Updated: January 24, 2013 6:46AM
INDIANAPOLIS — A judge has ruled that the Indiana State Board of Education improperly counted students at five troubled schools the state turned over to private operators this year, costing an Indianapolis school district millions of dollars in state money.
Marion Superior Court Judge Patrick McCarty said in Friday’s ruling that the state board improperly counted about 1,500 Indianapolis Public Schools students as students at four of the schools, even though those youngsters had transferred to other schools before the start of the current school year.
“The State Board of Education’s decision is not in accordance with state law,” he wrote in the ruling.
The ruling means more than $6 million in state aid was wrongly transferred from Indianapolis Public Schools to the private operators of those four schools.
McCarty’s decision is another blow to outgoing State Schools Superintendent Tony Bennett, who lost his re-election bid in November. Bennett had pushed for the takeovers of the four Indianapolis schools and one in Gary. It was unclear how the ruling would affect takeovers in IPS or at Gary’s Roosevelt College and Career Academy.
IPS Superintendent Eugene White praised the judge’s decision in the lawsuit filed by his district.
“This is a significant decision in favor of children and giving them the financial support they deserve under state law,” White said Friday in a statement. “... We encourage the state board to act quickly in restoring the appropriate funding.”
Bennett spokesman Dan Baker said in a statement that “we are currently reviewing the ruling to determine our next steps.”
In May, the state board affirmed Bennett’s decision to take over the schools, which resulted in the private operators receiving the highest level of per pupil funding in the state — twice as much as some districts — for the first six months the school year.
Bennett and the board said state law was on their side because funding for the first half of a school year is based on student enrollment counts taken during the previous school year.
But IPS protested that decision and sued, predicting that when student counts were taken this school year, it would reveal that many students at the district’s four schools taken over by the state had transferred to another IPS school or some other school.
According to the counts taken in September 2012, enrollment at IPS’ Emma Donnan Middle School and Arlington, Howe and Manuel high Schools dropped by almost half.
If the court’s decision is not appealed or overturned, several questions remain as to how the money could be returned to IPS.
That process is also complicated by the fact that Glenda Ritz, the Democrat who defeated Bennett in November, takes office in early January.
Ritz has strongly opposed the state’s takeover of the five schools. The takeovers were among Bennett’s signature accomplishments in office because the Republican was the first to use a state law that allows the state to remove schools from district control if they are rated an “F” for six consecutive years.
Bennett successfully pushed for the schools to be run by private groups — two out-of-state companies and an Indianapolis-based nonprofit.