Schools say they will drop $1.2B settlement claim if lawmakers honor 2000 law; Legislature balks

2014-03-17T00:00:00Z 2014-03-18T15:12:06Z Schools say they will drop $1.2B settlement claim if lawmakers honor 2000 law; Legislature balksBy Howard Fischer Capitol Media Services Arizona Daily Star

PHOENIX — Arizona public schools have offered to give up their claim to more than $1.2 billion in lost aid if the state will simply agree to adjust the current formula to recognize the fact that lawmakers broke state law.

But state lawmakers are balking.

Don Peters, attorney for the schools, told Capitol Media Services his clients have agreed to settle the 4-year-old lawsuit if the Legislature simply agrees to set the baseline for state aid at what it would have been had a 2000 voter-approved law been followed in the first place. He puts that currently at $3,560 per student, a move that would cost about $240 million.

John Huppenthal, the state superintendent of public instruction, said he wants the case settled. He also said it’s time the state stop wasting money on legal fees — not only its own fees, but also those the court orders the loser to pay to the winner.

“To allow the lawyers to burn money for another five years is not appropriate,” he said, referring to the state’s lawyers along with Peters and co-counsel Tim Hogan, whose fees the state has been ordered to pay.

Making a deal would go a long way toward addressing a state Auditor General’s Office report that the amount of state funds reaching the classroom is at a 13-year low, Huppenthal said.

Huppenthal won’t say what he thinks the settlement should be.

Peters said his request to settle has been met with silence from the state Attorney General’s Office. Attorney General Tom Horne, in turn, said he takes his orders from Republican legislative leadership.

Rep. John Kavanagh, R-Fountain Hills, who chairs the House Appropriations Committee, said he is willing to settle. He said that not only gets more needed dollars into classrooms, but also provides some certainty for future years.

Kavanagh said what Peters wants is not a good deal, even if it gets the state off the hook for possibly $1.2 billion in aid it should have paid schools while the lawsuit was pending.

He also said the state should get credit for all the years, going back to 2000, when lawmakers provided more additional cash to schools than was legally required.

Peters, however, said that is legally irrelevant.

If there is no deal, the case will go to trial, and given Peters’ prior success at the Supreme Court, that means the price tag for taxpayers could be much higher than what he offered in settlement.

Time may be running out for a deal: Maricopa County Superior Court Judge Katherine Cooper is set to hear arguments on May 9.

The fight surrounds the 2010 decision by lawmakers to ignore Proposition 301, a 2000 voter-mandated requirement to make annual inflationary increases in state aid to public schools.

Last year, the Arizona Supreme Court ruled lawmakers violated the Voter Protection Act, a constitutional provision prohibiting legislative tinkering with anything approved at the ballot.

That ruling, affirming an appellate-court decision, locked in an additional $82 million in aid for the current school year, and put the schools in line for another $80 million for next year.

The high-court ruling left unsettled the question of the aid that was not provided during the court fight.

Huppenthal said that extra $162 million will go a long way to catching up, and added the schools could soon get even more if the state resolves what’s left of the lawsuit now instead of having the case drag out another four years.

“We are encouraging all entities to get to the negotiating table and settle the Prop 301 lawsuit,” he said. “And that is potentially a very large level of funding that would go a long way.”

Kavanagh agrees, but said the sticking point is just how much funding. He also said he is legally precluded from discussing negotiations to end the lawsuit, but said the state should pay a lot less than what Peters wants.

He said there were years in the early part of the last decade where state aid actually increased more than the minimum required.

“We should get credit for that,” Kavanagh said.

He wants to start with the per-student funding in 2000, calculate what the minimum increase required each year was, then set the new baseline based on that.

“If there were years we gave over additional money for inflation, then that should be part of the overall calculation, too,” he said.

But Peters said Kavanagh and Republican legislative leadership are misreading what voters mandated.

“What Proposition 301 requires is the (annual) adjustment of the base level,” he said, referring to the figure of per-student aid which, when multiplied by the number of students, becomes the total increase in the state budget. “It’s not as if you get to sit on that dollar figure because you gave more money last year.

“The law very specifically says, ‘Change that dollar figure every year.’ It’s great that they were generous more years than others, but they’ve still got to change that dollar figure.”

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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