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“The Legislature has broad authority to determine how it will pay for existing mandates, and neither article XIII B, section 6 of the Constitution nor the separation of powers dictates that additional revenue is the only way the Legislature can satisfy its mandate obligations.” The December 19^th decision from the California Supreme Court authored by Justice Liu will permit the State to avoid providing reimbursement for new or expanded state-mandated programs and services by requiring local agencies to use existing state funds they receive (sometimes for other purposes) first to pay for the mandates.

In California School Boards Association v. State of California, an association of school boards (CSBA) challenged two statutes adopted by the Legislature in 2010 during an economic recession. The statutes designated previous education funding that was not intended for mandates as restricted funding at the beginning of the next fiscal year to satisfy the state’s obligation to reimburse school districts for two mandates deemed reimbursable by the State Mandates Commission.

CSBA filed suit, arguing that the two statutes violate the California Constitution. CSBA argued that under the challenged “pay first” statutes, there are no reductions in state mandate obligations that would result in net revenue increase, nor is there new funding provided for the cost of the mandate. The Superior Court denied the CSBA petition, and the Court of Appeal affirmed, stating that the State may direct local agencies to pay for the mandate(s) first with existing State funding, which provides offsetting revenue that eliminates the need for additional mandate reimbursements.

CSDA participated in the case on behalf of special districts by participating in an amicus brief to the California Supreme Court filed in October 2018. Joining the League of California Cities and California State Association of Counties, CSDA argued that the California Constitution requires the State to make local agencies whole for new or expanded programs or services mandated by the State, and that the challenged statutes do not meet this standard. Unfortunately, the California Supreme Court sided with the State, and affirmed the lower court decisions.