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Impasse declared in public school inflation funding lawsuit


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  • Lisa Irish/Arizona Education News Service

Students Working Together

After more than six months of settlement discussions, public education advocates declared an impasse today in settlement discussions in the ongoing inflation funding lawsuit. The announcement opens yet another chapter in the five-year court battle over $336 million in state funding the Arizona Supreme Court last year ruled is owed to Arizona public schools.

“We have determined it is no longer productive to continue along that path,” said Dr. Tim Ogle, executive director of Arizona School Boards Association. “With regret, we return to active litigation to try to bring school districts the resolution they deserve. This is not the end of our conversations with policymakers, however. Be assured, if it’s good for kids, we will be at the table participating in discussions.”

Impasse declared in public school inflation funding lawsuit ImpasseHPIdea1A coalition that includes five school districts, Arizona School Boards Association, Arizona Education Association, and Arizona Association of School Business Officials sued the state in 2010 to force the Legislature to comply with the inflation funding mandate established when voters approved Proposition 301 in 2000.

The Arizona Supreme Court in September 2013 ruled that the state was violating the law by not providing inflation mandated by the voter approved Proposition 301.

On remand, in July 2014, Maricopa County Superior Court Judge Katherine Cooper ruled the state must immediately adjust funding for students by $336 million – an amount equal to what funding would have been had the state provided inflation during years 2010-2014. Judge Cooper has yet to rule on the cumulative funding not provided during that same period, which may be as much as $1.3 billion. In January 2015, Judge Cooper urged the parties to engage in mediation to reach a settlement.

The lifting by the  Court of Appeals  of its stay on legal judgments in Cave Creek Unified School District et al v. DeWit et al. during mediation means Judge Cooper, who was preparing to rule on whether the state also owed schools up to $1.3 billion in back payments, can now issue her ruling, according to the Associated Press.

Judge Cooper has yet to rule on the cumulative funding not provided during that same period, which may be as much as $1.3 billion. In January 2015, Judge Cooper urged the parties to engage in mediation to reach a settlement.

Impasse declared in public school inflation funding lawsuit Updated-GESDStatementGraphic

“It’s time our leaders put Arizona and our children first,” said Andrew Morrill, president of the Arizona Education Association. “Students are returning to the classroom for a new school year while our state faces historic numbers of teachers leaving the profession due to a lack of resources.”

The plaintiffs have been consistent in their position: any settlement must include an adjustment to the base student funding commensurate with the reset amount that Judge Cooper has ordered.

In a statement released Friday, Aug. 28, Glendale Elementary School District said it “had hoped that policy makers would have seen fit to find a way to properly restore funding owed to our schools. In Glendale alone more than $26 million was cut from our budget since the great recession. During this same time the state implemented several new programs – including new learning standards and statewide testing system – that added to the burden of balancing our budgets while providing students with the education they deserve. In short, our children, teachers and staff have been asked to do more with less for far too long.”

“The Arizona Constitution obligates lawmakers to fully fund education and to do so in an equitable manner. It’s unfortunate that policy makers could not fund students to the levels they deserve while insuring a sustainable funding source. Our children, our state deserve better,” said Glendale Elementary School District.

Shortly after the impasse was announced, Arizona Legislature Senate President Andy Biggs and Speaker of the House David Gowan released a proposal to put more money into classrooms statewide, but that proposal would not include an increase to base level student funding.

Biggs and Gowan’s proposal would put $5 billion in new money into K-12 education over the next 10 years without raising taxes, by continuing a supplement to annual basic state aid which began in the last budget process, a new increase to annual basic state aid, a partial shift of money from the state’s First Things First program, and a plan to use increased earnings from the state trust land, according to their press release.

Late on Tuesday, Governor Doug Ducey released the following statement regarding education funding in Arizona.

“In January, I called on both sides to come together and settle this lawsuit so we could stop paying lawyers and start paying teachers. I am disappointed that has failed,” Ducey said. “Now, I look forward to working with the Legislature to do everything we can to put more money in our classrooms, and to make sure our students and teachers have the resources they need.”

At a news conference held in September 2014, representatives of the education groups involved in the lawsuit and Don Peters, lead counsel for the plaintiffs, said if the state corrects current inflation base level funding to the level it would be if increases had been made each year as required by law – the reset issue, –  then they were prepared to give up their claim to money not paid to public schools in past years – the backpay issue.

With the reset, the state owed public schools more than $300 million for the 2014-15 school year. Back pay exceeds $1 billion.

Impasse declared in public school inflation funding lawsuit DonPetersHP

Attorney Don Peters, who is lead counsel for the plaintiffs, speaks during a press conference about the effects of the inflation funding lawsuit in September 2014. Photo by Mike Barcia/AZEdNews

All parties involved in the mediation are prohibited by a court order from disclosing details of the recent settlement discussions, but they are permitted to share their views on how an acceptable settlement might be reached.

A settlement that includes either inflation adjustments or the equivalent in additional funding would be acceptable, and the claim for back pay would be dropped if the settlement is achieved promptly, according to plaintiffs.

“We will continue to actively pursue a fair resolution,” Ogle said.

Another option would be $400 million per year in current dollars in additional funding for public schools through other revenue sources that would not negatively impact other funding, according to plaintiffs.

For example, about $100 million of additional funding could be sustainably supplied each year from trust land income, and the remaining funds could be supplied in a number of ways including a 0.4 cent sales tax increase.

Ogle said the settlement of the lawsuit is unrelated to a call by Arizona Governor Ducey for a ballot measure that would use trust land revenues to provide additional funding for public schools.

Ogle said, “We have not endorsed this proposal, as the details have not yet been developed. We will evaluate the terms when they are created.”

He added that it is encouraging that the governor is focused on more funding for education.

“Obtaining adequate funding for our public schools shouldn’t require protracted litigation and court orders,” Ogle said. “We sincerely hope that despite the failure to achieve a settlement during the recent mediation process both side can still find an acceptable solution that puts an end to the litigation and halts the erosion in funding for our schools.”