APS – The Charter Schools Funding Court Case – A Possible Compromise

Yesterday I wrote about APS’s arguments presented in the hearing regarding the method used to get the Charter Schools to participate in the funding of the pension liability. The following is my sense of what their concerns are:

  1. The pension liability is going to continue to grow and eventually it will have a significant impact on funding for direct APS students.
  2. If property taxes have to be raised to pay the pension liability, Charter Schools would receive a “windfall” as the incremental “local revenues” would have to be shared with them.
  3. Unless a resolution is reached, APS will discontinue the approval of additional Charters and possibly not renew existing Charters.

I have also talked to many individuals in the Charter School community and most are saying that they are willing to participate in a “solution” but, they cannot withstand the current reductions in funding.

So, is there a way to address APS’s concerns and include the Charter Schools in a solution that everyone can accept? The following is a modest proposal for a compromise on the issue:

  1. The Charter Schools would continue to get the level of funding called for under the statutory guidelines with certain potential modifications in the future.
  2. APS would continue to pay the pension liability consistent with it historically doing so.
  3. In the event that the Board of Education determined that a tax increase was needed to specifically deal with the pension liability in the future, the Charter Schools would agree to waive their right to their share of the tax increase, with the following conditions:
    1. The amount of incremental taxes that the Charter Schools would waive their right to is no greater than:
      1. The future required pension plan payment as calculated by the Plan actuaries.
      2. Less: the amount of current pension plan payments (adjusted upwards for inflation). In other words, Charter Schools do not receive a “windfall”.
      3. Less: the amounts due for current active plan participants (costs that clearly only benefit APS).
      4. Any amounts received in tax increases greater than the amount calculated above would be shared with Charters under the standard formula.
  4. APS would commit to sharing certain amounts of SPLOST revenues with the Charter Schools – this would not have to be a full pro-rata amount, but a reasonable formula could be devised for approved projects. The amounts so allocated would then become restricted for Charter School use currently or in the future.

This solution may not be perfect, but it addresses the major concerns of the APS Administration, provides a mechanism in which taxes could be raised if needed, takes the “windfall” out of the equation, allows the Charter Schools to willingly share in the pension costs and in return provides the Charter Schools with a potential new source of revenue for building and renovation costs.

Remember, a “deal” is generally not complete until both sides are angry and believe that they have given up too much. Release the dogs of war in the comments!

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