The two sides differ on whether the state should pay lease aid on two charter schools leasing district buildings.
The Minneapolis school district is taking the state to court in a $960,000 dispute over charter school rent.
The dispute involves lease aid, money that the state Department of Education pays on behalf of charter schools to rent buildings.
The state says it doesn't have to pay districts if they're both the authorizer and the landlord for a charter school, because of a law designed to prevent conflicts of interest. The state did pay the lease aid last year for a district-authorized charter in Minneapolis, but it now says that was a mistake.
Minneapolis Public Schools wants the Minnesota Court of Appeals to force the state to continue paying lease aid. The district has argued that the law was enacted to deal with conflicts of interest that had arisen among private individuals who were improperly leasing their property to charter schools they controlled. It also cited another law encouraging collaboration between charter schools and school districts.
The dispute affects annual lease payments the district expected for two schools. They are Minneapolis College Prep, which opened this fall in the district's Lincoln school building, and Minnesota School of Science, which opened last year in the Cityview school building. The state paid lease aid last year for the Cityview rental.
The state earlier this year suggested that the situation could be remedied by the schools finding a new authorizer or the district foregoing rent. An authorizer is a state-required body that exercises oversight for a charter school, which is a public school that operates independently of a school district.
That was the solution taken in Winona, where the charter school found a new authorizer in the nearby Rushford-Peterson district.
But in Minneapolis, district general counsel Steve Liss called both options unreasonable.
The district asked the appeals court to review whether the state exceeded its authority and acted arbitrarily.