From the NY Times:
. . . . In the ruling Monday, the appeals court sent the suit back to the lower court, arguing that a passage of the Constitution known as the spending clause requires Congress to give states clear notice of their financial liabilities when they accept federal financing that may fall short of the full costs of complying with requirements from Washington.
“Because we conclude that N.C.L.B. fails to provide clear notice as to who bears the additional costs of compliance, we reverse the judgment of the district court,” the ruling said. It also noted that because the states had been required to spend state and local money to meet requirements of the federal law, their “injury has already occurred and is ongoing.”
David B. Cruz, a law professor at the University of Southern California, said the ruling could leave the district court judge little choice but to rule in favor of the districts and the union.
But the Bush administration could also appeal to the Supreme Court, and Ms. Spellings left open that possibility.
“The federal government is exploring all legal options available,” Ms. Spellings said in a statement Monday. “This decision could undermine efforts to improve the education of our nation’s children, in particular those students most in need.”
Reg Weaver, president of the National Education Association, said the ruling “indicates that if the federal government hands down programs, it’s their responsibility to pay for them, so that’s a victory for the students of America.”