PHOENIX - Charter schools in Arizona filed suit Friday to block the state Department of Education from taking $5.8 million from them.
Legal papers filed in Maricopa County Superior Court contend School Superintendent John Huppenthal is ignoring state laws that determine how to compute repayment of funds schools did not receive during the state's budget crunch. Attorney Kory Langhofer said Huppenthal and his agency cannot simply decide as a matter of policy to reinterpret the law.
But even if he can, Langhofer said, Huppenthal can do that only going forward. The lawsuit asks a judge to immediately block the state from taking back the "makeup" money the state now contends was overpaid.
"What they're not allowed to do is apply those changes retroactively," he said.
He said it would be like having an employee who was promised and paid $50,000 for a year of work. The following year, Langhofer said, the employer might want to pay just $45,000. What the employer cannot do is demand repayment of the $5,000 difference.
But Langhofer said that's what the state is doing with its plan to withhold funds over the next five years to recoup what it says was an overpayment to charter schools of $5.8 million.
Most immediately, Langhofer wants a judge to block the first deduction, scheduled to take place in the coming week. He said that would take $1.4 million from about 100 charter schools.
"We've got to pay our teachers," he said.
Ultimately, however, he wants a ruling that the original payment plan is legal - and Huppenthal is powerless to change it himself.
But Stacey Morley, the Education Department's director of policy development and government affairs, said it is clear some schools, both traditional public and charter, were overpaid. She said the revamped formula now accurately reflects what is required by state law.
Morley also said allowing the complaining charter schools to keep the excess dollars based on an errant formula, both retroactively and into the future, would mean less cash to be divided up for the rest of the schools. And that, she said, would not be fair to them.
"I believe we have an obligation to the taxpayers," Morley said.
The fight stems from Proposition 301, approved by voters in 2000, which increased the state sales tax by six-tenths of a cent, in part to give more money to public schools for teacher pay, to be divided up on a per-pupil basis. That includes charter schools.
Beginning in 2006, the recession caused the amount of revenue flowing into that "classroom site fund" to be less than legislative budget staffers projected. Two years ago, lawmakers altered the formula to essentially make up for the difference.
For the last two years the Department of Education distributed the money based on the number of students currently attending a school. But Morley said the money should have been divided up based on the number of students who were in each school at the time the shortages occurred.
Morley said that means schools that are much larger now than they were years ago, when they were shorted, got far more money in reimbursement than they should have.
She said there are some charter schools getting reimbursement on current enrollment that didn't even exist during the lean years, and therefore were not shorted at all.
She said it's not fair to now give them "makeup" funds.
No date has been set for a hearing on Langhofer's request for the injunction.
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