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Ruling on K-12 fund could impact future voter mandates

A Superior Court judge may have given opponents of voter-mandated spending the leash they’ve been looking for to rein in big-spending initiatives for years.

Or the judge may have simply forced the authors of future initiatives to spend a bit more time parsing their language.

Either way, Maricopa County Superior Court Judge Kenneth Mangum’s decision in a case over K-12 funding could be felt for years to come.

The most immediate impact of the ruling, which is being appealed and may well end up being decided by the Arizona Supreme Court, could be on this year’s budget proposal, which aims to trim hundreds of millions of dollars from AHCCCS, even though voters called for the spending nine years ago.

It could be more than two years before the case is settled, and it’s impossible to say whether the ruling will stand. But if it does, the precedent it sets could be historic.

In his Feb. 9 opinion, Mangum ruled that Proposition 301, a 2000 ballot measure that required the state to increase K-12 funding each year to compensate for inflation, didn’t actually require the Legislature to make any appropriations. Several school districts and the Arizona Education Association sued the state over the Legislature’s refusal to increase base level funding by about $60 million in the current year’s budget.

The language of Prop. 301 said the Legislature “shall increase” base-level K-12 funding by a set formula. The problem, Mangum wrote, is that voters can’t force the Legislature to make an appropriation. They can make an appropriation themselves, but they can’t compel lawmakers to do so.

“While Proposition 301…states the intention of the voters of Arizona that an appropriation be made to protect the schools from the effects of inflation, the proposition by itself is not self-executing,” the judge wrote. “Moreover, as a method of lawmaking, the voters cannot require the Legislature to enact a law that provides for that appropriation.”

If Prop. 301 had been “self-executing,” Mangum ruled, there would be a case for forcing the state to increase K-12 funding. But allowing voters to force the Legislature to make an appropriation would be akin to the Legislature forcing a future generation of lawmakers to pass a bill, or forcing a governor to rescind a veto.

As lawmakers grapple with a massive budget deficit fueled, in part, by voter-mandated spending, the notion that voters cannot force an appropriation by the Legislature is appealing to conservatives who are clamoring for budget cuts. The two biggest chunks of Arizona’s budget — K-12 education and health care — include wide swaths of funding, including the Prop. 301 spending, mandated by voters.

Republican lawmakers are looking to cut AHCCCS eligibility, which was drastically expanded by Proposition 204 in 2000. Liberal groups have vowed lawsuits if the cuts are made. And some GOP legislators have expressed frustration at their inability to scale back education funding, which is protected by Prop. 301.

If the higher courts agree with Mangum’s ruling and interpret it as a limit on voters’ ability to dictate spending, it might stop future initiatives like Prop. 204 and Prop. 301.

“It might produce a fundamental change in what ballot measures can do,” said Donald Peters, an attorney for the plaintiffs.

But even if the higher courts affirm the ruling, the impact may be more semantic than substantive. The crux of Mangum’s decision appears to be that Prop. 301 didn’t make an appropriation itself — it ordered the Legislature to make an appropriation.

If Prop. 301 had simply stated that a certain amount of money shall be appropriated each year, instead of saying the Legislature shall appropriate it, the ruling may have been different, Mangum wrote.

Peter Gentala, an attorney for the Arizona House of Representatives, said the ruling probably won’t have any major impact, outside of forcing the authors of ballot initiatives to be more careful with their wording.

“It’s a strong ruling.… But it’s not a paradigm shift,” he said. “It doesn’t change anything. It all comes down to drafting.”

Voters in 2004 already approved a constitutional change that requires any ballot initiative that mandates spending to include a dedicated funding source besides the state’s general fund. As a result, more recent voter mandates, such as the early childhood development program First Things First, have been more successful in court when the Legislature moved to take their money.

Tim Hogan, another attorney representing the plaintiffs in the Prop. 301 case, said it wouldn’t be difficult to write another ballot measure that complies with Mangum’s ruling. The authors would simply have to write the measure so it didn’t rely on the Legislature to make the annual appropriations.

“I think people who draft initiatives … are going to have to be very careful about how they do it,” said Hogan, executive director of the Arizona Center for Law in the Public Interest, a liberal advocacy group. “There might be some drafting challenges from time to time, but I think they’re all surmountable.”

The more difficult part, Hogan said, would be finding another funding source besides the general fund, as the 2004 ballot measure requires. Any replacement funding for Prop. 301 would likely include a tax increase, since the Arizona Constitution now prohibits the use of general fund money in voter-approved programs.

The issue of how far voters can go in forcing lawmakers’ hands on the budget is especially poignant as the state gears up for a probable lawsuit over AHCCCS spending. Under Prop. 204, the state must fund expanded AHCCCS eligibility with money from a court settlement with tobacco companies, as well as other “available funds.” Republican lawmakers argue that no other funds are available due to the budget deficit, and they can therefore cut Medicaid spending.

Hogan said he will sue if the Legislature passes a budget with the proposed AHCCCS cuts.

Of course, any precedent is dependent on the Arizona Court of Appeals and the Arizona Supreme Court agreeing with Mangum’s decision.

Paul Bender, an Arizona State University law professor, said he believes Mangum erred in his ruling. When the Legislature tried to sweep $7 million in interest from First Things First in 2009, the Arizona Supreme Court blocked the move, saying it violated voter intent.

The voters’ intent in passing Prop. 301 was clearly to require annual increases in

K-12 funding for inflation, Bender said. The Voter Protection Act prohibits lawmakers from violating the intent of voter-approved measures.

“It struck me as being overly technical and ignoring what the obvious intention of the proposition was,” Bender said. “The way the judge has it, all the people did was make a request for the Legislature to do something. That’s quite unlikely.”

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