School Board offers its aid exit

Desegregation funds at issue

— The Little Rock School Board on Thursday voted 6-0 to seek a $430 million phaseout of state desegregation funding over seven years, a counterproposal to the state attorney general’s $396 million proposal last August.

The district’s proposal envisions desegregation aid being reduced by $2.45 million each year for three years to the three Pulaski County school districts, beginning in 2011-12. Then the annual cut to the districts would be $2.5 million in each of the following three years before it would end by 2017-18.

The board’s offer is expected to jump-start negotiations among representatives of the attorney general’s office, the three Pulaski County school districts and black students known as the Joshua intervenors.

Negotiations on ending desegregation payments in the 26-year-old Pulaski County school desegregation lawsuit have been on hold while state officials waited on a Little Rock School District response.

Act 395 of 2007 authorized state officials to negotiate a seven-year phaseout of the payments.

Those payments stem from a 1989 financial settlement of desegregation-case issues between the state and the three districts.

The 1989 agreement did not set an ending date for desegregation payments. But state officials argue that the payments should stop when the districts are declared unitary. The Little Rock district was declared unitary in 2007. The North Little Rock and Pulaksi County Special districts are seeking unitary status.

The Little Rock district settlement offer doesn’t include any provisions to restrict the establishment of new, state-approved, independently run charter schools in Pulaski County, although board members discussed limits or even a moratorium.

Eleven charter schools operate in Pulaski County.

Little Rock district leaders argue that the state’s approval of at least some of the Pulaski County area charter schools does not conform to state law. They contend that the charter schools are drawing high-performing, affluent students from the district, leaving it with fewer financial resourcesto serve a greater concentration of poor students and underachieving students.

The state Board of Education will meet next week to act on two more charter schools proposed for opening in Little Rock in 2010-11.

School Board member Baker Kurrus suggested that the district attempt to settle the desegregation case on a specific dollar figure, but reserve the district’s right to deal with the charter school issue at a later time in whatever venue necessary.

“I don’t want the state to think we are stiff-necked and uncompromising,” Kurrus toldChris Heller, one of the school district’s attorneys. “Would it be of any help at all if we sent you back to say we are willing to bend - slightly - as long as we don’t give up so much that we can’t succeed and that we are still concerned about charters? Could we send you forth for another two weeks to grapple with them?”

Heller had pressed the board to give him direction on the charter school issue. He said he didn’t want to misstate the board’s position. He warned that a hard stand against charter schools could mean an end to the settlement negotiations.

“It’s a critical issue on whether negotiations go forward,” Heller said. “I don’t want to say we can compromise if the board doesn’t want to.”

If negotiations break down,the state is likely to go to federal court to end annual desegregation payments to the three Pulaski County districts.

Those payments - which fund magnet schools and majority-to-minority student transfer programs, as well as other programs - have grown to about $68 million a year, of which $37 million a year goes to Little Rock. Since 1991-92, the state has paid $819 million in desegregation aid to the three districts, according to Arkansas Department of Education figures.

Little Rock School Board members have been divided for months on how hard to fight the state over charter schools, with some board members willing to litigate and others reluctant.

Arkansas Assistant Attorney General Scott Richardson toldthe board Thursday that he understood that charter schools are a big issue but that he doesn’t have the authority - and can’t get the authority - to agree to a moratorium on charter schools.

Richardson warned that there are many people who do not believe the Little Rock district could win a lawsuit to restrict the charter schools, and he encouraged the board not to abandon settlement efforts.

“From the state perspective, we don’t think that is the best way,” he said. “We think the best way is to continue to negotiate and work hard to come up with a resolution and provide some certainty to these districts [and] end the funding. We don’t think the best option for the district is to kill negotiations at this point.”

Board member Mike Daugherty, who has been the board’s most outspoken member in favor of challenging the state’s approval of charter schools in Pulaski County, made the motion to authorize Heller to pursue a financial settlement that would cost the state $430 million over seven years.

The proposal calls for the Little Rock district to maintain its special-program magnet schools and the majority-to-minority student transfer program that would enable students from the neighboring North Little Rock and Pulaski County Special school districts to attend schools in Little Rock.

The regular state aid that the district would get for each of those magnet school and interdistrict transfer students would help the district offset the loss ofmillions of dollars in state desegregation money.

The Little Rock district attracts 1,545 magnet school students from outside the district, while 895 district students now transfer to neighboring districts.

If the district can keep those students, while losing a smaller number to charter schools, plus cut staff by about 300, reduce costs and draw on reserves, the district would generate about $41 million by the 2016-17 school year, according to a scenario by Kelsey Bailey, chief financial officer.

That would offset the loss of desegregation money plus $5 million a year that the Pulaski County Special and North Little Rock districts contribute to the six original magnet schools in Little Rock.

Arkansas, Pages 14 on 11/06/2009

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