APS – Charter School Lawsuit to Recover Withheld Local Revenues from APS – Fundamental Issues Explained

Recently, I received the following comment to my post comparing Per Student Spending for Charter Schools and for direct APS students.

Jason commented – “I am confused by your statement that charters do not incur pension liability costs – and, subsequently wonder if your numbers are correct.  Isn’t APS currently withholding money from charters for pensions?  Isn’t that what the lawsuit is about?”

The questions go to the heart of the matter and represent a significant amount of confusion in the public domain regarding the issue. First, let me say that I have not read the transcript from the trial, but have read the Judge’s December 2012 order (see here) requiring APS to issue any funds that were previously withheld from the Charter Schools.

And now to the questions Jason posed:

  1. Charters do incur pension liability costs and they are incorporated into the QBE formulas that are used to allocate “local revenues” (property tax collections, etc.) to the Charter Schools.
  2. APS was withholding “local revenues” from the Charters – and they did it in a very sneaky way. Under current law, “local revenues” are allocated based on the proportion of QBE expenditures incurred by the Charters to QBE expenditures incurred by APS. While the calculation of the numbers is complex, the determination of what constitutes “local revenues” is quite clear as codified in the GA statutes.
  3. The GA statutes have no provision that allows APS to reduce “local revenues” by deducting any type of expenditures incurred – but that is what APS did resulting in a lower allocation to Charters.
  4. The following example shows what APS did compared to what the Judge ordered (the numbers used are for illustration purposes only):

Charter School Lawsuit CalculationThe bottom line is that APS was trying to recover some of its unfunded pension liability by improperly manipulating the allocation formula for “local revenues” and was called to account by the Judge.

I will also note that APS – along with all Board of Education members – is appealing the decision. Given the clear cut nature of the calculation methodology in the GA Statutes as very clearly described in the Judge’s decision, every non-incumbent candidate for the School Board should beat the incumbents over the head with this issue. It was underhanded, inappropriate, sneaky and most importantly – illegal.

And as a side note – Tech High folded as a result of the “local revenues” withheld last year – do you think they might be planning a lawsuit against APS? If so, the taxpayers will pay dearly for the actions of the APS Administration and School Board.

One Response to APS – Charter School Lawsuit to Recover Withheld Local Revenues from APS – Fundamental Issues Explained

  1. Jason says:

    Thanks for the explanation, Robert. And, thanks, in general, for your efforts on this blog.

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