Charter schools could owe millions to KC district

KANSAS CITY, Missouri - Charter schools potentially owe the Kansas City School District millions of dollars after their long-running legal effort apparently backfired.

At issue is a requirement that the Kansas City and St. Louis school districts pass on money to the charter schools when students who live within the boundaries of the two districts decide to attend the experimental public schools, which are free from some state regulations.

The St. Louis district passed on all the money. But the Kansas City district has been in a prolonged court battle because it has withheld roughly $800 per student for most of the 13 school years the charters operated in the city. The Kansas City district said the money was needed to pay off bonds that were issued to build and upgrade schools as required by a long-running federal desegregation case.

The Kansas City Star reports (http://bit.ly/ofDjlb) that after the state briefly sided with the charters, the withholding stopped for part of 2005 and 2006, costing the district more than $6 million in state funds. In a circuit court ruling issued last week, a judge said the district is owed that money, plus interest.

The ruling potentially would affect 14 charter schools that received the state revenue, possibly landing some of them in bankruptcy, said Douglas Thaman, executive director of the Missouri Charter Public School Association. He said the result could be that "students end up having to suffer."

But Allan Hallquist, a school district lawyer, said the district is compelled to recoup the money because court rulings have determined it was "unlawfully diverted."

"A public school may not constitutionally give away its taxpayers' money," Hallquist said.

Cole County Circuit Judge Jon E. Beetem placed much of the blame on the charters in his ruling, saying they "facilitated the state's violation." In April 2005, at the prompting of the charter schools, the Missouri Board of Fund Commissioners found the district had enough money to pay off the bonds -- even without the money withheld from the charter schools. Those bonds aren't scheduled to be paid off until 2014.

Beetem wrote in his ruling that the Missouri Department of Elementary and Secondary Education recommended at the time that it believed the resolution of the federal desegregation case required the department to continue withholding funds until the bonds were paid off. But the Board of Fund Commissioners determined the withholding should stop, and the department complied.

The state's action was "wrongful and illegal," Beetem's ruling found. "It logically follows that the . charter schools' retention of that money is unjust."

The ruling would give the state one year to repay the school district once the order is final.

Thaman said the charter schools probably will at least appeal the part of the ruling that orders the district to be repaid the diverted revenue with interest.

 

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