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Lawmakers: ‘Impossible’ to repay schools money illegally shorted

fSaying it’s impossible and would wreck the budget, attorneys for state lawmakers are urging a judge to reject a request by Arizona schools for more than $1 billion in inflation funding they were not given.

The legal team headed by Bill Richards points out the state is already looking at a $1 billion deficit for the coming budget year. That includes immediately adding $336 million in funding which Maricopa County Superior Court Judge Katherine Cooper already has ordered the state to start paying now – and similar amounts every year from now on – to bring annual aid to schools up to where it should have been had lawmakers not broken the law in the first place.

“The only conclusion that can be drawn from the current deficit situation is that the state does not have funds available to pay the retroactive amounts demanded by the plaintiffs,” they wrote. “And such relief is legally and factually impossible.”

But Don Peters, who represents the schools, says that’s clearly a lie. He said there are two clear options.

“One is to further cut existing spending on other things to do this,” Peters said, adding quickly that the schools he represents are not specifically advocating that or any particular solution.

The other obvious way of getting the money is to increase revenues, meaning hiking taxes.

“They didn’t say you can’t do that,” Peters said.

“They just said, ‘The Legislature isn’t going to want to,’“ he continued. “Well, ‘I don’t want to’ is not a legal defense.”

Richards has several other legal theories about why lawmakers shouldn’t have to come up with the $1 billion in missed aid, even if it is spread out over five years as schools have offered.

He said it’s not fair to require current taxpayers, some of whom were not here during the years when schools were shorted, to now have to pick up the tab. Conversely, Richards said those who have since left the state are not financially off the hook.

But the ultimate defense is the contention by lawmakers that Cooper has no authority to order them to cough up the cash.

Richards acknowledged that the Arizona Supreme Court ruled last year that legislators and Gov. Jan Brewer had, beginning in 2009, illegally ignored a 2000 voter-approved measure hiking the state’s 5 percent sales tax by six-tenths of a cent and adding requirement to increase state aid to schools each year to account for inflation. And once approved at the polls, it became subject to the Voter Protection Act, a constitutional provision which prohibits lawmakers from repealing, altering or ignoring the measure.

But Richards contends the only powers that act gives to Cooper – or any court – is to declare what lawmakers did was illegal, precisely what the Supreme Court already has done.

“They certainly do not go so far as to authorize the issuance of complex remedial measures involving retroactive funding calculations that require the courts ignore existing school funding, tax and public finance laws and to make complex policy determinations,” the lawyers argued. “The relief sought here… exceeds the jurisdiction and authority of the court.”

Peters does not argue that courts can order the Legislature to cut the budget elsewhere or even to hike taxes.

But he said that does not leave Cooper without any legal weapons. And he said there are lots of precedents from across the nation.

Peters cited court orders requiring schools to desegregate. When districts did not cooperate, the courts themselves ended up running the schools.

“That’s not something anybody wants to see,” he said. And Peters said courts have taken over state finances, though he said “we’re not recommending anything like that.”

“But there’s no issue with the power of the court to make sure the judgment’s enforced,” Peters said. “The question is, how do you do that?”

There actually is precedent right here in Arizona.

Two decades ago, the Supreme Court declared that the system of funding school construction violated a constitutional provision that the state provide for a “general and uniform” school system.

The justices did not order a specific solution, but told lawmakers to come up with a more equitable system. But they had a stick to prod legislators along: a threat to block the state from spending any money at all on education until they did it legally correct.

Lawmakers eventually adopted a system that has withstood legal challenges.

The attorneys for the state have one other legal argument in their bid to convince Cooper not to provide that $1 billion in retroactive relief.

Richards said lawmakers had a legal opinion from Michael Braun, who essentially is the Legislature’s chief legal adviser, telling them that they could ignore the inflation mandate even though it was approved by voters in 2000. And Eileen Klein, who was Brewer’s chief of staff, testified her boss also believed the inflation mandate could be legally ignored.

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