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Court of Appeals blocks Land Department funding scheme

Land Department Commissioner Maria Baier, GIS Manager Gary Irish and GIS Project Manager Ryan Johnsonwere among Land Department employees who were relieved to hear that the agency may not have to lay off more than 100 workers during the holidays. (Photo by Evan Wyloge/Arizona Capitol Times)

Land Department Commissioner Maria Baier, GIS Manager Gary Irish and GIS Project Manager Ryan Johnson. (Photo by Evan Wyloge/Arizona Capitol Times)

The Arizona State Land Department will have to rely on its backup plan for funding after the Arizona Court of Appeals forbade it from the proceeds from trust land sales for its budget.

The Court of Appeals on Thursday lifted a temporary stay on an injunction that allowed the Land Department to fund itself through the sale of state trust lands. The appellate court imposed the stay in 2010 after a trial court judge ruled that the funding mechanism set up through the Trust Land Management Fund violated the Arizona Constitution, but refused the department’s request to extend it for the new fiscal year.

Fortunately for the Land Department, the Legislature established a contingency for just such an occasion. The fiscal year 2012 budget included a provision allowing the department to use about $9.9 million from the Arizona Department of Administration’s risk management revolving fund, which insures state agencies.

Land Department Director Maria Baier said she will not ask the Arizona Supreme Court to reverse the Court of Appeals’ ruling, and will instead focus on the merits of the case. Court of Appeals Presiding Judge Patrick Irvine wrote in the Thursday ruling that the court expects to consider the Land Department’s appeal in September, though the court has not yet decided whether to schedule oral arguments in the case.

“We are not going to appeal the denial of the stay. We are just going to welcome the opportunity to make our oral arguments in September,” Baier said.

Attorney Tim Hogan of the Arizona Center for Law in the Public Interest, which brought the lawsuit against the Land Department, said there was no need for the continued stay, which the Court of Appeals imposed at a time when the department had no alternative funding.

“It’s not like last December when it was going to shut the Land Department down and people (were going to) lose their jobs,” he said.

The Arizona Center for Law in the Public Interest filed suit in 2010 after the Legislature created the Trust Land Management Fund, which allows the department to fund itself with up to 10 percent of the proceeds from the sale of state trust lands. The center and its client, the Cartwright Elementary School District, argued in their lawsuit that the funding mechanism violates provisions in the Arizona Constitution and the state’s enabling act requiring the money to be used for public schools.

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