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Pension fund issue poses threat to Atlanta’s charter schools

By Maria Saporta and Dave Williams
Published in the ABC on Friday, July 13, 2012

Atlanta charter-school advocates are worried the recent closing of Tech High School due to budget cuts may not be the last in a city school system that operates 11 charter schools and is about to open a 12th.

The governing board at the math-, science- and technology-oriented charter school established in 2004 announced July 6 that Tech High will not reopen for the upcoming school year, citing an unexpected $360,000 cut in funding, a 16 percent reduction.

While Atlanta Public Schools officials blamed the decision primarily on student under-enrollment and declining tax revenues, Tech High board Chairman Kent Antley cited an APS decision to allocate unfunded school system pension liabilities to charter schools.

Although Tech High is the only Atlanta charter school closing its doors in the aftermath of the cuts, the system’s remaining charter schools will take a serious hit, said Tony Roberts, president and CEO of the Georgia Charter Schools Association.

“They plan to make those cuts to every single charter school,” Roberts said. “It’s devastating.”

The biggest impact likely will be on KIPP Metro Atlanta, which operates four charter schools in the city system and soon will launch a fifth.

Executive Director David Jernigan estimated the KIPP schools will receive about $1 million less in public funding during the coming school year, 25 percent less than just three years ago.

“This recent decision has sent all APS charter schools scrambling to balance their budgets for this school year, forcing all of us to make significant cuts,” Jernigan said.

If APS continues to charge the charter schools for its growing pension costs, Jernigan said KIPP “will have to completely revisit our financial model” as well as its programs and staff.

“It is not our desire, by any means, to close our doors,” he said. “But it’s hard to see a path beyond this year without some serious cuts.”

Drew Charter School in the East Lake community also is trying to figure out how it can cover the increased pension costs.

“This decision will have a significant impact on Drew’s operating budget, not only for the current year but for years to come,” said Cynthia Kuhlman, chair of Drew Charter’s board.

But Kuhlman added that Drew will be able to stay open when the school year begins in August.

For Jernigan, the real problem charter schools have with being forced to help cover APS pensions isn’t so much the financial impact as a question of fairness.

“Our employees are not APS employees, and they have not and will not benefit from the pension plan,” he said. “Therefore, we don’t think charter schools should be asked to pay into a pension plan.”

Also, Atlanta’s charter schools believe state law exempts them from having to pay for additional costs.

“The charter school law is very clear in the way charter schools should be funded, and we think it violates state law,” Jernigan said.

Roberts said officials at the charter schools have hired a lawyer and are considering taking their case to court.

“They’re looking at all of their options up to and including litigation,” he said.

But APS spokesman Keith Bromery said the school system’s charter schools are subject to the same funding issues that affect other APS schools.

“It affects their per-pupil reimbursement just like ours,” he said. “The burden is spread.”

However, Bromery said the major factor behind the financial constraints that forced Tech High to close was under-enrollment. Indeed, under-enrollment at some APS high schools was a driving force behind a redistricting plan the system’s board approved last spring.

“They only have about 200 students in that school,” Bromery said. “That’s hard to sustain.”

But Roberts said APS officials are using the under-enrollment issue to target the charter schools.

“The current administration is thinking, ‘If we have empty seats in our traditional public schools, why do we have charter schools?’ ” he said. “That’s the real thing that’s going on here.”

Bromery denied any anti-charter school bias on the part of APS officials.

Maria Saporta, Editor, is a longtime Atlanta business, civic and urban affairs journalist with a deep knowledge of our city, our region and state.  Since 2008, she has written a weekly column and news stories for the Atlanta Business Chronicle. Prior to that, she spent 27 years with The Atlanta Journal-Constitution, becoming its business columnist in 1991. Maria received her Master’s degree in urban studies from Georgia State and her Bachelor’s degree in journalism from Boston University. Maria was born in Atlanta to European parents and has two young adult children.

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