The growth of charter schools in Atlanta could stall unless they’re forced to help pay off the city school system’s old pension debt, an Atlanta Public Schools attorney told the Georgia Supreme Court on Monday.
Atlanta has one of the state’s largest charter school systems, with one-tenth of its students in charters, but school board members may not approve new charter schools if doing so would cause the pension debt burden to fall increasingly on traditional schools, said attorney Thomas Cox. Atlanta Public Schools is appealing a judge’s ruling that it can’t make charters share its pension cost.
“I don’t see how in good faith any Atlanta board member could vote to approve a new charter school,” Cox said. “It’s going to decrease the amount available to other schools.”
Atlanta Pubic Schools last year sought to make its 10 startup charter schools contribute to an unfunded pension liability that exceeds $550 million. Initial payments in the 2012-2013 school year cost charter schools about $2.8 million, with another $35.8 million paid by traditional schools.
The charter schools sued, claiming that state law set their funding formula and it can’t be altered to pay down a debt burden that began growing more than 30 years ago, well before the first charter schools came into existence. Fulton County Superior Court Judge Wendy Shoob ruled in favor of the charter schools in December.
Supreme Court Justice David Nahmias was skeptical of Atlanta Public Schools’ claim that it has the power to take money from charter schools for purposes besides those spelled out in state law.
Cox responded that the Legislature didn’t envision this kind of pension funding problem when it passed the Charter Schools Act in 1998.
“That doesn’t help you,” Nahmias told Cox. “The fact that the statute doesn’t mention these costs doesn’t mean you’re in the clear.”
Nahmias said the law outlines specific purposes for which school systems can withhold money from charter schools, such as administration costs, but it doesn’t mention pension costs. He suggested Atlanta Public Schools could go to the Legislature if the school system wants the law changed.
An attorney for the Atlanta charter schools, Rocco Testani, said he doubts that the money issue would prevent the school board from approving charter schools.
“Quality charter programs that are good for children get approved by boards, and that’s the basis I would hope the board would use to make its decisions,” Testani said after making his argument.
The charter schools sued because they may not be able to stay in business if they have to bear additional costs, said Tony Roberts, CEO of the Georgia Charter Schools Association.
“The fear is that none of the charter schools would be able to stay open if that isn’t remedied,” Roberts said. “Under a much reduced funding, how many more charter schools would want to open?”
Atlanta Public Schools Superintendent Erroll Davis said the school district appealed because Shoob’s ruling didn’t treat all student funding equally across charter and traditional schools.
“It is difficult to justify allowing some schools to forgo a district-wide financial obligation that burdens all schools. We are hopeful that the Supreme Court will rule in our favor,” Davis said.
A ruling by the Georgia Supreme Court is likely in the coming months.
Davis wrote in a May letter to charter schools that the school system would release $3 million in the 2013-2014 school year that would otherwise go toward the pension debt. If the school district wins its appeal, the charters would have to repay that money.
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