Negotiations Over Funding for Special Education Collapse

SACRAMENTO —  Negotiations with the governor broke down Thursday over as much as $1.9 billion that local school districts say they are owed for special education services.

Though Gov. Gray Davis’ representatives in the talks insist that they have not given up, school representatives say complete rejection of their first compromise offer leaves them with nothing more to say.

“There is a significant gap--from their zero to our tens of millions,” said Ken Hall, a financial consultant for districts statewide.

Davis’ office, on the other hand, said the schools’ offer was still well above $1 billion, which spokesman Michael Bustamante described as “just extraordinarily high.”

That said, he added that Davis does not consider the negotiations over and would like to “find a way to bring closure to this.” In a fat budget year such as this one, others said, a middle ground could still emerge.

But Thursday morning, discouraged school representatives officially declared before the Commission on State Mandates that they were at an impasse. The commission, an obscure but powerful board charged with determining when the state has not paid for services it required of local jurisdictions, agreed to take up the issue at the end of May.

After an appellate court ruling in the schools’ favor, the commission had previously voted in favor of reimbursing districts for expenses ranging from the cost of extending the school year for special education students to expenditures for schooling them until they turn 22.

Then, on the eve of setting up a mechanism for districts to begin claiming the money, the commission’s chairman--state Treasurer Phil Angelides--announced that the governor had agreed to come to the bargaining table.

Because they were expecting the state to appeal the court ruling, Davis’ action was an encouraging sign for school districts. They had fought past administrations over the issue for two decades.

Since Angelides’ announcement, there have been at least nine meetings, which both sides have described as amicable and informative.

If the negotiations really have failed, Angelides said, the matter will ultimately land back in the court system and “who knows what the results will be.” He encouraged both parties to resume discussions during the two months before the commission’s hearing.

“I think we’ll know in the next 60 days whether a deal can be made,” Angelides said. “I’m no Pollyanna . . . [but] it’s not over until it’s over.”