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U.S. Said Not Fully Liable for Chicago Funding

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The U.S. Court of Appeals for the Seventh Circuit, finding that a federal district judge had misinterpreted a 1980 consent decree, ruled last week that the federal government is not obliged to pay the Chicago public schools $103.8 million in school-desegregation aid this year and similar amounts in subsequent years.

The decision, according to Chicago school officials, will result in cuts in programs and staff.

The three-judge appellate panel found that the consent decree does not require the federal government to lobby the Congress for desegregation funds for the city but only requires that school system receive "top-of-the-line priority" for funds from Education Department accounts that can be used for desegregation purposes.

The two sources of funds cited in the opinion are the Title IV program under the Civil Rights Act of 1964 and the Secretary of Education's discretionary fund.

The federal government had appealed U.S. District Judge Milton I. Shadur's finding that the 1980 consent decree bound it to a specific funding program for Chicago's desegregation plan. (See Education Week, Aug. 22, 1984.)

The appeals panel sent the case, U.S. v. Board of Education of the City of Chicago, back to federal district court, but not to Judge Shadur. It directed the district court to determine whether the school system is receiving "the maximum level of funding" available under current programs.

The appeals court also said that Judge Shadur had erred in charging that the government had acted in bad faith when it refused to fund the city's desegregation programs directly. The panel did say, however, that the executive branch's attempts to limit funds available to Chicago's schools "could be interpreted to contravene the spirit of the decree."

Lawyers for the Chicago schools said they were studying the decision, which was handed down last Wednesday, and would have no comment regarding a further appeal for several days.

According to a spokesman for the Chicago board of education, $20 million will be cut from the school system's $90-million desegregation budget in the current school year as a result of the appeals court's decision. Robert Seigh, the spokesman, said the cuts would not target specific programs but "would be spread throughout the desegregation effort."

Nelvia Brady, associate superintendent for equal educational opportunity, said that district officials were "considering a lot of different possibilities" to reduce the desegregation budget. She said the cuts6would affect both staff and programs.

In an order in August, Judge Shadur had said that the cost to the Chicago schools of fully implementing the desegregation plan in the 1984-85 school year was $171.6 million; he ruled that the federal government's share was $103.8 million.

'Unreasonable' Result

The appellate panel held that if the government were compelled to pay its full share, as determined by Judge Shadur, "no federal desegregation money would have been available to other school districts." Such a result, it said, "would have been unreasonable."

The panel said it was satisfied by the government's assurances that the Chicago schools will receive special, "top-of-the-list priority" consideration in the quest for desegregation dollars. It suggested that for the government to honor its "duty to search among funds that Congress has indeed made ... available," it should assign personnel to review funds in the Education Department and other agencies that might be used for Chicago's desegregation plan.

Efforts such as these satisfy the consent decree, the appeals court held, adding, "We find no indication that the parties had any federal funding in mind other than programs that could be used, consistent with the intent of Congress, to fund school desegregation efforts."

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