Court rejects charter schools’ funding claims

The Indiana Court of Appeals has dealt a setback to charter schools that sued to get more money from the state. The decision, written by Judge John Baker, overturned a Marion County trial court decision that the schools were entitled to additional funding.

CourtroomAnd this could be a big deal. If the charter schools had prevailed, it could have opened the door to complaints by other charters, costing Indiana tens of millions of dollars.

Indiana Connections Academy, a virtual charter school, sued the state in 2016. Two other schools, Andrew J. Brown Charter School in Indianapolis and Aspire Charter Academy in Gary, joined the lawsuit.

At issue was the way Indiana distributed funds to charter schools. Prior to 2013, charter schools that opened in the fall didn’t start receiving state funds until January. They got no state appropriation for their first semester, although they could borrow start-up funding from the Common School Fund.

In 2013, Indiana shifted to a fiscal-year budget for charter schools, with the schools receiving funding for the 2013-14 school year based on their fall 2013 enrollment.

The charter schools argued in court that they had lost a semester’s worth of funding as a result. In October 2018, Judge Heather Welch of Marion Superior Court agreed. She ordered the state to pay $8.6 million: $3.8 million to Connections Academy, $2.3 million to Andrew J. Brown and $2.5 million to Aspire.

But Baker, in a decision joined by appeals court judges Nancy Vaidik and Robert Altice Jr., reversed the order. He pointed out that the legislature, which has authority over state spending, could have appropriated funds to cover what the charter schools thought they were owed, but it didn’t.

Instead, lawmakers forgave the charter schools’ Common School Fund loans, at a cost to the state of over $91 million. Many charter schools, apparently, got their money – including Indiana Connections Academy, which had $3 million in debt paid by the state, according to court records.

The charter schools also pitched their argument to the Indiana Constitution’s guarantee of tuition-free public education. But Baker was having none of it. He wrote that the state “necessarily fulfills that obligation in the guise of traditional public schools. In other words, even if the charter schools had to be self-funded for their first semester, and even if the charter schools had to close their doors as a result, the children of Indiana were always going to be able to obtain a tuition-free education at traditional public schools.”

The case, which can presumably be appealed to the state supreme court, involved only three charter schools, but others were getting in line. Irvington and Christel House charter schools in Indianapolis had sued. Others were no doubt getting ready.

Indiana charter schools enrolled nearly 30,000 students in 2012-13. If all thought they deserved a semester’s worth of funding, the state could have been on the hook for about $75 million.

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