Saying the money was withheld illegally, Arizona schools asked a judge on Tuesday to force the Legislature to restore at least $330 million state aid — what it should have been had the governor and lawmakers not ignored the law in the first place.
Attorney Don Peters said the Arizona Supreme Court ruled last year the state had ignored a 2000 voter-mandated requirement to adjust school funding each year to account for inflation. That ruling resulted in an additional $82 million for the current year; Gov. Jan Brewer is proposing an additional $70 million for next school year.
But Peters said all that ignores the fact that schools did not get the required inflation adjustments for four budget years. What that means, he said, is that the new inflation adjustments are being made on an artificially low base.
Peters told Maricopa County Superior Court Judge Kathleen Cooper that lawmakers set base per-student funding for this year at $3,327. He wants Cooper to reset that at $3,560.
“That figure represents what the base level would currently be if the Legislature had followed the law in each of the years when it did not do so,” he wrote in legal briefs.
That adds up.
Chuck Essigs, lobbyist for the Arizona Association of Business Officials, figures if lawmakers had been doing what they were supposed to all along, the state would owe schools an extra $330 million this coming year. That's on top of the $70 million sought by Brewer.
And that's just the tip of the financial iceberg.
Peters also wants lawmakers to cough up the approximately $1 billion cash that should have been paid to schools all along, but he said a payment plan might be worked out for that.
Rep. John Kavanagh, R-Fountain Hills, said the state can't afford even to readjust base state aid.
“We don't have $300 million right now,” said Kavanagh who chairs the House Appropriations Committee. “It creates unbelievable problems.”
“It would be absolutely devastating to the state budget and harmful to everything else that we have done in the past few years to right Arizona's fiscal ship,” added Brewer press aide Andrew Wilder.
But Peters said that's not his problem; he said the voters, in approving a sales tax hike in 2000, were clear they wanted aid to schools to at least keep pace with inflation. He also disputed Kavanagh's characterization of the state's finances, at least as it relates to education funding.
“They've got the money to do this,” he said.
“They probably don't have the money to do this and do everything else that needs doing,” Peters continued. “And if they don't have all the money for all that needs doing, they ought to increase revenues.”
Less clear is whether the state, which fought the schools for three years all the way to the Supreme Court, wants another court fight.
“I'd have to talk to the lawyers,” Kavanagh said. “If we have no ground to stand on, then obviously I'm not going to suggest that we waste legal fees and fight a losing battle.”
The state ended up picking up not only its legal costs but those of Peters and co-counsel Tim Hogan
That 2000 ballot measure boosted the state's 5 percent sales tax by six-tenths of a cent through June 30, 2021. Approved by 53.5 percent to 46.5 percent, it also requires the Legislature to forever increase funding for schools by 2 percent or the change in the gross domestic price deflater, whichever is less.
Assistant Attorney General Kathleen Sweeney had argued to the court that the mandate to increase state aid annually was a directive to lawmakers to find the money somewhere. She told the justices that infringes on the constitutional right of lawmakers to decide funding priorities.
Justice John Pelander, writing for the unanimous court, said Sweeney has her constitutional law backwards.
“Our state constitution, unlike the federal constitution, does not grant power, but instead limits the exercise and scope of legislative authority,” he wrote.
Pelander acknowledged there are limits on what voters can mandate the Legislature to do, but the judge pointed out that it was the 2000 Legislature that chose not to enact the tax hike and inflation-indexing measure themselves, but rather put the question to voters.
“Having chosen to refer the measure to the people, who then passed it, the Legislature is subject to the restrictions of the Voter Protection Act,” the judge wrote, a constitutional provision which forbids lawmakers from ignoring voter-approved mandates.