Twelve Horizon Science Academies were wrongfully disqualified from additional state funding for “community schools of quality,” the Ohio Supreme Court ruled today.

In a 5-2 per curiam opinion, the Supreme Court rejected the Ohio Department of Education’s position that the schools’ operator had to be registered as an out-of-state corporation with the Ohio secretary of state to be considered  “in good standing” within the meaning of a 2019 law.

The Court majority noted that “in good standing” was not defined in a provision of the two-year state budget establishing a $30 million Quality Community School Support Program (QCSS).  But when read in context of the entire QCSS law enacted by the legislature, the majority stated the criteria to qualify for the funds “speaks solely to the operator’s standing as a qualified and effective operator of community schools.”

The Court directed the department to provide grants of up to $1,750 for each economically disadvantage student and $1,000 for all other students attending the 12 Horizon schools across the state.

The Court’s opinion noted three other Horizon Science Academies, with the same operator as the schools that were denied QCSS grants, applied under a different section of the budget bill and received grants for the 2020-21, and 2021-22 school years.

Chief Justice Maureen O’Connor and Justices Sharon L. Kennedy, Patrick F. Fischer, R. Patrick DeWine, and Melody J. Stewart joined the majority opinion. Justices Michael P. Donnelly and Jennifer Brunner dissented without written opinions.

State Budget Enhances Funding
In 2019, the state’s two-year budget bill, House Bill 166, contained a provision for additional funding to community schools, also known as charter schools, which are public schools operated independently from local boards of education. Uncodified section 265.335 of the budget bill provided the money to schools designated as “community schools of quality” if they met certain eligibility standards.

The bill provided four ways for schools to qualify for QCSS funding. The fourth, known as Criteria 3(b)(ii), applied to schools whose operator also operates schools in other states. The Horizon schools contract with Concept Schools NFP, an Illinois nonprofit corporation that has operated community schools in Ohio for 15 years and operates schools in seven states.

The four qualifying elements of Criteria 3(b)(ii) require that one of the operator’s out-of-state schools perform better than the school district in which the school is located; at least 50% of the  students are economically disadvantaged; the operator does not have any financial viability issues; and the operator is “in good standing in all states where it operates schools.”

Academies’ Applications Denied
The Horizon schools submitted their applications for QCSS funds in November 2019, stating that Concept Schools complied with the Criteria 3(b)(ii) requirements for community-school operators. In January 2020, the department ruled Concept Schools was not in good standing because it was not registered with the secretary of state’s office and denied the grants. The denial letter did not indicate the academies’ applications were deficient in any other way.

The schools sought a writ of mandamus from the Supreme Court to compel state officials and the education department to approve their applications.

Supreme Court Examines Criteria
The Court’s opinion stated that when terms are undefined by the legislature, the Court looks to the context of the measure and construes words “according to the rules of grammar and common usage.” When reading the criteria as a whole, the requirements to receive the money under Criteria 3(b)(ii) relate to the effectiveness of the operator and serving economically disadvantaged students, the opinion stated.

The opinion explained the other three ways community schools could qualify for the program included meeting certain academic standards, qualifying for a federal grant, or receiving a grant from a nationally recognized philanthropic organization that funds charter schools. None of the ways to qualify for the state’s $30 million fund required the school’s operator to be registered as a business, the opinion stated.  And the Court noted that it is just as likely that a school qualifying under the other criteria would have an out-of-state corporation as its operator.

Evidence presented to  the Court showed that the department awarded QCSS grants to three other schools operated by Concept Schools that qualified by meeting academic performance standards at the time the program was launched.

“If the General Assembly had been concerned with a school operator’s corporate registration status as a prerequisite to QCSS grant funding, it would have imposed corporate registration requirements for schools applying under any of the criteria, not just for eligibility under Criteria 3(b)(ii),” the Court concluded.

2020-0740. State ex rel. Horizon Science Academy of Lorain, Inc. v. Ohio Dept. of Edn., Slip Opinion No. 2021-Ohio-1681.

Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion, but only for noteworthy cases. Opinion summaries are not to be considered as official headnotes or syllabi of court opinions. The full text of this and other court opinions are available online.

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