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Childhood board sues state over fund sweep

The Arizona Early Childhood Development and Health Board asked the Arizona Supreme Court on March 30 to prohibit the transfer of interest earnings from the board’s fund to the state general fund, arguing that the law mandating the sweep is illegal under the state Constitution.
The court has decided to consider the case without oral arguments on June 1.
The court gave the state until April 20 to respond to the petition, and set a May 4 deadline for the board to reply to the state’s response.
The court could still decline jurisdiction, but it will consider the briefing, said Chuck Blanchard, attorney for the Early Childhood Development and Health Board.
The petition for special action stemmed from a law passed in January to balance the fiscal 2009 budget deficit that transferred $7 million in interest earnings from the board’s fund to the state general fund.
The board argued in its petition that the legislation violated the constitutional protection for voter-approved laws because it diverted funds allocated by voter initiative without furthering the purpose of that proposition and it was not approved by a three-fourths vote of the Legislature.
The Board is seeking to declare the fund sweep unconstitutional and to prohibit its transfer and spending by the state.
The special action named Gov. Jan Brewer, State Treasurer Dean Martin and State Comptroller D. Clark Partridge as respondents in their official capacity.
In a statement, the board argued that S1001, passed by a simple majority and signed by Brewer in January, is unrelated to the purposes served by First Things First.
Republicans are proposing to sweep $7 million from the fund’s interest earnings for fiscal 2010.
The board, whose operations are funded by revenue from tobacco taxes, has collected more than $300 million since its inception, a pot of money that lawmakers have paid close attention to as they work to close the budget deficit.
In February, the board approved emergency funding of $48 million for early childhood development programs and grants, moving faster than previously planned in response to the state's financial woes.
Lawmakers had expressed concern that a huge pot of money is just sitting there and not being used for services in these difficult times. They argued the board had set up a bureaucracy that carries administrative costs, but that actual projects have yet to be delivered.
— Reporter Christian Palmer contributed to this report.

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