PHOENIX — The state must come up with an extra $316 million immediately — and potentially $2.9 billion — to make up for aid to schools it illegally withheld over the past five years, a judge has ruled.
In an order released Friday, Maricopa County Superior Court Judge Katherine Cooper said a 2000 voter-approved measure requires the state to increase aid to public schools each year to compensate for inflation. That did not happen for several years.
The ruling came despite efforts by Bill Richards, the attorney for the state, to dissuade Cooper from forcing the state to cough up extra money. He argued that in some years before the budget cuts of 2009, schools actually got a bigger increase in state aid than was legally necessary. He said that means schools are owed nothing now — or certainly a lot less.
Cooper called such arguments “disingenuous” and soundly rejected the state’s claim that it cannot afford the increased aid.
“Cost does not defeat jurisdiction,” she wrote. “As a practical matter, if it did, the courts could never order anyone to do anything that costs money.”
“This is a real fiscal crisis,” said Rep. John Kavanagh, R-Fountain Hills, who chairs the House Appropriations Committee. He said the ruling means at least $190 million in immediate cuts to other parts of the state budget — and many times that if retroactive payments are ordered.
Gov. Jan Brewer also blasted the ruling.
“Left to stand, this judicially imposed spending will have a disastrous impact on our state’s public safety and vulnerable populations since funding for the court mandate must come at the expenses of these vitally important programs,” the governor said in a prepared statement.
But Andrew Morrill, president of the Arizona Education Association, said the ruling “ensures that future generations of Arizona’s children will be guaranteed the education funding voters approved when they passed Proposition 301 in 2000.” And Tim Ogle, executive director of the Arizona School Boards Association, said the order will “provide necessary relief to schools that have experienced some of the most extreme budget cuts in the nation over the past five years.”
How that will happen, though, remains murky.
“Courts spend money in a vacuum, while elected executive and legislative officials must balance spending within the confines of budget realities,” Brewer said.
Cooper, however, said she is not spelling out how the funds should be obtained, whether through higher taxes or cutting other state programs.
“This court cannot (and will not) tell the Legislature or treasurer how to fund the adjustments, past or future,” she wrote.
“The court assumes that the Legislature will do what the law requires to enable the state to comply with the Supreme Court decision,” Cooper wrote.
Cooper noted it was the Legislature itself, with the blessing of then-Gov. Jane Hull, that crafted the issue and put it to voters in 2000.
“It is not for this court to say how a judgment is satisfied, nor question the practicality or wisdom of the law that the Legislature wrote and voters enacted,” Cooper said.
“Obviously, we will be making the payments,” Kavanagh said. And it’s certainly going to have a negative impact on all other areas of government.”
There is another option: higher taxes. But Kavanagh noted that requires approval by two-thirds of both the House and Senate.
“I don’t see that happening,” he said. “I see some real belt-tightening if, in the end, this ruling stays as is.”
Cooper’s ruling, unless overturned, means an immediate increase of $316 million in state aid to schools over what it would have been had the governor and lawmakers not ignored the law in the first place, Morrill said. That amounts to $279 more per pupil, totaling about $3,652 each.
Cooper said she’s willing to hear the state’s arguments that it should not have to come up with the $1.3 billion districts were denied in prior years. All totaled, back funds plus the court-ordered reset of state aid would total $2.9 billion over five years.
The 2000 ballot measure boosted the state’s 5 percent sales tax by six-tenths of a cent through June 30, 2021. It also requires the Legislature to forever increase funding for schools by 2 percent or the change in the gross domestic price deflator, whichever is less.
But faced with a budget shortfall, lawmakers and the governor stopped providing the inflation funding beginning with the 2009-2010 school year. They only partially funded it for last school year before finally getting back on track for the coming school year, albeit at a lower starting point.
School districts sued. Last year the Arizona Supreme Court ruled the state had violated the 2000 law, sending the case to Cooper to determine how much the schools are owed.
Cooper said there may be a reason to forgive the shortages from past years.
“It is the court’s understanding that, had the adjustments been made timely, the funds would have paid teacher salaries and other recurring costs for a given fiscal year,” Cooper wrote. “Obviously, funds released today will not be used to compensate teachers between 2009 and 2013.”
Senate President Andy Biggs said he will not comment on the ruling “until all issues are resolved and we have clarity on what lies ahead.”