An Update on the Provision of Educationally-Related Mental Health Services Transition of the AB 3632 Program

History of the AB 3632 Program

Federal IDEA  Federal Individuals with Disabilities Education Act (IDEA): any state receiving federal educational funding must ensure that all students receive a “free and appropriate public education” (FAPE).  Students with disabilities are entitled to receive all services necessary to allow them to benefit from public education.  For students with mental-health-related disabilities, the services to which they are entitled often include educationally-related mental health services.

AB 3632  Prior to 1984, school districts were responsible for provision of all services under the IDEA, including mental health services.  In 1984, the state legislature enacted AB 3632, which mandated that counties provide IDEA-related mental health services to students.  Because this was a new and unfunded mandate, a county filed a “test claim” with the Commission on State Mandates.  The Commission held that counties were entitled reimbursement by the State for any costs incurred in providing these services.

AB 3632 (cont’d)  Over the past decade, the state consistently failed to comply with its obligation to reimburse counties for costs incurred in complying with this and other state mandates.  In 2004, California voters passed Proposition 1A, which amended the state constitution to require that the state either fully reimburse local governments for mandated costs, or suspend the mandate.  Since the passage of Prop 1A, the state has reimbursed local governments for all mandated programs except the AB 3632 program.  For this program alone, the State owes counties over $400 million for past years’ mandate claims.

Suspension of the AB 3632 Mandate  In the FY state budget, the Legislature appropriated approximately $133 million to pay counties for costs related to the AB 3632 program.  On October 8, 2010, then-Governor Schwarzenegger vetoed this appropriation and declared the AB 3632 mandate “suspended.”  Several lawsuits resulted from this veto.

AB 3632 Lawsuits  Counties sued the state seeking a declaratory judgment that the mandate had been suspended by the state’s the failure to appropriate funds to reimburse counties. The counties prevailed.  The California School Boards Association also filed a lawsuit against the state challenging the Governor’s authority to suspend the AB 3632 mandate. The state prevailed.  The bottom line: Both courts held that the mandate pursuant to which counties were required to provide educationally-related mental health services had been suspended.

Through the FY State budget, the Legislature permanently repealed the law mandating that counties provide mental health services to special education students. Local Education Agencies are now responsible for provision of and payment for mental health and residential services provided under the IDEA. Permanent Repeal of AB 3632

Legislative Action Related to AB 3632  AB 114 permanently repealed the AB 3632 mandate  Existing federal and remaining state laws make LEAs responsible for complying with the federal IDEA.  SB 87 allocated $98.6 M in one-time MHSA-funds (from AB 100) to counties to provide IDEA-related mental health services in fiscal year  LEAs must contract with counties to access these funds.

Legislative Action Related to AB 3632  SB 87 provides LEAs with federal IDEA funds and Prop 98 state funds to provide mental health and out-of-home residential services for emotionally disturbed pupils.  SB 87 allocates $800,000 in federal IDEA funds to California Department of Education to assist SELPAs/LEAs with transitional activities:  Minimize disruption, identify best practices, strengthen linkages between mental health and education, create work groups on accountability and outcomes, involve public stakeholder process.

What Does this Mean for Counties?  The permanent repeal of the AB 3632 mandate has removed one of counties’ major annual funding struggles with the State.  Counties are still owed over $400 million for past years’ mandate claims for this program alone.  Counties must work with districts to transition provision of educationally-related mental health services to special education students.

What Does this Mean for Counties?  Many counties will likely continue to provide these services under contracts with school districts because:  Counties possess necessary expertise and infrastructure to provide these services.  Counties can draw down Medi-Cal and other funds to offset the costs associated with provision of these services.

What Does this Mean for Counties?  County mental health departments continue to be responsible for providing mental health services to EPSDT (Medi-Cal) beneficiaries.  County mental health departments will receive a share of MHSA funds in on a one-time basis, and schools may contract with counties to use funds to provide educationally-related mental health services.  Any additional role a county mental health department plays in providing educationally-related mental health services will be undertaken pursuant to contractual agreements with local school districts.

Students’ Rights to Services  Students’ rights under the IDEA have not changed. Students still have the right to receive educationally- related mental health services where such services are included in their Individualized Education Plan (IEP).  The California Department of Education and Local Education Agencies are responsible for ensuring provision of all services to which students are entitled under the IDEA.  LEAs can work with county mental health departments to provide IEP-related services to students. Alternatively, they can provide the services themselves, or contract with other mental health providers.

What is happening in Santa Clara County?  Fiscal Year :  In the wake of the veto, many counties unilaterally terminated services. We continued providing them.  Now that it is clear school districts are responsible for reimbursing counties for costs incurred providing these services during FY 10-11, the MHD is in the process of billing school districts for these costs.  Before billing districts, the County offsets its costs by any available revenues (e.g. Medi-Cal reimbursements).  Funds the SELPAs received from the state under SB 70 will cover the majority of the County’s costs for FY

What is happening in Santa Clara County?  Fiscal Year :  The MHD entered into a Master Agreement with all but one school district in the County under which districts can refer students to the MHD for provision of IEP-related mental health services.  We are hopeful that the AB 100 funds will cover all unreimbursed expenses for FY  Future years:  The MHD hopes to collaborate with school districts to create a system that works well for all parties involved.  Our shared goal is that all students are provided with high- quality, cost-effective educationally-related mental health services.