Long Beach Unified Sch. Dist. v. State of California
| Decision Date | 15 November 1990 |
| Docket Number | No. B033742,B033742 |
| Citation | 275 Cal.Rptr. 449,225 Cal.App.3d 155 |
| Parties | , 64 Ed. Law Rep. 182 LONG BEACH UNIFIED SCHOOL DISTRICT, Plaintiff and Respondent, v. STATE of California et al., Defendants and Appellants; Mark H. Bloodgood as Auditor-Controller, etc. et al., Defendants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
John K. Van de Kamp, Atty. Gen., N. Eugene Hill, Asst. Atty. Gen., and Henry G. Ullerich and Martin H. Milas, Deputy Attys. Gen., for defendants and appellants.
Joseph R. Symkowick, General Counsel, Joanne Lowe, Staff Counsel, Sacramento, for defendant and appellant.
De Witt W. Clinton, County Counsel, and Lawrence B. Launer, Asst. County Counsel, for defendants and respondents.
Ball, Hunt, Hart, Brown and Baerwitz, Anthony Murray, Los Angeles, Allan E. Tebbetts, Agnes H. Mulhearn, Long Beach, and Ross & Scott, William D. Ross, Los Angeles, Corin L. Kahn, Sacramento, and Diana P. Scott, Los Angeles, for plaintiff and respondent.
Long Beach Unified School District (LBUSD) filed a claim with the Board of Control of the State of California (Board), asserting that certain expenditures related to its efforts to alleviate racial and ethnic segregation in its schools had been mandated by the state through regulations (Executive Order) issued by the Department of Education (DOE) and were reimbursable pursuant to former Revenue and Tax Code section 2234 and article XIII B, section 6 of the California Constitution. The Board eventually approved the claim and reported to the Legislature its recommendation that funds be appropriated to cover the statewide estimated costs of compliance with the Executive Order. When the Legislature deleted the requested funding from an appropriations bill, LBUSD filed a petition to compel reimbursement (Code Civ.Proc., § 1085) and complaint for declaratory relief. The trial court held that the doctrines of administrative collateral estoppel and waiver prevented the State from challenging the decisions of the Board, and it gave judgment to LBUSD. It also ruled that certain funds previously appropriated by the Legislature were "reasonably available" for reimbursement of the claimed expenditures, subject to audit by the state Controller.
We conclude that the doctrines of collateral estoppel and waiver are inapplicable to the facts of this case. However, we determine as a question of law that the Executive Order requires local school boards to provide a higher level of service than is required either constitutionally or by case law and that the Executive Order is a reimbursable state mandate pursuant to article XIII B, section 6 of the California Constitution. We also decide that former Revenue and Tax Code section 2234 does not provide reimbursement of the claim.
Based on uncontradicted evidence, we modify the decision of the trial court regarding which budget line item account numbers provide "reasonably available" funds to reimburse LBUSD for appropriate expenditures under the claim. We further modify the decision to include charging orders against funds appropriated by subsequent budget acts. Finally, we remand the matter to the trial court to determine whether at the time of its order unexpended, unencumbered funds sufficient to satisfy the judgment remained in the approved budget line item account numbers. The trial court must resolve this same issue with respect to the charging order.
The California "Property Tax Relief Act of 1972" (Stats.1972, ch. 1406, § 1, p. 2931) limited the power of local governmental entities to levy property taxes. It also mandated that when the state requires such entities to provide a new program or higher level of service, the state must reimburse those costs. Over time, amendments to the California Constitution and numerous legislative changes impacted both the right and procedure for obtaining reimbursement.
Sometime prior to September 8, 1977, LBUSD, at its option, voluntarily began to incur substantial costs to alleviate the racial and ethnic segregation of students within its jurisdiction.
On or about the above date, DOE adopted certain regulations which added sections 90 through 101 to title 5 of the California Administrative Code, effective September 16, 1977. We refer to these regulations as the Executive Order.
The Executive Order and related guidelines for implementation required in part that school districts which identified one or more schools as either having or being in danger of having segregation of its minority students "shall, no later than January 1, 1979, and each four years thereafter, develop and adopt a reasonably feasible plan for the alleviation and prevention of racial and ethnic segregation of minority students in the district."
On or about June 4, 1982, LBUSD submitted a "test claim" (Claim) 1 to the Board for reimbursement of $9,050,714--the total costs which LBUSD claimed it had incurred during fiscal years 1977-1978 through 1981-1982 for activities required by the Executive Order and guidelines. LBUSD cited former Revenue and Taxation Code section 2234 as authority for the requested reimbursement, asserting that the costs had been "subsequently mandated" by the state. 2
The Board denied the Claim on the grounds that it had no jurisdiction to accept a claim filed under section 2234. LBUSD petitioned superior court for review of the Board decision. (Code Civ.Proc., § 1094.5.) That court concluded the Board had jurisdiction to accept a section 2234 claim and ordered it to hear the matter on its merits. The Board did not appeal this decision.
On February 16, 1984, the Board conducted a hearing to consider the Claim. LBUSD presented written and oral argument that the Claim was reimbursable pursuant to section 2234 and, in addition, under article XIII B, section 6 of the California Constitution. DOE and the State Department of Finance (Finance) participated in the hearing. 3 The Board concluded that the Executive Order constituted a state mandate. On April 26, 1984, the Board adopted parameters and guidelines proposed by LBUSD for reimbursement of the expenditures. No state entity either sought reconsideration of the Board decisions In December 1984, pursuant to former section 2255, the Board reported to the Legislature the number of mandates it had found and the estimated statewide costs of each mandate. With respect to the Executive Order mandate, the Board adopted an estimate by Finance that reimbursement of school districts, including LBUSD, for costs expended in compliance with the Executive Order would total $95 million for fiscal years 1977-1978 through 1984-1985. The Board recommended that the Legislature appropriate that amount.
available pursuant to former section 633.6 of the California Administrative Code, 4 or petitioned for judicial review. 5
Effective January 1, 1985, the Commission on State Mandates (Commission) succeeded to the functions of the Board. (Gov.Code, §§ 17525, 17630.)
On March 4, 1985, Assembly Bill 1301 was introduced. It included an appropriation of $95 million to the state controller "for payment of claims of school districts seeking reimbursable state-mandated costs incurred pursuant to [the Executive Order]...." On June 27, the Assembly amended the bill by deleting this $95 million appropriation and adding a "finding" that the Executive Order did not impose a state-mandated local program. 6 On September 28, 1985, the Governor approved the bill as amended.
On June 26, 1986, LBUSD petitioned for writ of mandate (Code Civ.Proc., § 1085) and filed a complaint for declaratory relief against defendants State of California; Commission; Finance; DOE; holders of the offices of State Controller and State Treasurer and holder of the office of Auditor-Controller of the County of Los Angeles, and their successors in interest. LBUSD requested issuance of a writ of mandate commanding the respondents to comply with section 2234 (fn. 2, ante ) 7 and, in an amended petition, its successor, Government Code section 17565, and with California Constitution, article XIII B, section 6. 8 It further requested respondents to reimburse LBUSD $24,164,593 for fiscal years 1977-1978 through 1982-1983, $3,850,276 for fiscal years 1983-1984 and 1984-1985, and accrued interest, for activities mandated by the Executive Order.
The trial court let stand the conclusion of the Board that the Executive Order constituted a reimbursable state mandate and ruled in favor of LBUSD. No party requested a statement of decision.
The judgment stated that the Executive Order constituted a reimbursable state mandate which state entities could not challenge because of the doctrines of administrative collateral estoppel and waiver. It provided that certain previously appropriated State respondents (State) and DOE separately filed timely notices of appeal and LBUSD cross-appealed. 9
funds were " 'reasonably available' " to reimburse LBUSD for its claimed expenditures, applicable interest, and court costs. The judgment also stated that funds denominated the "Fines and Forfeitures Funds," under the custody of the Auditor-Controller of the County of Los Angeles, were not reasonably available. The judgment further decreed that the State Controller retained the right to audit the claims and records of LBUSD to verify the amount of the reimbursement award sum.
State asserts that neither the doctrine of collateral estoppel nor the doctrine of waiver is applicable to this case, the costs incurred by LBUSD are not reimbursable, and the remedy authorized by the trial court is inconsistent with California law and invades the province of the Legislature, a violation of article IV, section 4 of the United States Constitution.
The thrust of the DOE appeal is that its budget is not an appropriate source of funding for the reimbursement.
LBUSD has argued in its...
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