Tessera Hall Academy

St. Louis Public Schools lawsuit regarding charter school funding

St. Louis Public Schools has filed a lawsuit against the State of Missouri seeking restitution for alleged overpayments to the charter schools in St. Louis.

This is a critically important issue to every charter school in St. Louis, the St. Louis Community as a whole and could bring the end of public school choice for their St. Louis families.

The charter schools’ interest is to work TOGETHER with the State and SLPS toward a solution that ensures ALL public school students receive equitable funding toward their education. For this to happen the lawsuit needs to be dropped taking charter schools out of harms way.

The Issue

1972 ‐ 2005:

  • A class action lawsuit was filed against St. Louis Public Schools (SLPS). The name of the lawsuit was Liddell v. The Board of Education of the City of St. Louis and sought the desegregation of the city schools;
  • In 1998 the Missouri General Assembly passed Senate Bill 781, the desegregation settlement agreement, which established charter public schools in the City of St. Louis (http://www.senate.mo.gov/98info/billtext/tat/SB781.htm).
  • The settlement plan also included the City of St. Louis Voters adopting a ‘desegregation’ sales tax (separate from Prop C) to provide funding for the St. Louis Public Schools;
  • The St. Louis Public Schools requested that this sales tax be applied to their property taxes to offset the amount they are unable to raise in property tax due to low property values. The sales tax is applied in this manner.
  • As a result of the Settlement Agreement legislation is filed leading to the establishment of charter public schools in St. Louis.

2006:

  • A law passed allowing charter schools to serve as their own Local Education Agencies (LEAs) receiving their public monies from the State of Missouri;
  • In determining the amount of money each charter school is entitled to receive the State rightfully includes the desegregation sales tax as charter public schools serve public school students in St. Louis and participate in the desegregation settlement.

2016:

  • SLPS requests the support of the charter schools in St. Louis to pass a tax levy increase;
  • The charter schools in St. Louis overwhelmingly support the tax levy and encourage their parents to vote in favor.
  • On Tuesday, April 5, SLPS passes a tax levy increase for the first time in 25 years bringing an estimated 27 million per year to the District.
  • On Monday, April 11, St. Louis Public Schools files a law suit holding the State in contempt, claiming MO DESE, since 2006, has overpaid the charter schools in St. Louis by including the ‘desegregation’ sales tax within the local effort payment that is deducted from the SLPS state payment;
  • The exact language of the Motion is as follows:
    • “The relief sought from this Court includes, but should not be limited to, (1) a directive that the State and the Missouri Department of Elementary and Secondary Education (“DESE”) fully comply with this Court’s Settlement Order and the DSA by discontinuing the practice of reallocating “Desegregation Sales Tax” proceeds to school entities other than the District; (2) a finding that by violating the Settlement Order, the State is in contempt of court; (3) a directive that the State reimburse the SAB for any Desegregation Sales Tax proceeds that have been wrongfully reallocated by the State in violation of the Settlement Order and the DSA; and (4) an award of attorneys’ fees incurred in pursuing this Motion.”
  • The only other school entities in the City of St. Louis receiving the “Desegregation Sales Tax” are the charter public schools.
  • SLPS is seeking from the State of Missouri full restitution of all monies they challenge have been overpaid to charter schools (estimated by SLPS at $42.5 million for 2006-­‐2015 and an additional $8.8 million for this year) AND a change to charter school payments removing the inclusion of the ‘desegregation’ sales tax money. If SLPS prevails, future St. Louis charter school payments from the State would be reduced.

The Reality

  • In 1998 the Missouri General Assembly passed Senate Bill 781, the desegregation settlement agreement, which established charter public schools in the City of St. Louis.
  • Charter Schools meet the requirements of the desegregation agreement bringing quality public education to St. Louis.
  • Charter Schools ARE public schools and are entitled to their fare share of the local effort Charter school students ARE PUBLIC SCHOOL STUDENTS, 70% whom are African American
  • St. Louis Public Schools already receives more money per pupil then all but 2 area school districts and charter schools AND they just passed a tax levy increase bringing an additional $27.8 million dollars PER YEAR to the District.

Potential Impact

  • If SLPS prevails the State would need to pay the District nearly 50 million dollars. Where would those dollars come from?
  • Legally the State can demand repayment from the charter schools within in 1 year
  • In addition, every one of the nearly 11,000 charter school students in the City of St. Louis would have their annual funding reduced by approximately $800.
  • The financial fall out would devastate the charter school community.

What’s Next?

  • The State’s Attorney General’s Office has until May 8th to file a response to the motion
  • The Federal Court MAY allow time for discovery/exchange of information/gathering of evidence
  • The Federal Court MAY include depositions to be taken
  • The Federal Court MAY allow for a Hearing providing all parties to present their argument before making their decision
  • This is not a trial but a Motion to Enforce. The above three points MAY occur but the Federal Court Judge making a decision WILL occur.
  • WHEN? As this is NOT a trial but a Motion to Enforce it is predicted the Federal Court will make a decision within the next 6 to 9 months.

How Long Will This Take?

  • There is no definite answer to this question. The Federal Court MAY allow time for discovery/exchange of information/gathering of evidence, include depositions to be taken, allow for a Hearing providing all parties to present their argument before making their decision.
  • It is predicted the Federal Court will make a decision within the next 6 to 9 months causing great uncertainty for parents and faculty and negatively impacting recruitment of students and teachers. Families making school decisions will consider moving out of the City.

Why Should Charter Schools Get Involved?

  • The Motion to Enforce may be against the State of Missouri BUT the only “school entities” in the City of St. Louis other than SLPS receiving the ‘desegregation’ sales tax dollars are the charter schools;
  • When the first lawsuit was filed over 40 years ago charter schools did not exist. Today they do (as a result of desegregation) and charter school students need a seat at the table to ensure their interests are represented.

Questions:

If this is a lawsuit between St. Louis Public Schools and the State how are charter schools at risk?

The Motion to Enforce may be against the State of Missouri BUT the only “school entities” in the City of St. Louis other than SLPS receiving the ‘desegregation’ sales tax dollars are the charter schools. MoR.S.160.415.2(3) states, “if the department overpays or underpays the amount due to the charter school, such overpayment or underpayment shall be repaid by the public charter school or credited to the public charter school in twelve equal payments in the next fiscal year.”

Therefore, if SLPS prevails and the State is held liable for the monies they have the ability to take the monies from the charter schools.

What would be the financial impact for each charter school?

Given this lawsuit covers a 10-­‐year period of time it is estimated to be a risk of nearly $50 million dollars (SLPS estimates $43 million dollars). In addition, every one of the nearly 11,000 charter school students in the City of St. Louis would have their annual funding reduced by approximately $800.

If charter schools are public schools why does SLPS believe they have a right to do this?

SLPS appears to believe that the ‘desegregation’ sales tax monies belong to the District (the institution) and not the public school students in the City of St. Louis. This is similar to their argument that vacant public school buildings belong to the District (the institution) and not the public who paid for them with their taxes. St. Louis Public Schools already receives more money per pupil then all but 2 area school districts and charter schools AND they just passed a tax levy increase bringing an additional $27.8 million dollars PER YEAR to the District.

The Reality ­‐ Charter schools, by law, are public schools, serve ONE THIRD of the public school children in the City of St. Louis and were part of the City of St Louis Desegregation Settlement. SLPS cannot and should not attempt to solve their spending issues by targeting city children who currently receive LESS funding than their own SLPS students.

Bottom line, this is about children and the students in charter schools, although public school students in the City of St. Louis, are being attacked with efforts to eliminate their right to public school choice.

How you can help

Make your voice heard by contacting SLPS, your local and state legislators.

  • Use social media to convey your concerns and to encourage SLPS to do the right thing and Drop the Suit (#DropTheSuit)
  • Tweet @SLPS_SUPT and @SLPS_INFO insisting they do the right thing and drop the suit!
  • Send a Facebook message to https://www.facebook.com/stlpublicschools/ insisting they do the right thing and drop the suit!
  • Change your Twitter & Facebook Covers and/or Profile Pictures to the images at the bottom of this post to show your support.
  • Sign the #DropTheSuit Petition