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Appellate Division Rules Against Charter Schools In Funding Issue

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Appellate Division Rules Against Charter Schools In Funding Issue

  • Julie Warshaw
  • September 19, 2017

Four charter schools located in Jersey City challenged the level of funding they received from the local board of education under the School Funding Reform Act of 2008 (“SFRA”) as inadequate for their students to receive a thorough and efficient education in violation of the New Jersey Constitution. In an unpublished decision issued on September 14, 2017, the New Jersey Appellate Division denied the charter schools’ challenge and upheld the current funding mechanism in Learning Community Charter School v. Jersey City Board of Education.

Charter schools are public schools that operate under a charter granted by the Commissioner of Education (“Commissioner”). They were enacted by the Charter School Program Act of 1995 (“CSPA”). Charter schools are independent of a local board of education. Through N.J.S.A. 18A:36A-12 of the SFRA, charter schools receive 90% of certain funding categories from the local board of education. Charter schools also receive state and federal aid. However, the funding for charter schools is not equivalent to that of traditional public school districts.

The charter schools in this case initiated a challenge before an Administrative Law Judge (“ALJ”) and the Commissioner arguing that the difference in funding for charter schools and traditional public school districts is unconstitutional. At the heart of their claims, the charter schools argued that they are entitled to “adjustment aid,” which local school districts receive. Adjustment aid protects districts from a sharp reduction in state aid resulting from the new funding formula set forth in the SFRA. It allows local districts to spend above adequacy to maintain current levels of spending without significant tax levy increases or reductions in programs and services.

The ALJ and Commissioner both ruled against the charter schools. The charter schools then filed this appeal with the Appellate Division.

The Appellate Division upheld the decisions of the ALJ and Commissioner, finding that the statutory scheme created by the SFRA and CSPA is clear and unambiguous. It reasoned that nothing in the SFRA and CSPA requires charter schools to receive adjustment aid. Further, adjustment aid was not part of the formula to fund the costs of a thorough and efficient education. The Legislature could have added this type of aid to the funding formula for charter schools but chose not to.

The Appellate Division also reasoned that the CSPA sets forth strict statutory standards for charter schools to provide at least the same level of education as traditional public schools – otherwise they could lose their charters. Finally, the Appellate Division noted that students dissatisfied with the education they are receiving at the charter schools could easily enroll in the traditional public school. For all of those reasons, the Appellate Division denied the charter schools’ challenge in this case.


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