Arizona Attorney General Terry Goddard was asked on Oct. 27 to challenge a recent law change that allows the Arizona State Land Department to use portions of proceeds from the sales of state trust land to cover its own management duties.
The request came from attorney Tim Hogan of the Arizona Center for Law in the Public Interest. Under state law the attorney general has 60 days to take action. And if that doesn’t occur, Hogan would be authorized as a taxpayer to file a lawsuit in place of the Attorney General’s Office.
Hogan’s Oct. 27 letter to Goddard argues a provision of a budget bill signed by Gov. Jan Brewer in August violates federal law and the state Constitution.
The bill, H2014, authorizes the department to take as much as 10 percent of the proceeds from state trust-land sales and the sales of the natural resources on those lands in order to cover the agencies operating costs.
Prior to the bill, the agency depended on the Legislature for all of its money. But now, Hogan claims, the department is essentially taking money that belongs to the beneficiaries of the state’s land trust, including public schools.
Hogan, who has sued to overturn state laws on several occasions, said the department’s self-funding ability created in H2014 violates the Arizona-New Mexico Enabling Act of 1910, which allowed the territories to become states as long as they complied with numerous restrictions.
One of the restrictions involved the use of money raised through state trust land sales and management. Arizona’s Constitution requires the proceeds from state trust land sales to be used to benefit various public entities, such as the K-12 school system and mining and agricultural interests.
The potential legal problems presented by the change are not limited to federal law. Hogan wrote that the self-funding mechanism reduces education spending that is constitutionally protected by the 1998 Voter Protection Act.
While Hogan argues the provision is illegal, attorneys with the Legislative Council told lawmakers a 1926 federal court precedent that upheld a similar self-funding mechanism for trust land management in New Mexico provided a sufficient basis to defend provisions of H2014 that covered the State Land Department.
Previous ballot initiatives have sought to allow the department to engage in self-funding through state trust-land sales. The change would permit the state to retain some money that would have gone towards funding the department’s land management practices.
Officials with the agency have claimed that greater funding levels, through a self-funding approach, could result in higher yields for the beneficiaries by allowing the department to prepare lands for public auction.
However, Hogan said possible benefits resulting from the statutory change affecting the department’s funding do not supersede the Constitution.
“The law is the law,” he said. “You just can’t break the law because you think it’s a good idea and you can make money from it.”
Hogan is representing Rae Ann Rumery and John Skarhus, two Valley teachers and members of the Arizona Education Association.
The Attorney General’s Office said it was reviewing Hogan’s claim and refused to comment.