Court Opinion

ID: 4111605
Source: CourtListenerOpinion
Date Created: 2016-12-28 16:13:31.563713+00
Date Added: 2024-06-11T14:19:25.979938
License: Public Domain

[J-67-2016] [OAJC: Donohue, J.]
                   IN THE SUPREME COURT OF PENNSYLVANIA
                                 MIDDLE DISTRICT

POCONO MOUNTAIN SCHOOL                       :   No. 87 MAP 2015
DISTRICT,                                    :
                                             :   Appeal from the Order of the
                    Appellant                :   Commonwealth Court dated July 8,
                                             :   2015, at No. 2052 CD 2014 Affirming
                                             :   the Order of the Pennsylvania
             v.                              :   Department of Education dated October
                                             :   23, 2014 at No. EDU-2014-SLAP-
                                             :   000176.
PENNSYLVANIA DEPARTMENT OF                   :
EDUCATION, DIVISION OF SUBSIDY               :   ARGUED: May 11, 2016
DATA AND ADMINISTRATION,                     :
                                             :
                    Appellee                 :

                                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.
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 dollars2 but 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-problems-

with-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.] - 2
       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.] - 3
      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.

                          [J-67-2016] [OAJC: Donohue, J.] - 4