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Schools: State can settle lawsuit now, or pay big later

USchool officials are warning lawmakers that if they don’t take a deal to settle the inflation adjustment lawsuit – and soon – taxpayers could be on the hook for another $1.3 billion.

Chris Thomas, attorney for the Arizona School Boards Association, acknowledged Monday that the state has the legal right to appeal a trial judge’s ruling that it needs to provide an extra $317 million a year to schools right now. And he said that, legally speaking, the question of how much schools are owed for the years that lawmakers ignored a voter-mandated requirement to increase aid to schools is unresolved.

But Thomas said schools have offered a simple way out of the problem: Cough up that extra $317 million now – and similar amounts each year in future years – and that potential $1.3 billion hit for “back pay” would disappear.

“The state needs to understand that their window of settling this at a reasonable cost is closing,” he said.

Time is running out, with Maricopa County Superior Court Judge Katherine Cooper set to hear arguments on that back pay issue next month. If Cooper sides with the schools, that puts them in a much stronger position – and less likely to negotiate a deal.

But Senate President Andy Biggs, R-Gilbert, said he’s still convinced the state can win the whole lawsuit.

He said there’s a case to be made – at this point to an appellate court – that Cooper got it wrong and lawmakers should get credit for the years before the recession where they increased state aid above the minimum inflation figure required by the 2000 voter-approved measure. And that, said Biggs, would mean the state ultimately owes nothing.

Sen. Don Shooter, R-Yuma, who chairs the Senate Appropriations Committee, said the decision whether or not to settle has to be made by Republican legislative leadership. But Shooter said that, personally, he thinks it’s time to talk rather than fight.

“My inclination is to fix the problem,” he said.

Shooter said it’s more than a question of putting the lawsuit in the past.

He pointed out the state already is looking at deficits for future years, with or without resetting the state aid to where Cooper said it belongs, even without the possible $1.3 billion payout.

“That kind of a burden on us would collapse us,” Shooter said.

Biggs, however, said all that is irrelevant, saying the state can’t afford even the reduced amount.

The question of whether to deal or not also has become an issue in the governor’s race.

Democrat Fred DuVal is urging the state to stop fighting the new base level and settle the matter once and for all.

Republican Doug Ducey said he supports continuing the legal battles, at least for the time being. But he said that, if nothing else, withholding the money now it would provide some time to come up with a new way of dividing up state aid, though he had no specifics.

The schools already have a ruling from the Arizona Supreme Court that lawmakers ignored the 2000 voter-approved mandate for annual inflation adjustments. The justices sent the case to Cooper, who already has said per-student funding needs to be reset where it would have been had legislators stopped complying with the law in 2010.

But attorneys for the state continue to battle not just the back pay but even resetting the base. The resulting delay is concerning parents and school officials.

At a press conference Monday, Frank Davidson, superintendent of the Casa Grande Elementary School District, said teachers are leaving his district – and the state – to find better-paying jobs elsewhere. And he said it’s no simple matter to replace them.

“If I send a recruiter back to Pennsylvania or Illinois and they’re sitting beside recruiters from Texas or North Carolina or Florida or California, and our salaries are substantially less than those other states, what’s a new teacher to do but choose where they’re going to make the most money straight out of college?” he said.

Jen Darland, whose two children attend Fruchthendler Elementary School in Tucson, said the failure of lawmakers to fund inflation for years means that neither of her children have ever been in a fully-funded classroom.

“For me and the parents of more than one million students that attend Arizona’s local neighborhood public schools and charter schools, this is personal,” she said. “Our kids cannot wait another year.”

The press conference came exactly a year after the Arizona Supreme Court ruling that lawmakers had violated the inflation-funding law. Tim Ogle, executive director of the Arizona School Boards Association, called that “a disturbing milestone.”

Attorney Don Peters, who is representing all the challengers, including parents and the Arizona Education Association, said he made the first written offer to the Attorney General’s Office to settle in February. Then, with no response, he filed legal papers in Superior Court last month, after Cooper’s ruling on the $317 million, formally agreeing to drop any claim for back funds in exchange for a deal.

The net difference would be an immediate additional $279 for each student in schools, to $3,609 a year.

“It’s important for you to know that the schools have been trying to get this resolved,” Peters said.

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