Baltimore City Charter Lawsuit Q&A

In fall 2015, a number of charter schools filed suit against Baltimore City Public Schools. In the ensuing months, People for Public Schools formed, created a petition for fair school funding, and researched the legal and budgetary concerns driving the charter lawsuit. We have prepared this Q&A to help parents and others understand the issues and get a sense of what’s at stake for all students if the charters win. This post is the second in a series. Part 1 covers Maryland charter law basics.

1. Who is suing the Baltimore City Public School System?

Nine charter operators representing 14 of Baltimore City’s 34 charter schools have joined the lawsuit. These include:

Operator Schools
AFYA Baltimore, Inc. AFYA Public Charter School; Tunbridge Public Charter School; Brehms Lane Elementary School (opening 2016)
Baltimore Montessori, Inc. Baltimore Montessori Public Charter School (including the Middle School)
City Neighbors Foundation City Neighbors Charter School; City Neighbors Hamilton; City Neighbors High School
Creative City Public Charter School Foundation, Inc. Creative City Public Charter School
The Empowerment Center, Inc. The Empowerment Academy
Experiential Environmental Education, Inc. The Green School of Baltimore
KIPP Baltimore, Inc. KIPP Ujima Village Academy; KIPP Harmony Academy
Patterson Park Public Charter School, Inc. Patterson Park Public Charter School
Southwest Baltimore Charter School, Inc. Southwest Baltimore Charter School

2. What is the basis for the current lawsuit?

The lawsuit alleges that the public school system has breached its contract with the litigating charters. There are essentially two claims. The first accuses City Schools of not following the Maryland State Board of Education (MSBE) guidance regarding funding, thereby underfunding these charter schools. The second claim is that City Schools has not provided charter schools with sufficient supporting documentation for how the funding has been calculated. The nine operators who have sued as of fall 2015 have asked for damages of at least $75,000 each plus costs.  Since the lawsuit alleges breach of contract, presumably they also seek enforcement of the MSBE funding guidance and further documentation of City School’s funding.

3. How has the District calculated how much funding charter schools receive? What’s the funding formula?

This infographic provides a sketch of how Baltimore City Schools calculates charter school funding and an outline of what’s at stake if the litigating charters win their lawsuit.

Under the current funding formula used by Baltimore City Schools, the system takes all general federal, state and local funding and deducts two “buckets” of funds. The first bucket consists of money that the system must spend but that does not directly benefit K-12 students in public schools. This includes system-wide costs for:

  • Retiree health benefits for retired teachers (including teachers from charter schools)
  • Debt service
  • Money spent on Pre-K
  • Non-public placements for special education students whose needs cannot be met in public schools

    The system then deducts funding that is due only to specific K-12 students, including:

  • Special education funding
  • English for Speakers of Other Languages funding
  • Specialized transportation funding (covers the costs of transportation for students with special needs, homeless students, etc.)

Finally, according to MSBE guidance, the system deducts the 2% administrative fee and then divides what’s left by the number of K-12 students in the system. In 2014-15, this resulted in $9,556 per charter school student. Charter schools serving eligible students have then received a mix of cash and services for special education, limited English proficiency (LEP), and other students due special services, as well as any Title I funding they were due.

4. What’s wrong with the MSBE guidance about funding?

In 2004, the year charter schools began to operate in Baltimore, City Schools proposed funding them with a mix of cash and services. City Neighbors Charter School and Patterson Park Public Charter School filed petitions with MSBE, arguing that the mix was not commensurate with the funding received by other public schools in Baltimore City. MSBE’s decisions favored these early charter schools, issuing guidance that stated that local school systems should take their total budget, deduct expenses for debt service and adult education, and then divide by the number of students in the system to come up with an average per pupil amount. Charters would then receive this amount for each student they enrolled. This guidance was appealed by the Baltimore City School System, but it was ultimately upheld by Maryland’s highest court, the Court of Appeals.

However, from the point of view of those seeking fair and equitable funding for all students, the MSBE guidance is a primary source of tension between charter and traditional public schools. All school systems have out-of-classroom expenses other than debt service and adult education. If charters do not pay their fair share, the burden of these expenses falls unfairly on traditional school students and their schools.

The District and charter schools have been working around the guidance for that reason. The school system has continued to deduct commonly-shared public expenses prior to calculating per pupil funding for charter schools. Charter schools have to date agreed to share many of these expenses, such as money for specialized placements for special education students. In their October 7, 2015, presentation to the City Council, the litigating charter operators agreed that retiree health benefits, non-public placements, and specialized transportation should be deducted before charter funding is calculated.

Additionally, the guidance does not account for the fact that some funding is spent not on all students but only on students with a particular need. Baltimore charter schools have agreed in the past to the District’s deducting these funds prior to disbursing the per pupil amount for charter schools. Funding and/or services for students who qualify for them, such as English-language learners and students with special needs, are then added to the budgets of the schools that serve these students. That is where these funds should go.

5. What happens if the litigating charters win?

It’s not completely clear, but if a judge or mediator followed the logic of the litigating charters’ claim, which is based on the MSBE guidance, and required City Schools to use that formula, it is possible that the $106 million of required spending for retiree health benefits, pre-K, and non-public placements that is currently spread across all students would instead need to be paid for only by students in traditional public schools. This would result in over $15 million fewer dollars for students in traditional public schools, as charter schools would not be paying their fair share of these costs.

6. Why do traditional public school parents need a voice in this issue?

Any decisions made by the School Board, a mediator, or a judge about charter school funding will have an impact on all children in all Baltimore City Public Schools. While representatives of the litigating charters claim to speak for all parents, they are advocating for a funding formula that would be disastrous for students in traditional public schools. All parents of Baltimore City School students deserve to be heard on this issue. All of our children are owed adequate and equitable funding. If you agree, sign the petition.