Arizona judge hears $2.9 billion back funding case

PHOENIX - A Maricopa County Superior Court judge on Friday said she needed time to analyze arguments for and against requiring the state to pay about $1.3 billion over the coming five years to make up for what the Legislature failed to provide for K-12 education since the 2009 budget crunch, plus an additional $1.6 billion in new school funding over the same period.

Lawyers for the Legislature are fighting the request. They say a September ruling by the Arizona Supreme Court doesn't require repayment of money that schools should have received in fiscal years 2010 through 2013. They also say courts can't order the state treasurer to make payments not authorized by the Legislature and governor.

"It's one of those cases where the courts do have limitations on their power," attorney Bill Richards said. "The ultimate remedy is at the ballot box. It's in the political process."

Lawyers for both sides argued for two hours before Judge Katherine Cooper, who said she would review the case and rule later.

Attorneys on behalf of Cave Creek Unified School District said the judge does, in fact, have the ability to impose that extra payment.

"We're here today because the Arizona Legislature ignored the advice of the attorney general and violated the law not once, but several years in a row," lawyer Don Peters said. "And a large number of Arizona students were injured by that and continue to be injured by that."

The Supreme Court decision said Arizona voters required annual inflation adjustments to school funding when they passed Proposition 301 in 2000. The proposition raised the state sales tax by 0.6 percent to fund schools.

The law said it would apply to base funding, transportation costs and other special funds.

The Legislature stopped adding to the base funding during the Great Recession and resumed the increases last year. But they started at the level that had been in place before the Legislature froze the increases.

Attorneys for school districts, a public interest advocacy group and the Arizona School Boards Association want that funding level increased going forward to what it would have been if the Legislature properly funded the inflation figures. State analysts say that will cost $317 million in the coming year alone and $1.6 billion over five years.

They also want nearly $1.3 million in back payments to be paid out over the five years beginning in fiscal year 2015, which works out to nearly $253 million a year.

Cooper questioned the attorneys sparsely, but said she thought the Supreme Court was very clear in its ruling that the state had not funded schools in the way that what was required by voters.

Lawyers for the state want no retroactive payments and no resetting of the basic school aid formula.

A declaration from Gov. Jan Brewer's budget director, John Arnold, said that would blow a hole in the state's budget and force cuts to other programs, although attorneys from the other side dispute that. General fund spending for the 2015 budget year that begins July 1 is set at $9.23 billion

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