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U.S. Found To Owe Millions for Chicago Desegregation

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Washington--A federal judge in Chicago, harshly criticizing the Reagan Administration, ruled last week that the federal government owes the Chicago Board of Education up to $15 million in desegregation-related funds annually for the next several years under a 1980 consent agreement.

The ruling is a new setback for Administration officials in their three-year dispute with the Chicago school system over the extent to which they are bound by the agreement to help fund the city's desegregation program.

U.S. District Judge Marvin E. Aspen said the Administration had "violated the letter as well as the spirit" of the agreement, negotiated during the Carter Administration to end a long-running desegregation suit. Endorsed in 1981 by the Reagan Administration, the plan does not include forced busing to achieve racial balance.

Federal officials probably will seek to delay implementation of Judge Aspen's ruling pending an appeal, according to Marie Robinson, a spokesman for the Education Department.

Undersecretary of Education Gary L. Bauer, in a statement, "categorically" denied the charge that the government had failed to abide by the consent decree.

Bob Saigh, a spokesman for the Chicago Board of Education, acknowledged that the ruling marks only one step in a case that began in 1983, when another federal judge held that the government was not living up to its financial obligations under the agreement. The "process of dispute resolution continues to fail remarkably in this case," Judge Aspen observed.

The U.S. Supreme Court earlier this year refused to resolve the dispute; the U.S. Court of Appeals for the Seventh Circuit has heard arguments twice in the case, and it has now been overseen by two district-court judges. In addition, it tied up some Education Department funds for more than a year, under a "freeze" imposed by the original judge in the case.

"We are guarded in our optimism" that the case is nearing completion, said Mr. Saigh. Robert Howard, a lawyer representing the board, said that a hearing before Judge Aspen next week could disclose when or whether the city can expect to receive extra federal assistance.

Issues Addressed

The consent decree requires Chicago and the federal government to "make every good-faith effort to find and provide every available form of financial resources adequate for implementation of the desegregation plan."

The circuit court said last fall that for the federal government to satisfy the decree, it need only give Chicago "top-of-the-list" consideration for desegregation dollars and assign personnel "to search among funds that Congress has indeed made ... available" for desegregation.

In last week's ruling, Judge Aspen said the federal government had failed on both counts. He identified programs under which Chicago should receive top priority for funding and recommended some funding levels. And he denied the Administration's assertion that it was constrained by grant-making procedures even in those programs.

Judge Aspen recommended that Chicago annually receive $2.5 million to $3 million in Title IV funds for civil-rights technical assistance; $1.25 million to $1.5 million from the Secretary of Education's discretionary fund; about $1 million from Follow Through, and a share--to be determined at a later date--of $8 million in bilingual-education money and of the $19.4 million in unspent Education Department money from fiscal years 1983 and 1984.

The judge noted that Chicago will also receive a $4-million federal magnet-school grant, the maximum possible under the law.

Mr. Howard estimated that the school system could receive about $12 million this year and up to $15 million in subsequent years under the ruling.

Other Sources Cited

Judge Aspen also ruled that Chicago is eligible for desegregation-related funds from all federal agencies, not just the Education Department.

He further condemned the department for failing to make a "good-faith effort to find" all resources available to Chicago and for approving the Illinois Chapter 2 plan that did not direct extra funds to the city.

The appeals court last fall had overruled a decision by District Judge Milton I. Shadur, who found that the government's financial liability amounted to nearly $104 million per year for an unspecified number of years.

Judge Aspen told the two sides to submit papers on how unresolved aspects of the ruling should be settled. The issues include funding; the disposition of the bilingual-education money; and whether the government acted in bad faith in failing to comply with the consent agreement.

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