A Maricopa County Superior Court judge set aside a week in October for a hearing that will decide whether the state has to pay back $1.3 billion the Legislature illegally withheld from schools as it grappled with billions of dollars of red ink during the recession.
Attorneys representing lawmakers have until July 28 to file a written objection to Judge Katherine Cooper entering an immediate judgment that would force the state to reset the starting point for calculating future inflation adjustments.
Attorney Don Peters, who represents the school districts, said Cooper expressed during a 20-minute conference of the parties’ attorneys today that she was inclined to enter the judgment sooner rather than later – a request Peters made in writing earlier this week – but she first wants to hear from the state’s lawyers.
Resetting the per-pupil funding level would cost the state an estimated $317 million in the current year. That funding level would then be the new baseline for annual education funding increases in future years.
Still unsettled is whether the state should repay schools the money it should have paid them between fiscal years 2009 and 2013. If the courts rule that the state is on the hook for that estimated $1.3 billion, it could throw the state budget into disarray.
Peters said there was no discussion of a possible appeal during the 20-minute telephonic conference of lawyers.
But Gov. Jan Brewer said July 17 the state intends to appeal Cooper’s ruling.
Peters said the state can’t appeal until Cooper enters judgment, but the state could theoretically appeal immediately under a special action, a quicker but more difficult route.
Cooper set an evidentiary hearing on the withheld inflationary payments for the week of Oct. 27.
Peters argued in writing to Cooper that the hearing should go forward even if her July 11 ruling to reset the per-pupil funding level is appealed because the issues in the ruling don’t overlap with the issues that are the subject of the hearing.
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 less than the inflationary requirement.