Dive Brief:
- A new lawsuit filed by the Pennsylvania School Boards Association (PSBA) alleges that property tax reduction allocation funds from Pennsylvania's Gaming Fund/Property Tax Relief Fund were improperly funneled to charter schools.
- The PBSA has asked the state for a full investigation into the legality of the fund diversion.
- The Pennsylvania Education Department had reportedly notified district officials about the diversion beforehand, meant to fulfill an obligation to fund charter schools with state money.
Dive Insight:
Recently, scandals involving charter school accountability and public school fund diversion have cropped up, such as in Ohio, where a state official admitted local charters “lacked acceptable oversight” regarding performance.
In this case, however, the conflict is over the use of a particular Pennsylvania revenue stream specifically earmarked to be for “the benefit of taxpayers.” The charters were posed to collect an additional $45 million dollars from the Gaming Fund/Property Tax Relief Fund, but the transfer was effectively frozen by a “stop payment” order from Pennsylvania's state treasurer. The freeze was executed on the same day the PSBA filed suit.
The state's Department of Education is in a difficult position, since it’s obligated to pay charter schools out of “any available state funds,” and Pennsylvania is simultaneously immersed in a budget impasse so serious that some pre-K programs are now shutting down. In this case, the department may or may not have broken the law by deciding that the gaming money in question was a legitimate form of state funding.