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October 22, 2010

Impact of Governor's veto of AB 3632 funding

On October 8, 2010, the Governor line item vetoed approximately $133 million from the state budget, monies designated for students’ mental health services under the state law known as the AB 3632 program.  While the Governor’s action was an authorized veto of an appropriations item under the law, it cannot serve as a proper suspension of a statutory mandate, which only the state Legislature can do.

Background

In signing the 2010-11 Budget Bill (SB 870) on October 8, 2010, Governor Arnold Schwarzenegger vetoed $963 million in General Fund spending that had been approved by the Legislature, including a deletion of approximately $133 million in funding for the 1984 state program known as the AB 3632 mandate (Chapter 26.5 of Division 7, Title 1, California Government Code) to county mental health departments to provide mental health services for eligible special education students.  The Governor “declared” in his veto message that the mandate is suspended for 2010-11.  This purported action, if legally sound, would mean that responsibility for provision of these mental health services to students with individualized education programs (“IEP”) would fall back onto local educational agencies (“LEA”), namely school districts. 

On October 12, 2010, the County Mental Health Directors Association (“CMHDA”) sent out a memorandum regarding the Governor’s veto of AB 3632 funding.  While the CMHDA indicated it would further analyze the impact of the Governor’s veto from a programmatic and legal perspective, it set out some options for local county mental health offices to consider in the interim, ranging from ceasing to accept any new referrals for AB 3632 services to reviewing whether any current AB 3632–eligible students could receive mental health services outside of the IEP process, if eligible for Medi-Cal funding.

On October 15, 2010, the California Department of Education’s Special Education Director sent correspondence to special education directors and other interested parties across the state reminding them that under the federal Individuals with Disabilities Education Act (“IDEA”), if an agency other than an LEA fails to provide or pay for the necessary special education and related services for an eligible student, then the LEA must provide or pay for these services in a timely manner. 

Various local county mental health offices have taken the position that the AB 3632 mandate has been suspended and, accordingly, they are no longer required or authorized to continue provision of mental health services to eligible students.

Analysis

Under the California Constitution, for costs incurred in a preceding fiscal year as a result of a state mandated program, the Legislature “shall either appropriate, in the annual Budget Act, the full payable amount that has not been previously paid, or suspend the operation of a mandate for the fiscal year for which the annual Budget Act is applicable in a manner prescribed by law.”  (Cal. Const., art. XIIIB, § 6(b)(1).) Here, the Legislature appropriated nearly $133 million to reimburse county agencies for mandated costs related to their provision of mental health services to special education students as required under AB 3632.  The Governor then vetoed that appropriations item before signing the Budget Act for the 2010-11 fiscal year.  While the Governor’s ability to line item veto an appropriations bill is established in the law, the California Supreme Court recently held that a governor’s line item veto power under the California Constitution does not equate to a power to legislate.  (St. John’s Well Child and Family Center v. Schwarzenegger (Oct. 4, 2010) __ Cal.Rptr.3d __ 10 Cal. Daily Op. Serv. 12,834, [2010 WL 3835242].)  Despite the Governor’s declaration that he is suspending the AB 3632 mandate, the authority to suspend a mandate is provided to the Legislature, calling into question the Governor’s authority to properly suspend or repeal the operation of a mandate for the fiscal year.  (Cal. Const., art. XIIIB, § 6(b)(1).)  Absent an affirmative action by the California Legislature to suspend the AB 3632 mandate, there is no existing statutory or other legal scheme by which a governor’s proposed declaration or expressed intent to suspend a mandated program can equate to a legally sound suspension of the mandated program, even where the governor has vetoed the funding.

Impact

The elimination of AB 3632 funding in the current Budget Act has significant repercussions which are currently being played out.  Local county mental health departments are insisting that because they are no longer mandated to provide mental health services to special education students, they will not continue as members of an eligible student’s IEP team or as service providers under a student’s IEP.  School districts have been left to determine how they, as the responsible LEA, will ultimately provide or pay for the services if the county mental health offices abdicate their statutory obligations.  In the absence of any further clarification of the legal effect of the Governor’s veto, or any legal action, LEAs should continue to work with local county mental health offices to ensure an uninterrupted provision of necessary mental health services (including initial referrals) under eligible students’ IEPs and may need to take preventative measures to ensure alternate resources are procured as well.  Because it is highly questionable whether the AB 3632 mandate has, in fact, been properly suspended, school districts should carefully evaluate with their legal counsel, their rights, obligations and remedies under any applicable interagency agreements with the county. We understand some legal challenges may be forthcoming and we will continue to keep you on top of this critical issue.

DANNIS WOLIVER & KELLEY
Special Education and Students Practice Group 
 


Dannis Woliver Kelley Bulletins provide general information about events of current legal importance; they do not constitute legal advice.  As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary.  We do not recommend that you act on this information without consulting counsel.