State launches investigation into Broward schools related to charter school funds

The state is investigating whether Broward schools shortchanged local charter schools out of a possible $86 million from a 2018 voter-approved referendum, according to a letter sent Thursday by Education Commissioner Manny Diaz.

The investigation was announced one day after the school district filed a motion to dismiss a lawsuit by Renaissance Charter Schools, one of about a dozen charter providers that have sued the school district in recent months seeking referendum dollars.

“It has recently come to my attention that the Broward County School District is not
complying with Florida laws requiring it to share revenue collected via a discretionary tax … with its charter schools,” Diaz wrote in his letter to Superintendent Peter Licata.

“This letter serves as notice that I have opened an investigation into the allegation of
noncompliance described above, and employees from the Department may soon reach out to the district for documentation and other information relevant to this alleged noncompliance,” Diaz wrote. “Your district’s cooperation in this matter is expected.”

The end result of the investigation and the lawsuits could be another large unexpected expense for a district that is already facing a dire budget year due to declining student enrollment. Last week, the School Board agreed to use nearly $20 million in federal COVID dollars in order to pay recurring teacher raises, money that won’t be available for next year’s salaries. The district has begun a process to downsize the district, with proposals to close schools to sell property.

“I can confirm that the District has received the letter and will fully cooperate with the investigation,” district spokesman John Sullivan said in a statement to the South Florida Sun Sentinel.

The lawsuit and the investigation do not affect a 2022 referendum approved by voters to increase teacher pay and provide more money for mental health and safety and security. The state Legislative passed a law in 2019 explicitly requiring school districts to provide a proportionate share of money from local referendums with charter schools on a per capita bases.

But even before the law was passed, districts were required to share money, Diaz wrote in his letter. He said two Florida appellate courts whose jurisdiction includes Broward, “have determined that revenue generated under this discretionary tax had to be shared with the district’s charter schools.”

Palm Beach County schools initially declined to share with charter schools money collected from a 2018 referendum, but were overruled and had to pay $45 million a year.

Diaz said in his letter that Florida courts have similarly required Miami-Dade County schools to share money with charter schools. No courts have ruled specifically yet in the Broward lawsuits, which were just filed in October.

“It has been alleged that Broward joined Palm Beach and Miami-Dade by instituting a
similar tax and, likewise, did not properly share the revenues with its charter schools,” Diaz wrote. ” If that is true, your District is violating Florida law and is subject to disciplinary action.”

Broward did initially share some money with charter schools — $4.6 million for safe school officers. The School Board agreed to share that money since the referendum was being passed in the wake of the Marjory Stoneman Douglas tragedy.

But the charter schools’ argued that the district should have paid the charter schools a proportionate share of the $455 million collected from the referendum from 2019 to 2023. Since charter school student make up 20% of public school enrollment, that would be about $91 million, meaning that the district may still owe the charter schools $86.4 million.

“In spite of clear, legislative intent, and constitutional requirements that charter school students to be funded the same as other students in the school district, the School Board acted contrary to the law, by placing the 2018 Secure the Next Generation referendum before voters, and by depriving charter schools of the proportion share of these 2018 … revenues,” states the Renaissance lawsuit.

In its motion to dismiss filed Wednesday, the school district argued that it was not required to share more funds than it did, and no charter schools asked for more money during the four-year period of the referendum.

“All operational funds generated by the referendum were thus properly allocated to District public schools in Broward County and are no longer in the possession of the School Board,” the district wrote in its motion. “Indeed the school board already stretched budget cannot withstand an unforeseen payout of this magnitude without dire consequences to the programs, initiatives and other support already earmarked for the underfunded District Public Schools.”

Diaz’s letter said district appeals courts have ruled that these funds are due to charter schools, even if requested retroactively.