[J-67-2016] [OAJC: Donohue, J.]

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

POCONO MOUNTAIN SCHOOL 

DISTRICT,

Appellant

v.

PENNSYLVANIA DEPARTMENT OF 

EDUCATION, DIVISION OF SUBSIDY 

DATA AND ADMINISTRATION,

Appellee

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No. 87 MAP 2015

Appeal from the Order of the 

Commonwealth Court dated July 8, 

2015, at No. 2052 CD 2014 Affirming 

the Order of the Pennsylvania 

Department of Education dated October 

23, 2014 at No. EDU-2014-SLAP000176.

ARGUED: May 11, 2016

CONCURRING OPINION

JUSTICE WECHT DECIDED: December 28, 2016

I join the learned Opinion Announcing the Judgment of the Court (“OAJC”) in its 

astute statutory analysis, and in its disposition. I write separately to emphasize my 

concerns with the existing funding scheme as it relates to charter schools and employee 

pensions. 

The General Assembly codified the intent of the Charter School Law (“CSL”) as 

follows: 

(1) Improve pupil learning[;] (2) Increase learning opportunities for all 

pupils[;] (3) Encourage the use of different and innovative teaching 

methods[;] (4) Create new professional opportunities for teachers, 

including the opportunity to be responsible for the learning program at the 

school site[;] (5) Provide parents and pupils with expanded choices in the 

types of educational opportunities that are available within the public 

school system[;] (6) Hold the schools established under this act 

accountable for meeting measurable academic standards and provide the 

school with a method to establish accountability systems.
[J-67-2016] [OAJC: Donohue, J.] - 2

24 P.S. § 17-1702-A. 

Some charter schools, which operate independently from school districts but 

depend upon public funding,

1

have failed to satisfy these legislative aspirations. See

Patrick J. Gallo, Jr., Reforming the “Business” of Charter Schools in Pennsylvania, 2014 

BYU Educ. & L.J. 207 (2014) (hereinafter “Gallo”). “[T]he loopholes within 

Pennsylvania’s flawed charter school funding formula and lack of fiscal oversight have 

presented an opportunity for profiteers.” Id. at 215. Charter schools, on average,

underperform, especially in comparison to traditional public schools. They reap 

substantial taxpayer dollars2but generally yield higher drop-out rates and lower

academic performances. See id. at 226-28; see also Valerie Strauss, “A dozen 

problems with charter schools,” The Washington Post, 

https://www.washingtonpost.com/news/answer-sheet/wp/2014/05/20/a-dozen-problemswith-charter-schools/ (May 20, 2014) (last reviewed August 25, 2016) (reporting that 

“only one in six of [Pennsylvania’s] charter schools is ‘high-performing’”). Lack of 

meaningful oversight exacerbates these problems. Gallo at 222-23.

3

 

 

1 Section 17-1702-A provides that “[i]t is the intent of the General Assembly, in 

enacting this article, to provide opportunities for teachers, parents, pupils and 

community members to establish and maintain schools that operate independently from 

the existing school district structure[.]” 24 P.S. § 17-1702-A.

2

In the 2010-2011 fiscal year, over one billion in tax dollars went to Pennsylvania 

charter schools. Gallo at 215.

3 See also Kathy Boccella, “Pa. seeks better results, oversight with new charter 

school division,” The Philadelphia Inquirer, 

http://www.philly.com/philly/education/20160825_Pa__seeks_better_results__oversight

_with_new_charter_school_division.html (August 25, 2016) (last reviewed August 25, 

2016) (“A report last week by the Pennsylvania School Boards Association said that 

charter school administrative expenditures were nearly double those of conventional 

public schools, and that their highest-ranking officials are paid far more. It also said 

such schools spend less on instruction than traditional school districts, and more on 

support services and facilities.”). 
[J-67-2016] [OAJC: Donohue, J.] - 3

The OAJC applies axiomatic principles of statutory construction, which lead to 

the conclusion that neither the School District nor the Commonwealth is liable for a 

charter school’s outstanding Public School Employees’ Retirement System (“PSERS”)

contributions. While I join the OAJC in its holding, it is evident that our conclusion could 

lead to one of two unfavorable outcomes.

In footnote 12, the OAJC draws a narrow and problematic distinction. According 

to the OAJC, Section 8531 of the Retirement Code does not obligate the 

Commonwealth to make good on Pocono Mountain Charter School’s defaulted PSERS 

payments.

4 However, pursuant to the “State Guarantee” codified in Section 8531, the 

Commonwealth may nonetheless be responsible for guaranteeing pensions once 

payments become due at a future time. 24 Pa. C.S. § 8531. 

On the other hand, our holding today could lead to loss of PSERS credit for 

charter school employees. The Retirement Code defines “credited service” as follows:

School or creditable nonschool service for which the required contributions 

have been made, or for which the contributions otherwise required for 

such service were not made solely by reason of any provision of this part 

relating to the limitations under section 401(a)(17) [related to a 

compensation limit] or 415 of the Internal Revenue Code of 1986 (Public 

Law 99-514, 26 U.S.C. § 401(a)(17) or 415), [providing for limits on 

contributions] or for which salary deductions or lump sum payments have 

been agreed upon in writing.

24 Pa.C.S. § 8102 (emphasis added). The OAJC downplays the Commonwealth’s and 

the PSERS Board’s fear that the charter school employees here will lose credited 

service, calling it a “bald assertion.” OAJC at 20, n.12. The OAJC avoids confronting 

the problem by stating that the issue is not before us. Id.

 

4 Currently, the amount of the deficiency is $87,700.32. See OAJC at 6.
[J-67-2016] [OAJC: Donohue, J.] - 4

It is true that our decision here does not turn upon the question of who will bear 

the burden of lost retirement benefits. Nonetheless, the Commonwealth and the

PSERS Board raise a valid concern. Our holding today reveals and underscores the 

grievous funding risk manifest by the CSL and Retirement Code provisions at issue in

this case. This risk is realized when a charter school operator ignores its duty to 

contribute to the fund on behalf of its employees. Today’s case uncovers a yawning

gap in the pension funding scheme for Pennsylvania’s charter school employees.

It is incumbent upon the General Assembly to provide a workable funding 

mechanism. When a charter school operator neglects its duty to contribute to the 

PSERS fund on behalf of its employees, and then absconds, defrauds, defaults, or 

ceases to exist, the Commonwealth (i.e., the taxpayers of Pennsylvania) should not be 

responsible for the operator’s delinquency. Likewise, charter school employees should 

not be faced with the risk of losing rightfully earned credits (i.e., dollars). As the law 

currently stands, a charter school operator, such as the one at the center of this dispute, 

has no accountability. It seems clear as day that the General Assembly proactively 

should impose procedural safeguards that will attach while a charter school is still viable 

and operating, as a hedge against any prospect of future default. For example, the 

General Assembly could choose to amend the CSL by requiring charter schools to post 

bond sufficient to ensure compliance with their PSERS contribution obligations. 

Obviously, an inability to post bond would raise a red flag signaling that a charter should 

not be approved.

While the OAJC is correct that we are not called upon today to determine who 

loses in this situation  the Commonwealth as ultimate guarantor for PSERS or the 

teachers in losing credit they have earned  I urge the General Assembly to address 

this looming issue.