With all the money it gets to address the special needs of its students, the West Contra Costa school district seems lucky.

Its students fall into so many special categories that West Contra Costa actually gets more public funding per student than most in Contra Costa County. But teachers and administrators say the rules attached to all that state and federal help can be crippling and costly.

All California districts cope with some restrictive programs, which range from Gifted and Talented Education and the wildly popular K-3 class-size reduction effort to teacher training and special instruction for kids learning English.

"In Sacramento, all the various senators have their pet projects, but they can't add their name if they're just adding money to schools' general funds," says Paula Goodwin, former president of the Education Foundation of Orinda. "They need to wipe the (funding) slate clean and start from scratch. ... But people are afraid."

Leveling playing field

District officials have long complained that too much of their money is tied up in special programs. They finally may have found a willing listener in Gov. Arnold Schwarzenegger, who has proposed shifting some of the funding into less restrictive block grants.

In the case of class-size reduction, which began in 1996, most districts find the extra state funding doesn't cover the full salaries of the additional teachers the program requires. Livermore actually decided this year to forgo the funding and let elementary class sizes grow in all but first grade because it no longer could afford to supplement the state money.

In West Contra Costa, Toni Oklan-Arko, the district's state and federal programs director, offers the example of federal money for teaching English to students who don't speak it fluently. Because districts may spend no more than 2 percent of that money -- $14,716, in West Contra Costa's case -- on running the program, they must take money away from other programs. Coordinating West Contra Costa's $735,825 program actually takes the equivalent of one full-time staffer plus more than $3,400 for materials and mailings to parents, Oklan-Arko says.

The problem is multiplied dozens of times over in West Contra Costa, where more than 100 restricted programs are funded in part by $73 million in state and federal money.

Many of these programs began in the 1960s in an attempt to raise students who come to school with less preparation and support to the same basic level as other students.

"The federal government realizes that they need extra attention before they enter the mainstream educational process," says Jorge Lerma, principal at Grant Elementary School in Richmond, where nearly 70 percent of students need help learning English.

"So, through this program, we're able to provide them with tutors, specialized curriculum and materials," Lerma says. "We also hire additional teachers and teachers' aides."

New rules needed

Most special programs work, Lerma says, but some amount to "just throwing money at a problem" and don't resolve inequities.

Managing restrictive programs can be hard, even without additional costs, Oklan-Arko says.

"The very first challenge is being able to meet all the mandates that come with the categorical programs," Oklan-Arko said. "Although it's wonderful to receive all these funds to level the playing field for some children, there may be additional strings attached."

Assemblyman Guy Houston, R-Livermore, says the system needs reform.

"Categorical funding unevenly distributes funds, sustains outdated and unproved programs, and exerts little or no oversight to ensure programs are meeting their intended purpose," Houston says.

Sometimes, he says, the funding rules also make it hard for a district to address its greatest needs. For example, a district with lots of experienced teachers but little funding flexibility, such as Livermore or West Contra Costa, will need more help buying textbooks than training teachers. Yet only the training money may be available.

"I think you should let local school boards make decisions on what is best for them," Houston says, "and not let people in Sacramento make those decisions."

In contrast, the San Ramon Valley school district this year received restricted funds to purchase books it does not need. It needs funds to hire counselors but that's not available.

Governor's solution

The matter of how categorical funding hamstrings districts is coming to a head in Schwarzenegger's budget proposal for 2004-05, which recommends giving school districts discretion over some categorical money. The programs he chose do not involve students with special needs. They include funding for year-round education, transportation and instructional materials.

The governor would redirect $2 billion in funding from 22 categorical programs into districts' general spending, enabling them to choose how they use the money.

In theory, says Oklan-Arko, block grants sound good, but using them to fund basic programs isn't a surefire fix. Shifting categorical programs to block grants may not work for teachers, says Terri Jackson, president of the United Teachers of Richmond, the West Contra Costa union. She says district officials may cut programs that teachers who know the students best find critical.

There is widespread agreement that something needs to change so that districts can use the money available.

"The sad thing is if they don't spend the money, then it goes away," Houston says.