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Court motion to recover millions of dollars from charter schools continues to spark anger

Court motion to recover millions of dollars from charter schools continues to spark anger

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SLPS pursues charter school money

Kindergarten Teacher Hazen Fairbanks, (third from left), talks to Jayceon Street during graphing exercises on Tuesday, April 19, 2016 at KIPP Victory Academy in St. Louis. St. Louis Public Schools has gone to court to get money it says should have been directed to it rather than to area charter schools like KIPP. Photo by Christian Gooden,

Seventeen years ago, a group of black parents, the school district, the U.S. Justice Department and others came to an agreement that was intended to put the funding of school desegregation programs forever in the hands of city taxpayers.

Now, they say, the state has violated the agreement by indirectly sending more than $42 million of desegregation money over 10 years to charter schools — money they say should be returned.

It’s an argument filed in an April 11 federal court motion that has touched a nerve among charter school parents and organizers, who could potentially lose their schools if the plaintiffs prevail.

Charter school supporters have begun a social media campaign urging Superintendent Kelvin Adams to “Drop the Suit.” A parody Twitter account for Adams began sending out sarcastic apologies for attempting to bankrupt the city’s 35 charter schools. District officials on Monday were working to have the account taken down.

“If they win this, it will be devastating,” said Marshall Cohen, executive director of Lift For Life Academy, a middle and high school and the oldest charter school in the city. “We wouldn’t be able to continue.”

The action is not a lawsuit against charter schools. It is a motion that seeks to enforce the terms of a 43-year-old case that involved concerned parents — known as the Liddell plaintiffs — who sued on behalf of their children seeking desegregation in St. Louis schools.

The motion involves the district’s Special Administrative Board, the NAACP, the Liddell plaintiffs, the U.S. Justice Department and others who were involved in crafting the 1999 desegregation settlement agreement that grew from that lawsuit.

That year, voters approved a 2/3-cent sales tax to pay for what had become the most expensive school desegregation plan in the nation. The agreement called for $60 million from the sales tax and resulting state aid to go to the district. The tax revenue was intended for district programs specified in the settlement agreement, such as magnet schools, full-day kindergarten, preschool and interdistrict busing for black students to predominantly white suburban schools.

The agreement, approved by then-District Judge Stephen Limbaugh, named the tax as a condition of his approval.

“Furthermore, the revenues generated by the sales tax shall be paid directly to, or assigned by the Transitional District to City Board,” Limbaugh’s memorandum says, referencing the district and the board that governs it.

Honoring voters

The litigation is “not an attack on charters,” said Adolphus Pruitt, president of the St. Louis NAACP, who is among the plaintiffs. It’s an attempt “to honor the wishes of voters when they approved the sales tax,” he added.

“The quagmire in all this is how the state funds poor school districts, and schools that have underserved populations,” Pruitt said. “Poor kids in the public schools and poor kids in the charter schools shouldn’t have to fight one another for money. If anything, we should be fighting together to get the state to step up to the plate.”

The dispute centers around actions taken by the Missouri Legislature when it recast the way the state finances public schools.

In 2006, the Legislature enacted a new funding formula that determines how the state distributes money school districts and charter schools. And since that point, attorneys involved in the desegregation case argue, St. Louis Public Schools annually has been shorted part of the revenue generated by the sales tax.

Eddie Roth, an attorney and director of the city’s Department of Human Services, questions the school district’s calculations.

He argues that the desegregation money has always been, and continues to be, collected solely for use by St. Louis Public Schools, according to the district’s own filings.

The only thing that changed, Roth wrote in a Facebook posting, is how the 2006 funding formula regarded that local desegregation money.

Under the new formula, desegregation dollars counted against the state aid available for St. Louis Public Schools. Since St. Louis charter schools draw from that same allotment of state funds, the district appears to be arguing that charter schools have enjoyed a bigger slice of the pie than they would have without the local desegregation money.

Roth said the litigation raises more questions than it answers. He urged district officials to explain themselves.

“Given the high stakes to this, the school district has the responsibility to be crystalline in what it’s doing and why it is doing it,” he said.

‘Creating great options’

Charter school officials say the litigation caught them off guard.

On the district’s website, a signed letter by the Special Administrative Board states that it has been in the works for some time.

“This litigation is the result of almost eight years of unsuccessfully working with the State to get it to live up to its promises and contractual obligations of the 1999 Desegregation Settlement Agreement,” it says.

Richard Sullivan, president of the SAB, first wrote state education officials about the issue in 2008. The most recent correspondence was this winter, when the SAB warned of litigation if the matter was not resolved.

“The District’s stance on partnerships and relationships with charter schools remains unchanged,” the letter states. “We remain focused on creating great options for the young people of our community.”

In the past, the tables have been turned. Charter schools have been the plaintiffs in litigation about underfunding, successfully claiming they didn’t receive adequate revenue from St. Louis Public Schools when the district controlled their revenue prior to 2006.

In January, Confluence Academy filed a lawsuit against the Missouri Board of Education arguing it had been shorted $2.5 million. Two other schools — St. Louis Charter (now Premier Charter School) and Lift For Life — successfully made the argument in 2009 when they sued the state and claimed St. Louis Public Schools withheld from them millions of dollars in property and sales taxes.

The two charter schools won the case. In the 2014-15 school year, the district paid the schools $6.3 million.

But charter school supporters say the district’s litigation has eroded their trust with the district.

Since his arrival in 2008, Adams has steadily built bridges with the charter school community by fostering a partnership with KIPP St. Louis and allowing the charter school network to use two district school buildings.

The district worked tangentially with charter schools to build support for Proposition 1 — a 75-cent increase to the property tax levy approved by voters this month that will generate about $28 million annually. A third of the funding would go to charters, because they enroll about one-third of public school children in the city.

“I thought the relationship was building and improving,” said Doug Thaman, executive director of the Missouri Charter Public School Association. “But this — this is going after every single charter school.”

Thaman’s organization is working on an analysis to determine how much money each charter school would have to repay if the district were to succeed.

Returning just one year of the revenue from the tax would be difficult, said Jeff Kuntze, chief operating officer for Confluence Academies. Ten years would be impossible, he added.

“We’re all taking notice and are quite concerned,” he said. “The dollar amounts we’re talking about are massive.”

Elisa Crouch is a reporter for the St. Louis Post-Dispatch.

Related to this story

The lawsuit filed last month by St. Louis Public Schools seeking $42 million in reimbursements for desegregation funding offers a convincing and probably winnable legal argument about how the district has been short-changed for years. But that doesn’t make the lawsuit right. Officials owe an explanation to taxpayers on why this suit was necessary and how the district will deal with the extreme disruption it could cause.

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