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Legislature faces new lawsuit over money for school construction

Lockers in empty high school corridor

Just as one lawsuit on education funding is being settled, state lawmakers face a new one, this one over what challengers say is their failure to build and maintain public schools.

Attorney Tim Hogan of the Arizona Center for Law in the Public Interest said the Legislature is effectively ignoring a 1994 ruling by the state Supreme Court that declared it is illegal to have taxpayers in each school district solely responsible for school construction.

Lawmakers, after several failed attempts, finally approved a plan that was supposed to have the state pick up the responsibility. But Hogan said the Legislature has not provided adequate funding in years.

The result, he said, has been to throw the burden back on local districts whose voters have to borrow money for what should be a state responsibility, precisely the situation the Supreme Court found unconstitutional in 1994.

Hogan is now working with local school districts that have been denied the money they need for new schools — money the state was supposed to provide — to ask Arizona judges to force lawmakers to properly fund the system.

There was no immediate response from Gov. Doug Ducey.

Under the system in place before 1994, school districts borrowed money for new construction and repairs through local property taxes.

That year the high court said it created disparities between rich districts that could afford domed stadiums and poor ones with plumbing that did not work. The court, however, refused to impose its own solution.

In 1996, the Legislature agreed to put $100 million into a special fund that could be tapped by poor districts for construction needs. It also agreed to provide another $30 million a year for nine more years.

The Supreme Court found that plan flawed, too, saying it did not meet the constitutional requirement for a “general and uniform” school system.

A 1997 alteration provided more cash. But here, too, the justices said that was not enough.

“Districts … would still need to issue general obligation bonds in order to fund major capital projects, bonds that are backed by property values within a district,” Justice Frederick Martone wrote.

The net effect, he said, was that some districts had to impose large tax hikes to meet basic needs while others, relying on the district’s wealth, could get the same net cash with a smaller tax increase.

Lawmakers eventually approved the School Facilities Board which was supposed to pick up every district’s construction needs.

But the never came up with a new source of revenue to fund the potential $300 million annual price tag, instead absorbing the cost into the general fund. That, however, worked only when the economy was good and revenues were increasing.

Hogan said that account has not been fully funded for nearly a decade. And it was replaced three years ago with a new system where school districts could seek — but not be guaranteed — grant funds.

The result, he said, is that local districts that need schools but can’t wait for a state grant once again have to turn to their voters for bond approval. And that brings the funding system back to what the Supreme Court previously found illegal.

“In some ways, we’re worse off than before,” Hogan said. At least the 1996 plan had $100 million set aside.

But Hogan said that does not mean a new lawsuit will be a slam-dunk.

One thing that could work against challengers is the recent approval of Proposition 123.

Voters were promised those dollars would go directly in the classroom, mostly for things like teacher pay and smaller class sizes.

But here’s the thing: The deal agreed to between the state and the districts that filed the original 2010 lawsuit puts no strings on that approximately $300 million a year, a figure that comes out to about $300 per student.

“They can use it for anything they want,” Hogan said. And that, he said, could allow the state to argue that schools have plenty of money for new schools and needed repairs if they just use their Prop 123 dollars for those purposes.

“We need to be able to rebut that and say, ‘No, this money’s spoken for on the operational side and here’s how it’s going to be spent,’” he said, with the capital needs still underfunded.

Hogan said he has no timeline for when the new lawsuit will be filed.

One comment

  1. Do you suppose that in two or three years after this winds its way through the courts the compromise might be Prop 3.14157 that taps into the Land Trust to settle the suit?

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