. For the state, deferral means the debt owed to schools will grow steeply and, without substantive reform, most mandated policies likely will continue to be implemented ineffectively and inefficiently.

We recommend comprehensively reforming K–14 mandates. If a mandate serves a purpose fundamental to the education system, such as protecting student health or providing essential assessment and oversight data, it should be funded. If not, the mandate should be eliminated. Taken as a whole, our reform package would relieve school districts and community colleges of performing hundreds of activities that provide little value to students while providing them with adequate and timely compensation for the activities still required of them. In addition, comprehensively reforming mandates would reduce the state’s annual obligations by more than $350 million—funds that could be saved or allocated to districts for higher priorities.

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Appendix