Can a Virginia school board fund a charter school at a lower per-student rate than its other schools without violating § 22.1-212.14?

Plain-English summary

Delegate Manoli Loupassi asked two related charter-school funding questions about the October 6, 2008 Richmond School Board / Patrick Henry School of Science and Arts agreement. First, did Article 2, § D, which made Patrick Henry pay startup costs (library and media center startup, principal's first six months of salary, furnishings, identified capital needs, and ADA renovations) out of private tax-deductible donations rather than per-student state and local funds, violate § 22.1-212.14(D)? Second, did the School Board violate § 22.1-212.14 by allocating less per-student funding to Patrick Henry than to other schools in the division?

AG Cuccinelli answered the first question by following his own earlier 10-010 opinion (issued the prior month for Delegate Morrissey on a similar question). Section 22.1-212.14(D) prohibits financial disincentives only within "funding and service agreements." A funding agreement refers to the ongoing operations of the school after it opens, not the preconditions for opening. Startup costs for the library and media center are distinct from the ongoing "media and library services" listed in § 22.1-212.14(C). Because the § D costs were startup, not ongoing, they were not covered by the § 22.1-212.14(D) prohibition.

On the second question, the AG declined to rule. Section 22.1-212.14(F) addresses equity only for federal and state categorical funds, particularly the proportionate share of resources for students with disabilities. It does not impose a similar equity rule on local funds. Equal per-student funding would satisfy § 22.1-212.14(D), but the AG said it is "not axiomatic" that any inequality would violate the statute. A significant endowment at the charter school might justify a lower per-student local allocation; additional funding for the charter school would not necessarily violate the law either. Whether a particular gap is a disincentive is fact-specific, and the AG did not have enough facts about Patrick Henry's actual circumstances to decide.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why is the AG so cautious on the per-student funding question?
A: Section 22.1-212.14(F) mandates proportionate share only for federal/state categorical funds. The statute leaves local funding to negotiation, and the test under (D) is whether the agreement "constitute[s] a financial disincentive." That requires a factual assessment of the school's full financial picture, not a math comparison.

Q: What endowment could justify lower per-student funding?
A: The opinion gave only the example: a significant endowment at the charter school. The point is that the statute looks at the funding agreement's effect, not just nominal per-pupil dollars.

Q: Does this mean Richmond could underfund Patrick Henry?
A: The opinion does not bless that. It says it cannot rule without facts. A funding agreement that, taken as a whole, made the charter school's establishment financially unworkable could still violate § 22.1-212.14(D).

Q: How does the AG's 10-010 opinion fit in?
A: 10-010 (Delegate Morrissey, March 4, 2010) addressed the ADA-compliance precondition in the same agreement. This opinion (10-014, April 20, 2010) extends the same startup-vs-ongoing distinction to the startup costs for library, media center, principal's salary, furnishings, and identified capital needs.

Background and statutory framework

Article 1.2, Chapter 13 of Title 22.1 (§§ 22.1-212.5 through 22.1-212.16) governs Virginia public charter schools. The relevant subsections:

• § 22.1-212.14(C): list of services the local board may provide (food, custodial, maintenance, curriculum, media and library, warehousing, merchandising, etc.).
• § 22.1-212.14(D): no financial incentive or disincentive in funding/service agreements.
• § 22.1-212.14(F): proportionate share of federal/state categorical funds (especially for students with disabilities) must be directed to charter schools serving those students.

The AG's distinction between startup costs and ongoing operations is the same one applied in 10-010. Library and media center "services" under (C) are ongoing operations once the school is running; the cost of buying initial books, shelving, or computers to open the media center is a startup capital cost.

Citations

• Va. Code Ann. § 22.1-212.14(D) (no disincentive in funding/service agreement)
• Va. Code Ann. § 22.1-212.14(C) (list of services)
• Va. Code Ann. § 22.1-212.14(F) (proportionate share, federal/state categorical funds)
• 2010 Op. Va. Att'y Gen. No. 10-010 (companion startup-costs opinion)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2010/10-014-Loupassi.pdf

Original opinion text

COMMONWEALTH OF VIRGINIA
Office of the Attorney General
Kenneth T. Cuccinelli, II

900 East Main Street
Richmond, Virginia 23219
804-786-2071

Attorney General

April 20, 2010

The Honorable G. Manoli Loupassi
Member, House of Delegates
6002-A West Broad Street, Suite 200
Richmond, Virginia 23230

Dear Delegate Loupassi:

I am responding to your request for an official advisory opinion in accordance with § 2.2-505 of the Code of Virginia.

Issue Presented

You inquire whether a specific provision of the charter agreement between the School Board of the City of Richmond and the Patrick Henry School of Science and Arts violates § 22.1-212.14(D). You also ask whether § 22.1-212.14 prohibits the School Board from allocating less funding per student attending the charter school than for other schools in the division.

Response

It is my opinion that the provision of the charter agreement between the School Board of the City of Richmond and the Patrick Henry School of Science and Arts about which you inquire does not conflict with § 22.1-212.14(D). With respect to your second inquiry, I lack the factual background necessary to determine whether a disparity in funding exists and, if so, whether it would constitute an impermissible disincentive.

Background

You provide a copy of the agreement between the School Board of the City of Richmond ("School Board") and the Patrick Henry School of Science and Arts ("Patrick Henry") dated October 6, 2008 ("Agreement"), for a public charter school. You relate that the Agreement requires that certain "start-up" costs be paid out of private funds raised by Patrick Henry and not from the per-student state and local funding allocated to Patrick Henry by the School Board. Further, you indicate that the School Board intends to fund Patrick Henry on a per-student allocation that is less than that provided to other schools in the division. Therefore, you inquire whether the Agreement and the per-student allocation would violate § 22.1-212.14.

Applicable Law and Discussion

Article 2, § D of the Agreement ("§ D") requires Patrick Henry to

operate on a financially sound basis under applicable state law, School Board policy, and this Charter Agreement. [Patrick Henry] submitted a detailed budget for school years 2009-2010, 2010-2011, and 2011-2012, which now appears as Appendix E to its supplemented application and which was based on [Patrick Henry] opening for operation on July 27, 2009. Other than startup costs for the library and media center, the principal's first six months of salary, furnishings, and any identified capital needs, [Patrick Henry] represents that it can operate the school on the state and local funds requested. Funds to cover the start-up costs and for the intended ADA renovations will be derived through tax-deductable contributions as described in the Budget Narrative of the supplemented application. The School Board and/or Richmond Public Schools shall not assume any responsibility for financial liabilities incurred by [Patrick Henry] in excess of budgeted revenues and/or donations received.

Article 1.2, Chapter 13 of Title 22.1, §§ 22.1-212.5 through 22.1-212.16 governs the establishment of charter schools. Section 22.1-212.14(D) provides, in relevant part, that "[f]unding and service agreements between local school boards and public charter schools shall not provide a financial incentive or constitute a financial disincentive to the establishment of a public charter school, including any regional public charter school." A prior opinion of the Attorney General noted that:

The prohibition in § 22.1-212.14(D) is narrow and prohibits a financial "disincentive" in the "funding and service agreements" between a local school board and a public charter school. Therefore, even if [a term of the agreement between a local school board and a charter school] is a financial impediment or is financially disadvantageous in some way, if this requirement does not relate to the "funding or service agreements," it is not prohibited by § 22.1-212.14(D).[1]

Thus, if the term of the Agreement addressing start-up costs does not relate to "funding or service agreements," it is not prohibited by § 22.1-212.14(D).

Section 22.1-212.14(C) provides guidance regarding matters that are "services" for purposes of charter school funding:

Services provided in the public charter school by the local school board or the relevant school boards, in the case of regional public charter schools, may include food services; custodial and maintenance services; curriculum, media, and library services; warehousing and merchandising; and such other services not prohibited by the provisions of [Article 1.2] or state and federal laws.

Although "start-up costs for the library and media center" are among the items addressed in the Agreement, these must be distinguished from "media, and library services."[2] A funding agreement in this context does not refer to a precondition for opening the doors of the school. Rather, § 22.1-212.14(D) refers to a funding agreement between a school board and a charter school after the school has opened. In other words, the "funding agreement" refers to the ongoing operations of the school, not startup costs.[3]

Because the startup costs about which you inquire do not relate to either funding or service agreements, it is my opinion that § D of the Agreement does not violate § 22.1-212.14(D).

You also ask whether § 22.1-212.14 prohibits the School Board from providing less funding, on a per-student basis, to Patrick Henry than it does to other schools within the division. Section 22.1-212.14(F) addresses equity in per-student funding:

Notwithstanding any other provision of law, the proportionate share of state and federal resources allocated for students with disabilities and school personnel assigned to special education programs shall be directed to public charter schools enrolling such students. The proportionate share of moneys allocated under other federal or state categorical aid programs shall be directed to public charter schools serving students eligible for such aid.

Section 22.1-212.14(F) does not impose requirements upon the allocation of local funds. Certainly, equal funding per student between a charter school and other public schools within the district would satisfy the mandate that there be no financial disincentive for charter school funding agreements. It is not axiomatic, however, that a per-student funding agreement that is not exactly the same throughout the district would necessarily violate § 22.1-212.14(D). For example, there may be circumstances, such as a significant endowment for a charter school, that would justify a less than equal funding agreement. Conversely, additional funding for a charter school would not necessarily violate the statute. I do not, however, have sufficient facts to determine whether a disparity in funding exists at Patrick Henry or, if it does, whether the disparity would constitute a "disincentive" in a funding agreement.

Conclusion

Accordingly, it is my opinion that the provision of the charter agreement between the School Board of the City of Richmond and the Patrick Henry School of Science and Arts about which you inquire does not conflict with § 22.1-212.14(D). With respect to your second inquiry, I lack the factual background necessary to determine whether a disparity in funding exists and, if so, whether it would constitute an impermissible disincentive.

With kindest regards, I am

Very truly yours,

Kenneth T. Cuccinelli, II
Attorney General

1. 2010 Op. Va. Att'y Gen. No. 10-010, *2, available at http://www.vaag.com/OPINIONS/2010opns/10-010-Morrissey.pdf.
2. VA. CODE ANN. § 22.1-212.14(C) (2006).
3. See 2010 Op. Va. Att'y Gen., supra note 1, at *2.