Palm Beach County schools settle lawsuit with charters for $54M. What to know

The lawsuit targeted money raised by a 2018 property tax increase that was not shared with the public schools run by private organizations.

Palm Beach Post | By Katherine Kokal | April 2, 2024

Palm Beach County school board leaders will vote Wednesday, April 3, on a $54 million settlement in a lawsuit that stems from money raised by a 2018 property tax increase that was not shared with charter schools.

If approved, $54 million will be divided among 45 charter schools that have opted to receive past-due referendum money and interest. The school board’s agenda does not list the amount of money to be awarded to individual schools.

The settlements end a yearslong dispute about whether Palm Beach County’s charter schools were entitled to money collected from the referendum approved by voters for school safety initiatives and higher teacher pay. That referendum, which was again approved by voters in 2022, generates about $200 million each year.

Although the district pitched the referendum as a way to support “non-charter district schools,” the now-shuttered Lake Worth charter school Academy for Positive Learning and the Lantana charter school Palm Beach Maritime Academy sued the school board after the referendum’s passage, arguing that all public schools were entitled to a portion of the money.

In 2021, the Fourth District Court of Appeal agreed with charter schools. Since then, the district has handed over $60 million in “principal payments” to those schools. The schools are limited to using the money for day-to-day operating expenses, textbooks, technology, transportation, building, remodeling, and paying debts, according to the settlement.

At issue now in the suit was whether the school district also was required to share millions in retroactive payments to charter schools to cover the time between the start of the property tax increase in 2019 and the appeals court decision in 2021.

Last June, the school board filed a notice that was the first step in asking the Florida Supreme Court to review the issue of the retroactive payments to charter schools. Previously, the state’s top court declined to weigh in on whether the money should be shared at all with charter schools.

But in October, the school district agreed to settle and make the retroactive principal payments to the Palm Beach Maritime Academy and other county charter schools. As part of the settlement terms, the school board dropped its appeal to the state Supreme Court and the case was closed.

Palm Beach County School District gave charter schools two options

Also in October, the district school district sent letters to charter schools informing their boards that they had two options:

• Use the principal payments for whatever they’d like if they give up the interest they’re owed on the payments.
• Receive the interest payments but then be required to use the principal funds for operating costs.

By the looks of Wednesday’s settlement, all but four charter schools opted to get the interest.

The settlement agreement in Palm Beach County is likely to impact similar cases regarding charter schools in Broward, Miami-Dade and Pinellas counties.

This settlement agreement is separate from a law that went into effect in 2023 that requires the school district to share part of its money set aside for its 10-year capital construction plan with eligible charter schools. School district officials estimate that new rule will cost the district between $189 million and $427 million over the next decade.

Which Palm Beach County charter schools will get settlement money?

Charter schools are public schools run by private organizations. They are exempt from significant state and local operating and management regulations, but they cannot charge tuition or be affiliated with religious institutions.

Here’s a list of charter schools that will get the interest payments:

Palm Beach County charter schools to receive settlements from school district

Palm Beach County voters approved a property tax hike in 2018 to benefit schools. Charter schools quickly sued to get their piece of that pie. Here are the schools that will now receive settlements.