The unanimous ruling announced today by the Supreme Court of Georgia means the Atlanta school system can't deduct millions of dollars from its revenue to pay for its expenses before distributing the money to startup charter schools.
The justices decided that state law is clear regarding how the money is to be distributed to the schools.
In May 2012, Atlanta Public Schools announced that it planned to subtract $38.6 million to pay pension liability expenses before distributing money to its traditional and charter schools. In August, eight charter schools sued, leading to the Supreme Court ruling.
Atlanta Public Schools officials have argued that all schools in the system share services, so all of them should have to deal with the district's financial problems.
The charter schools said they shouldn't be responsible for a pension debt they had nothing to do with. The charter schools don't participate in the pension system.
The ruling, written by Chief Justice Hugh Thompson, suggests that the Atlanta system should seek to change state law if it doesn't agree with the current funding formula.
"The proper remedy for appellants' opposition to the language of the local revenue funding formula as written lies within the General Assembly," Thompson wrote.
The Atlanta newspaper reports that the ruling now leaves Atlanta's traditional public schools having to pay off an old pension liability that has grown to about $550 million.
Advocates for charter schools lauded the decision.
The Atlanta system's decision to withhold funding from start-up charter schools "in order to pay for the district's decades-old unfunded pension obligation was a violation of state law," wrote Matt Underwood, executive director for Atlanta Neighborhood Charter School, in a letter to families Monday.
"This ruling is the final step in the judicial process related to this issue — there can be no further appeal," he wrote.
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