Esperanza Academy Charter School v. The School District of Philadelphia, 2024 WL 4875053 (Pa.Cmwlth. 2024). (Pennsylvania’s Commonwealth Court held that school districts’ deductions of federal grant expenditures from charter school tuition calculations were appropriate and compliant with the Charter School Law.)
Section 1725-A of the Charter School Law establishes the formula for calculating the tuition rates paid by school districts to charter schools for the enrollment in charter schools of school district resident children. Generally, the statute bases charter school tuition upon the school district’s budgeted total expenditure per averaged daily membership (ADM) excluding certain costs such as the budgeted expenditures for nonpublic school programs, adult education programs, student transportation services, facilities acquisition, construction and improvement services, and debt service.
For the purpose of calculating charter school tuition rates, the Pennsylvania Department of Education promulgated Form PDE-363 which enumerates a school district’s budgeted educational expenditures. In addition to those costs specifically excluded by Section 1725-A of the CSL, the PDE-363 also includes exclusions for: regular education (federal only), vocational education (federal only), other instructional programs (federal only), Pre-K (federal only), Pre-K (state Pre-K counts only), pupil personnel (federal only), instructional staff (federal only), administration (federal only), pupil health (federal only), business (federal only), operation and maintenance of plant services (federal only), central (federal only), other support services (federal only), and operation of noninstructional services (federal only).
For the 2015-16 school year, the School District of Philadelphia completed the PDE-363 form to compute its charter tuition rates and as provided by that form, excluded budgeted expenditures paid through federal funds and grants. Esperanza Academy Charter School and Esperanza Cyber Charter School contested the school district’s tuition calculation, contending that the exclusion of federal expenditures per the PDE-363 form was not authorized by the CSL. Before the Secretary of Education, the charter schools claims were denied. That ruling was appealed by the charter schools to the Commonwealth Court.
The Commonwealth Court upheld the Secretary’s determination. The court concluded that Section 1725-A of the CSL does not require the inclusion of expenditures paid for through federal grant funds to be used in charter tuition calculations. The court observed that restrictions within federal laws governing the school district’s use of such funds required that they be used only for district-operated programs. Because the only permissible use of those funds is for the benefit of the school district’s students, the court reasoned that their inclusion in the charter school tuition calculation resulted in an improper diversion of those funds to charter schools.
Accordingly, the practice of excluding federally funded expenditures from charter school tuition calculations as instructed by the PDE-363 form remains valid.
