Monday, February 24, 2014

Court Holds That Charter Schools Can Tap Into School Districts' Rainy Day Funds

Ne raleighCaptureThe North  Carolina Court of Appeals has issued a set of decisions in companion cases dealing with charter schools' access to locally raised funds.  In Charter Day School, Inc. v. New Hanover County Bd. of Educ., 2014 WL 619562 (2014), and Northeast Raleigh Charter Academy, Inc. v. Wake County Bd. of Educ., 2014 WL 640976 (2014), charters schools alleged that they were underfunded for the past several years, relying on a North Carolina statute that provides, ā€œ[i]f a student attends a charter school, the local school administrative unit in which the child resides shall transfer to the charter school an amount equal to the per pupil local current expense appropriation to the local school administrative unit for the fiscal year.ā€ N.C. Gen.Stat. Ā§ 115Cā€“238.29H(b) (2007).  The Court of Appeals in both cases held that the charter school was entitled to a pro rata share of the local current expense fund of the school district in which they are located.  The local expense fund is, in effect, the district's rainy day fund.  Funds not spent in one year are saved there for a later date.  

This holding, while a reasonable interpretation of the statute, may create some awkward deliberations for school districts.  Regardless of whether they save or do not save money, charter schools' allotment is the same.  If the district decides to save, charter schools would get their money now, whereas traditional public schools would be deferring their funds.  Theoretically, it all evens out in the end, but the notion that a charter school down the street is getting funds for the current school year that traditional public school is not will not be received well by many.

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Thanks, Derek, for following up on this issue. The aspect of it I have seen concerns funding as it relates to services for children with disabilities and budget shortfalls due to allocations to charter schools. The Chester-Upland case in Pennsylvania illustrates the problem: Chester Upland School Dist. v. Pennsylvania, 284 F.R.D. 305 (E.D.Pa. 2012). Taking money away from non-charter schools is especially unfair if charters are not enrolling proportionate numbers of children who are expensive to serve adequately.

Posted by: Mark Weber | Feb 24, 2014 7:12:50 AM

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