Pennsylvania Education Secretary Ronald Tomalis recently found that the School District of Philadelphia acted illegally when trying to unilaterally cap enrollment at a charter school in the city. This decision has now been affirmed by Commonwealth Court and means that the School District will not get back the $1.3 million it had initially refused to pay Walter D. Palmer Leadership Learning Partners Charter School after the school enrolled more than the 675 students specified in its charter agreement. The money was owed from the 2008-09 and 2009-10 school years and the district paid it last year after being ordered to by the Supreme Court, however they had hoped to recover the money. The Palmer school denied that it had agreed to the cap and a state law taking effect from July 2008 restricts school districts from capping charter enrollment unless they secure written agreement from the charter school in question.

In an opinion filed Tuesday, the court said that the district’s attempt to unilaterally limit the number of students was invalid after the law changed and that Tomalis was correct when he said the charter was entitled to be paid for the additional students.

State law permits charters to ask the Education Department to withhold state funds from districts that refuse to pay for charter students and to instead send the money to the charter schools.

The department held administrative hearings after the Palmer school asked the department to withhold district funds. Tomalis made his decision in March 2011.

The decision isn’t good news for the School District of Philadelphia which is already facing financial problem and is required to cut $26 million in spending by June 30 and then an additional $186 million in the next fiscal year. At least six other charter schools in the city also have suits pending regarding enrollment caps, and other school districts throughout the state are likely to view the decision with dismay.

“We believe that the decision of the Commonwealth Court is very significant and is likely to have a dramatic effect on any enrollment cap battle between charter schools and districts,” Kevin McKenna, one of the attorneys representing Palmer, said Wednesday.