Charter school students say they are disadvantaged in state funding

SACRAMENTO -- A superior court judge appeared skeptical of attorneys who argued Friday that charter school students were disadvantaged by the state's school funding formula during the pandemic.

Judge James P. Arguelles did not rule after the oral arguments. But he issued a tentative ruling before the hearing that would dismiss both cases.

One group of plaintiffs says the funding rules have harmed poor students, those from racial minorities, and those who need special services and attend charter schools. Atkins v. State of California, 34-2020-80003436 (Sac. Super. Ct., filed July 27, 2020).

The other group of plaintiffs says the funding rules harmed any student of a non-classroom based charter school, even while millions of public school students were attending virtual classes during the 2020-21 school year. Reyes v. State of California, 34-2020-80003489 (Sac. Super. Ct., filed Sept. 24, 2020).

Young, Minney, & Corr LLP represents both sets of plaintiffs. The Sacramento firm specializes in charter school cases. Founder Paul C. Minney took part in the hearing, but Senior Counsel Lee J. Rosenberg presented most of the arguments.

While each case made slightly different arguments, both challenged the school funding laid out in SB 98, a bill Gov. Gavin Newsom signed in 2020. The law set complex funding formulas based on a school's average daily attendance. The plaintiffs argue the formula was based on the prior year enrollment, causing a disadvantage for charter schools, especially those that have grown recently.

"The cases have not been officially consolidated, but they were cobriefed and we're hearing them together since they have essentially the same issues," Arguelles said at the outset of the hearing.

"In reading the tentative, certain arguments were attributed to plaintiffs that plaintiffs didn't make in this case," Rosenberg told the judge. "It appears those misunderstandings formed a central basis for the court's tentative. The core question: Is it OK for the state to fund a student's education at zero, as it did this year in the 2020-2021 school year, when it defunded more than 25,000 students' educations. Children cannot be disenrolled absent expulsion."

Rosenberg argued the tentative ruling appeared to claim the charter schools demanded a particular funding level or formula. The Legislature is free to change these formulas if the rules apply to everyone, he said, but cannot advantage public schools over charters.

One group of students claimed the funding rules violated equal protection rights and a student's right to an education. They also said the state impaired a contract.

"Our argument is that each individually approved charter is a contract," Rosenberg said.

"Where is this contract?" Arguelles replied.

This led to a discussion of the terms of an "implied" contract. Rosenberg said that by certifying a charter to open, the state was obligated to treat it similarly to a public school.

The plaintiffs made claims the students' rights were violated, while the charter schools were impaired in their ability to meet their obligations to those students. One of the major cases the plaintiffs cited was Serrano v. Priest 5 Cal. 3d (1971), which found the state must address funding inequities that came with paying for schools with property taxes.

"If there's a vast discrepancy in funding, we can say those kids are getting different levels of education," Arguelles conceded.

But Deputy Attorney General Jacquelyn Young said the plaintiffs had "a stark lack of evidence" to back up their claims, and had insufficiently pleaded their equal protection rights violation arguments.

Her California Department of Justice colleague, Andrew Z. Edelstein, argued the plaintiffs were treated more or less the same as other students.

"They made sacrifices just like everyone else," Edelstein said, adding, "Charter schools want to be treated different and better than public schools."

In his closing, Rosenberg implied that if the plaintiffs lost, it would undermine the equal status of charter schools in the state's education system.

"We can't be relitigating every year," he said. "A fiscal emergency is not a justification for the state to modify the term of a contract after the fact."

Arguelles took both cases under submission.