Arizona judge orders inflation funding for schools

PHOENIX - A judge ruled Friday that Arizona public schools are entitled to at least $317 million in additional state funding for inflation this year and set the stage for further proceedings that could bump the total to $2.9 billion over the next five years.

Maricopa County Superior Court Judge Karen Cooper's ruling is a partial win for school officials who argued that the state violated a voter-approved law by failing to provide mandated inflation funding since the 2009 budget crunch.

Cooper ordered the state to reset funding levels for the current fiscal year, and she said she'll hold hearings on whether to order retroactive funding requested by school districts for past fiscal years.

With coming years' per-student funding raised to include inflation funding and possible retroactive funding for past years' funding, the five-year cost could reach an estimated $2.9 billion.

The current state budget has $9.2 billion of spending, and the state's lawyers argued that retroactive payment of inflation funding could blow a hole in the state finances.

"Granted the state faces many financial needs and challenges," Cooper said in her order. "However, it is not for this court to say how a judgment is satisfied, not to question the practicality or wisdom of the law that the Legislature wrote and voters enacted."

Any retroactive funding "obviously will not be used to compensate teachers" for past years' work, but districts have argued that the money could be used for such things as books, computers and building improvements, Cooper said.

The judge said further hearings are warranted because the state and the school districts are at odds over whether Arizona can afford to make back payments, which the schools have suggested be paid over five years.

A September ruling by the Arizona Supreme Court said voters required annual inflation adjustments to school funding when they passed Proposition 301 in 2000. That ruling sent the case back to Cooper for further proceedings.

The 2000 ballot measure known as Proposition 301 raised the state sales tax by 0.6 percent and required the Legislature to adjust school funding by about 2 percent per year to allow for inflation. The law said it would apply to base funding, transportation costs and other special funds.

The Legislature complied until 2010, when it funded only an increase in transportation and not basic school funding, citing a budget deficit. Lawmakers pointed to the use of the word "or" in the law to show they could decide against funding every part of the education budget.

The Supreme Court upheld the lower court's finding that materials given to voters and the legislative history of the law showed the Legislature must fund all parts.

The justices sent the case back to Cooper to decide how much money the state owes schools.

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