Education Law Center has joined a lawsuit by Piscataway Township Schools challenging a decision by Acting Commissioner Christopher Cerf to allow charter schools to keep excessive amounts of school funding in their surplus accounts. Piscataway is seeking a reduction in tuition rates it pays for resident children to attend the charter schools so that it can redeploy these funds to provide needed programs for district students.
NJ Department of Education (NJDOE) regulations authorize school districts to request reductions when a charter school “spends significantly less than budgeted and has accumulated a sizable surplus.” If the State Education Commissioner determines that a charter school has excess surplus – meaning surplus that exceeds 2% of the school’s budgeted general fund or $250,000, whichever is greater – he may reduce the charter school tuition rates paid by the local school district, but such reductions are not required.
During the 2010-11 and 2011-12 school years, Piscataway students were enrolled in four charter schools that maintained excess surplus:
• Central Jersey College Prep – $157, 963 in excess funds
• Union County TEAMS – $117, 135 in excess funds
• Queen City Academy – $462,558 in excess funds
• Barack Obama Green – $56, 747 in excess funds
In a February 3, 2012 decision, Acting Commissioner Cerf denied Piscataway’s request for a tuition reduction based on these excess funds. Mr. Cerf did not dispute Piscataway’s calculations or offer any reasons why the charter schools should keep the excess funds. Instead, he stated that “the unreserved general fund balances are being appropriately retained,” but provided no explanation for his determination.
Piscataway appealed Mr. Cerf’s decision to the NJ Appellate Court. In its Appellate brief, Piscataway argues that the Acting Commissioner’s ruling is arbitrary and capricious and not based on sufficient reasons.
ELC is asking the Court for permission to file an amicus brief in support of Piscataway. In the brief, ELC argues that the Acting Commissioner’s failure to establish reasonable standards governing the use of charter school surplus funds is also arbitrary and capricious.
ELC also directs the Court’s attention to the fact that over one-third of New Jersey’s school districts, including Piscataway, are operating with budgets that are under the amounts determined to be constitutionally adequate by the State’s landmark school funding formula – the School Funding Reform Act (SFRA). Piscataway was $11 million below adequacy in 2010-11.
Elizabeth Athos, the ELC senior attorney who wrote the brief, said that “every extra dollar that is unused and retained by a charter school is a dollar that could be used to support the education of the more than 7,000 students attending schools operated by Piscataway.”
In arguing that rules governing excess surplus are needed, ELC relies on the Acting Commissioner’s affirmative obligation to protect the constitutional interests of all public school students – those in district and charter schools.
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