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Old deseg settlement generates new rivalry between St. Louis Public Schools and charters

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Two days before St. Louis voters would decide the fate of a small sales tax increase to pay for school desegregation in 1999, the woman who started the effort to get  better schools for black students asked city voters to take a “leap of faith” and back the tax.

“Without a source for funding,” Minnie Liddell wrote in a letter to the Post-Dispatch with her attorney, William Douthit, “the agreement becomes an empty set of promises, unrealized goals and positive educational outcomes that might have been.”

The tax hike, two-thirds of a penny, won big. Now it’s back in the public eye, in a dispute over who should benefit from its proceeds.

At stake are millions of dollars and what charter schools in the city warn could be the end of their existence.

Douthit, who still represents the plaintiffs’ group started by Liddell, said that from the start, the money has belonged only to St. Louis Public Schools, which were the city’s sole public education alternative when the court settlement was reached.

He joined with the city schools and other plaintiffs last month to file suit to recover $42 million they say has been misdirected to charters over the past 10 years.

“We have never looked to charter schools as part of the desegregation agreement,” Douthit said in a recent interview. “They were not in existence at the time the agreement was initiated. They have become an alternative.”

But Mike Wolff, who helped draft the settlement agreement as an education adviser to Gov. Mel Carnahan, takes the totally opposite view. Wolff, who went on to serve on the Missouri Supreme Court and is now dean of the law school at Saint Louis University, said the money was designed to flow not to the school district but to city students, including the 10,000 children who now attend charter schools.

“The contention that the sales tax was intended just for St. Louis Public School district schools,” he wrote recently, “is historically wrong and legally incorrect.”

The legal action has stirred up strong feelings on both sides, particularly because it was filed just six days after the city schools won a 75-cent property tax hike – a campaign that had the backing of the charter schools, which said they knew nothing of the impending court action.

'The contention that the sales tax was intended just for St. Louis Public School district schools is historically wrong and legally incorrect.' - Mike Wolff, Saint Louis U. law school dean

City school officials aren’t commenting on the situation, except to say in a letter from the three-member Special Administrative Board posted on the district’s website that the timing of the legal action was “unfortunate.” It came at a time that the city schools and charters had begun to work together instead of being adversaries and rivals for scarce tax money for education.

Doug Thaman, executive director of the Missouri Charter Public School Association, says that cooperative spirit will be hard to recapture. He is leading a campaign to end the legal action, with a slogan, a petition and a hashtag to #dropthesuit.

“I think there's a lot of room for common ground,” Thaman said, “working together to make sure all kids are equitably funded, after they drop the lawsuit. But until they drop the lawsuit, I don't think there's any common ground where you're meeting in the middle and at the same time someone's holding an ax over your neck.”

The 1999 settlement

Liddell first filed the lawsuit that led to the desegregation program in 1972, when she got tired of seeing her son Craton shuttled from one school to another. It led eventually to the voluntary program where black students from the city could attend school in St. Louis County and white students in the county could come to the magnet schools created in the city.

But the program was expensive, and years of efforts to bring it to an end resulted in a court agreement that all parties to the case – the Liddell plaintiffs, the state, the city schools and others – signed off on in 1999.

One key to the plan was the sales tax that would help replace money that the state had been paying to keep the program going. The $23 million it was projected to bring in would trigger about $40 million in state aid for city schools.

'No one gave thought to charter schools in the future when the settlement was worked out.' - William Danforth

The same law that set the settlement in motion also authorized charter schools for the city. But they weren’t established right away; and William Danforth, the former Washington University chancellor who was instrumental in shepherding the settlement agreement, said they didn’t really figure into his thinking or into whether proceeds from the sales tax would go anywhere but the city school system.

“No one gave thought to charter schools in the future when the settlement was worked out,” Danforth said in an email. “I assumed that the money would go to the SLPS, but perhaps we should have given thought to the problem.

“I worked hard for the tax but remember no conversations about charter schools. ... I did not see that far into the future.”

Formula changed

That future, and its financial consequences, arrived starting in 2006, when the state changed the formula it uses to pay for schools. Until that time, all of the proceeds from the new sales tax went to the city school system. Starting in that year, the Department of Elementary and Secondary Education began dividing up the money and sending some of it to charter schools.

Over time, according to the motion filed by the state and others last month, the amount that the city schools claim was wrongly diverted to the charters totaled more than $42.5 million; it figures another $8.8 million would be sent to charters in the current school year.

In January of this year, the city schools wrote to DESE and to Attorney General Chris Koster saying that the money from the sales tax had been wrongly sent to charters in violation of the desegregation settlement order. It demanded that the practice stop and that SLPS be reimbursed.

But after the parties met in February, DESE General Counsel William Thornton responded by saying simply that the state is distributing the sales tax money in accordance with state law and the court settlement.

No hint of a lawsuit

While those discussions were going on, and charter schools were lending their support to the SLPS property tax campaign, Thaman of the charter school association said the city schools gave no hint that they were challenging the sales tax proceeds going to charters.

“I met with the superintendent in January, February and March to discuss [the property tax],” Thaman said. “At no time was it ever indicated that, "Hey, we think maybe charters shouldn’t be getting this. Can we talk about this?'”

'One student does not have a higher price tag than another. They're all deserving of a good quality education.' - Doug Thaman

He said he doesn’t like the fact that the lawsuit is being painted as an SLPS vs. charters situation, but that portrayal is unavoidable, given how it has played out. In the end, he said, students are the losers, just at a point when both types of public schools -- charters and district -- were starting to work together to help everyone.

“One student does not have a higher price tag than another,” Thaman said. “They’re all deserving of a good quality education.

“...how do you talk about this and look at moving forward in the best interests of kids when you file the suit that could take away the education these kids have been entitled to and enjoying for quite some time? For a partnership to move forward, there would have to be trust, and at this point, it’s really very difficult to figure out how you can trust the leadership of St. Louis Public Schools when they’re attempting to bankrupt every charter school in the city of St. Louis.”

Wolff said one of the basic problems in the whole situation is the state’s continuing failure to fund public education at an adequate level. He pointed to last week’s actions by Gov. Jay Nixon and the General Assembly, when Nixon vetoed a change in the way schools are funded, saying it shortchanged public education, and the legislature quickly overrode his veto.

“It’s really kind of pathetic,” Wolff said. “What you do is that you force people like school administrators in the city and people who run the charter schools to get into a fight about who gets that sales tax money, which in the scheme of things isn’t that much money.

“But you’re left with so few resources from the state, you start fighting among yourselves. That’s not productive for education.”

He quoted the late state Sen. Harold Caskey, who helped push through the law that led to the deseg settlement as saying “that the most dangerous place in the state of Missouri was between a school superintendent and a dollar bill.”

Letter of the law

Both Douthit, the Liddell lawyer, and Veronica Johnson, who represents the NAACP and other plaintiffs in the lawsuit filed to recover the money from the charters, expressed sympathy for students who could be hurt by the action.

But, they said their primary responsibility is to make sure that their clients get all of the money they are entitled to, and they said that the settlement expressly said that the sales tax proceeds should go to the city school system.

Johnson disputed Wolff’s contention that the interpretation in their lawsuit is legally and historically wrong. Part of the problem, she said, was that charters weren’t a factor when the agreement was drawn up.

“If it had been possible to anticipate changes in the future,” she said, “there would have been a different settlement agreement. Perhaps there would have been different terms. But that’s all speculation. We agreed to the settlement under the terms that were written.

“The state doesn’t have any authority to do anything with the money other than collect and give it to the school district. When it decides that it wants to use it for another purpose – any purpose, it could be charter schools, feeding the homeless, additional police – it just doesn’t have the authority to do so.”

Nor could the state take money from any other revenue stream, like the Zoo-Museum District tax, and use it for something other than the purpose for which it was intended, Johnson said. But it’s wrong, she added, to paint this as a feud between the city schools and the charter schools.

“It’s really the state that is the bad guy here,” she said. “I think the state has created a situation that is deeply unfortunate, but all responsibility lies with the state. The state can fund charter schools however it wants, just as long as does it lawfully.”

'It's really the state that is the bad guy here. The state can fund charter schools however it wants, just as long as does it lawfully.' -- NAACP lawyer Veronica Johnson

Johnson and Douthit disputed that if their lawsuit ends up hurting charter schools, the result would be the opposite of what Liddell sought in the first place.

“I can’t say that I accept the idea that this is going to destroy the charter schools,” Johnson said, “or that this is going to end a choice that the children have. I think that we’ve got to make sure that the will of the voters is being honored here, in addition to the wishes of the charter school parents.

“The voters approved a sales tax for a specific purpose, which did not include funding for charter schools. And the charter schools could seek funding through other sources also. It’s not a zero-sum game here.”

Douthit recalled how Liddell and other parents funded their original court case with bake sales, rallies and other ways to bring in dollars, just to gather the data they needed to make their point. Now, he said, their crusade has to continue.

“It’s not a battle between parents,” he said. “It’s a battle for parents, to be effective advocates and ensure academic excellence for their children.”

And, he added, Liddell, who died in 2004, would approve of the course of action he and the other plaintiffs have taken.

“If she were alive today,” Douthit said, “and charter school parents asked for her assistance, in terms of organizing or mobilizing against the state, to equalize funding, she’d be there in the forefront. Not to the disadvantage of the children that she represents, but for the advantage of all children.

“That’s who Minnie was. That’s who Minnie is to those of us who knew her.”

Follow Dale on Twitter: @dalesinger

Dale Singer began his career in professional journalism in 1969 by talking his way into a summer vacation replacement job at the now-defunct United Press International bureau in St. Louis; he later joined UPI full-time in 1972. Eight years later, he moved to the Post-Dispatch, where for the next 28-plus years he was a business reporter and editor, a Metro reporter specializing in education, assistant editor of the Editorial Page for 10 years and finally news editor of the newspaper's website. In September of 2008, he joined the staff of the Beacon, where he reported primarily on education. In addition to practicing journalism, Dale has been an adjunct professor at University College at Washington U. He and his wife live in west St. Louis County with their spoiled Bichon, Teddy. They have two adult daughters, who have followed them into the word business as a communications manager and a website editor, and three grandchildren. Dale reported for St. Louis Public Radio from 2013 to 2016.