Firm successfully defends Orleans Parish School Board

A federal judge has denied an attempt by Lusher and Lake Forest charter schools to halt a New Orleans school funding formula.

Judge Jane Triche Milazzo said the plaintiffs would not experience irreparable harm if the formula proceeds for now, according to papers filed in Louisiana’s Eastern District court Tuesday (Sept. 27).

Nor did they convince her that the Orleans Parish School Board had violated their contracts. If the case moves forward, “plaintiffs’ reading of the funding provision is unlikely to prevail,” she wrote.

Finally, Milazzo declined to rule on whether the funding formula had been adopted legally, saying state courts should consider the matter first.

Suspending the formula would have thrown New Orleans public schools into financial disarray, because their budgets rely on its calculations.

Plaintiffs’ lawyer James Brown said Lake Forest and Lusher “respect the Court’s ruling and are considering their next legal options.”

Superintendent Henderson Lewis Jr. thanked “our schools, teachers, families and community members” who helped develop the school funding plan, which “equitably funds services for our students with the greatest needs,” he said.

The case delved into obscure but important reaches of public finance, centering on the question of which students should get more money from the government.

Louisiana school districts get a certain amount of taxes from the state each year based on their enrollment. The total is calculated from a formula developed by the Louisiana Board of Elementary and Secondary Education. BESE assigns a base amount per student, and builds on extra fractions from there for children who need more help, such as those with disabilities.

Usually, from there, each local superintendent proposes a budget that spreads money around their system as they see fit.

But New Orleans has a unique education system comprised mostly of independent charter schools that set their own budgets, under two authorities — the Louisiana Recovery School District and the Orleans Parish School Board. So it needed a more formal tax distribution process. Hence Act 467 of 2015, which requires the two districts to parcel out money based on a formula that takes students’ needs into account.

This spring, the two districts worked together to cobble together their separate funding plans from previous years. The unified formula emphasizes students with disabilities, with a small extra amount for each gifted student. It also provides extra for English-language learners and students who are significantly behind.

Overall, Orleans Parish charters got less per student than they were used to, because the new formula takes more off the top for special education than OPSB did in the past.

Some Orleans charters’ budgets grew because they enrolled a lot of needy students. But the opposite was true for Lake Forest and Lusher, where the hit was magnified by their large share of gifted students. Both have academic and parent-participation entrance requirements. Lake Forest stands to lose about $200,000 and Lusher more than $550,000, their lawyers said in August.

Lusher chief executive Kathy Riedlinger cast the lone vote against the unified funding formula as part of the working group. Brown publicly told Lewis if he adopted the plan, his clients would sue. He did and they did.

Milazzo had sounded skeptical of the plaintiffs’ case during the August arguments, and she came down definitively on the side of the Orleans Parish School Board in Tuesday’s order.

Lusher and Lake Forest argued that the School Board had violated their contracts. Milazzo disagreed. In order to receive a preliminary injunction, the plaintiffs must show they are likely to prevail on the merits of the case. “This court … finds it unlikely that plaintiffs will succeed in proving that Act 467 substantially impairs the operating agreements,” she wrote.

The plaintiffs said that when they negotiated their current contracts with the School Board in 2011, they were guaranteed a certain amount of money per student.

But Milazzo wrote, “It is obvious to this Court that there was no mutual intent of the parties to guarantee plaintiffs funding,” calling the testimony “unequivocal.” In fact, the School Board “refused to agree to the addition of language guaranteeing any level of funding.”

Plaintiffs also need to show they will experience “irreparable harm” without an injunction. Milazzo dismissed that as well. “A harm is irreparable where there is no adequate remedy at law, such as monetary damages,” she wrote, but if the plaintiffs won, they could recoup the estimated $754,000 to their budget.

Furthermore, she said she could not consider the uncertainty of Lake Forest and Lusher’s future funding because the formula expires June 30, 2017. At that point, the funding plan becomes the province of a different law, Act 91 of 2016, which folds the Recovery charters back into the Orleans Parish system.

The plaintiffs did not immediately respond to a request for comment. However, Milazzo’s ruling leaves the door open for them to continue part of their fight in state court. The plaintiffs made the case that the funding formula was null, because BESE did not adopt it as Act 467 required. The defense retorted that BESE has no authority to adopt local school funding formulas.

Milazzo said the law was “ambiguous,” and posed “a novel and complex issue of state law.” But she said it was not her place as a federal judge to make a call that would affect the entire Louisiana public school system, because “there is no case law and sparse legislative history.”

Several parents of students with disabilities intervened in the case, saying that halting the formula would deny their children support.

Their lawyer, former Louisiana schools Superintendent Paul Pastorek, praised Tuesday’s decision, saying it “will make all schools in New Orleans stronger and better equipped to fairly address the needs of all children — gifted, special needs and ordinary children.”