Ga. High Court Backs Charters Against APS
A state Supreme Court that just two years ago ruled in favor of local school boards fighting against charter school advocates on Monday was unanimous in siding against Atlanta Public Schools in a dispute with its charter schools.
At issue was about $550 million owed to APS' employee pension fund. When the school system announced last year that it would take some of the money it had been expected to send to individual schools and instead put it into the pension fund, the charter schools cried foul.
On Monday, the Georgia Supreme Court said the charter schools were correct that a state statute that sets the charter school funding formula does not allow APS to reduce the charter schools' distribution based on the pension liability.
Lawyers on both sides of the case said the ruling may have little impact beyond APS' particular fight with its charter schools. But of note is a brief concurring opinion by Justice David Nahmias. He suggested that the court's ruling in the APS dispute may be somewhat at odds with the court's 2011 ruling striking down a state commission that could approve charter schools even when local school boards opposed them.
APS' pension shortfall dates back to at least the 1980s, when significant amounts of money were transferred from the city of Atlanta's general employee pension plan as a condition of APS teachers joining the state Teachers Retirement System, according to a brief filed by APS. Some teachers who were employed at the time of the transition, as well as other school employees, continued to participate in the city's pension plan, and the APS plan remained underfunded for years.
In May 2012, the school system announced it planned to give $38.6 million to the pension fund before distributing its revenue for the fiscal year to all of its schools—traditional and charter. The net impact on the charter schools altogether was a loss of about $2.8 million for the 2012-2013 school year.
In August 2012, a group of charter schools sued APS in Fulton County Superior Court seeking to force the school system to distribute its local revenue without the reduction. They pointed to Georgia's Charter Schools Act of 1998, which establishes the formula for distribution of local funds to charter schools.
Fulton Superior Court Judge Wendy Shoob ruled in the charter schools' favor, ordering the school system to disburse the amounts it had withheld from its local revenue. The judge ruled that the statute's formula does not allow the subtraction of the $38.6 million from the money to be distributed to charter schools.
The Atlanta school system appealed to the Georgia Supreme Court. It argued that because the state statute was silent as to how system-wide expenses, such as APS' unfunded pension liability, may be assessed against charter schools, APS was allowed to deduct the expense in determining the distribution to charters. APS pointed to language in the statute that said "local revenue shall be allocated to a local charter school on the same basis as for any local school." The school system estimated that, were Shoob's ruling to stand, each student enrolled in the charter schools would generate about $900 more in local revenue for her charter school than a student who attends a traditional APS school, a disparity that would continue to grow over time even if APS approves no new charter schools.
APS also pointed to the state Supreme Court's 4-3 decision in the 2011 case, Gwinnett County School District v. Cox, for the idea that the state constitution gives local boards of education exclusive control over K-12 public schools.