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Home / courts / State lawmaker on effect of school funding ruling: “This is a real financial crisis.”

State lawmaker on effect of school funding ruling: “This is a real financial crisis.”

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A Maricopa County Superior Court judge told the Legislature today it must fund each public-school student at a base level of about $233 more than it currently does to begin to make up for years of not adjusting for inflation.

The order will bring an immediate price tag of more than $300 million and potentially far more for uncompensated inflationary costs from previous years.

Judge Katherine Cooper’s order is effective immediately, said Don Peters, the attorney representing school districts, but the Legislature set aside only $74.6 million for inflation for fiscal-year 2015, and it is still too early to say whether Gov. Jan Brewer will convene a special session or let the Legislature make any budget adjustments in the next session.

Brewer was not happy with the decision, saying through spokesman Andrew Wilder the imposed spending will have a disastrous effect on public safety and vulnerable populations because the money has to come from somewhere in the budget.

“A court should not substitute their judgment on policy for that of the duly elected legislators who are constitutionally responsible for budget appropriations,” Wilder wrote in an email. “Courts spend money in a vacuum while elected executive and legislative officials must balance spending within the confines of budget realities.”

Rep. John Kavanagh said the ruling means at least $190 million in immediate cuts to other parts of the state budget — and possibly as much a $1.8 billion if retroactive payments are ordered.

“This is a real fiscal crisis,” said Kavanagh, R-Fountain Hills, who chairs the House Appropriations Committee.

“Obviously, we will be making the payments,” Kavanagh added. “It’s certainly going to be very difficult to do this. And it’s certainly going to have a negative impact on all other areas of government.”

There is another option: Higher taxes. But Kavanagh noted that requires approval by two-thirds of both the House and Senate. “I don’t see that happening,” he said. “I see some real belt-tightening if, in the end, this ruling stays as is.”

And Kavanagh said if retroactive payments are ordered, “I have no idea what’s going to happen.”

The ruling came despite efforts by Bill Richards, the attorney for the state, to convince Cooper that she should not force the lawmakers and the governor to cough up extra funds.

He argued that in some years prior to the budget cuts of 2009, schools actually got a bigger increase in state aid than legally necessary. Richards said that means schools really aren’t owed anything now — or certainly a lot less.

But Cooper called such arguments “disingenuous.” The judge flat-out rejected the contention the state simply cannot afford the increased aid.

“Cost does not defeat jurisdiction,” she wrote. “As a practical matter, if it did, the courts could never order anyone to anything that costs money.”

Cooper ordered the Legislature to fund each student in fiscal year 2015, the current year, as if the amount for the previous year were $3,559.62. Lawmakers have already set the amount at $3,326.54.

The exact cost of the adjustment is still just an estimate. Chuck Essigs, a lobbyist and school finance expert, estimated it would be between $280 million and $300 million, while the Joint Legislative Budget Committee has estimated $317 million.

Cooper is saving for another day the question of whether the state has to pay an additional estimated $1 billion to backfill the unfunded fiscal years of 2009 to 2014. She will meet with attorneys July 18 to set a date for an evidentiary hearing on the matter.

Dr. Tim Ogle, president of the Arizona School Boards Association, one of the plaintiffs in the case, said the decision will provide relief for schools after enduring years of extreme budget cuts.

“We have an entire cohort of early learners, beginning with the children who entered kindergarten in 2010 and are now entering fourth grade, who have never been in a properly funded classroom,” Ogle said.

Cooper’s ruling came about because the Arizona Supreme Court ordered her to enter a judgment consistent with its 2013 ruling in favor of school districts.

The high court ruled that the state is obligated under Proposition 301, which was approved by voters in 2000, to increase education funding annually to fully account for inflation. The Supreme Court ruled that the Legislature violated the Voter Protection Act when it only provided a partial increase that was below the inflationary requirement.

Attorneys who represented Speaker Andy Tobin and President Andy Biggs did not immediately return a call seeking comment to say whether they intend to appeal. Biggs declined comment, saying the matter is still not resolved.

Michael Liburdi, an attorney who is not associated with the case, said the court can compel the Legislature to pay.

“As the court mentioned in its minute entry, it can’t tell the Legislature how to come up with the money. That’s a political question, so the state needs to find the money from some source in the budget, so a fund sweep, raise taxes, etc,” Liburdi said.

Liburdi said the court can slap the Legislature with contempt of court if it decides not to comply.
Peters said he expects the Legislature to comply.

“Nobody wants to get into a showdown,” Peters said.

The state has argued it does not have the money to pay for the unfunded, which is one of the questions Cooper will tackle when attorneys meet again in court.

“Cost does not defeat jurisdiction,” Cooper wrote. “As a practical matter, if it did, the courts could never order anyone to anything that costs money.”

The judge conceded she cannot spell out exactly how the funds should be obtained, whether through higher taxes or cutting other state programs.

“This court cannot (and will not) tell the Legislature or treasurer how to fund the adjustments, past or future,” she wrote. “These are decisions for the legislative and executive branches, respectively.”

The judge said, though, that does not make her ruling meaningless.

“The court assumes that the Legislature will do what the law requires to enable the state to comply with the Supreme Court decision,” the judge said.

Anyway, she noted, it was the Legislature itself that crafted the issue and put it to voters in 2000.

“It is not for this court to say how a judgment is satisfied, nor question the practicality or wisdom of the law that the Legislature wrote and voters enacted,” Cooper concluded.

Includes information from Howard Fischer of Capitol Media Services

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