A federal judge’s ruling said that the State of Arizona acted illegally by not getting approval from congress before Proposition 123 took money for public education from the state land trust investment fund.

But U.S. District Court Judge Neil Wake’s court order does not stop Prop. 123 funding to Arizona schools, because it received congressional approval after the fact, according to a Capitol Media Services article. However, the order does prevent Arizona from doing the same thing in 2025, when Prop. 123 expires, without getting congressional approval first. Read the entire ruling below.

Prop. 123, introduced by Gov. Doug Ducey, was approved by voters in 2016 and takes more than $2 billion from the state land trust investment fund over 10 years to settle the Cave Creek USD, et al. v. Ducey inflation funding lawsuit from the state failing to fully fund schools.

Congress set up the state land trust when Arizona became a state, and sales and leases of the land are supposed to help fund education and prisons, according to an Arizona Public Media article.

School districts and charter schools receive these Prop. 123 funds, which total about $200 per student, and many school districts have used the money to hire more teachers and pay them more. 

“Following today’s court decision on Proposition 123, I would like to reassure Arizona’s school communities that this ruling does not affect our schools’ current funding amounts,” said Kathy Hoffman, Arizona Superintendent of Public Instruction.

“Proposition 123 was approved by voters to pay schools what they were owed, and these critical dollars will continue to flow to Arizona schools until funding expires in 2025,” Supt. Hoffman said.

“The next step our state must take is finding a sustainable revenue source that will fully restore education funding to pre-recession levels,” Supt. Hoffman said.

The Governor’s Office stated today that “this decision does not affect the current distribution of Prop. 123 dollars going to our schools,” and that the decision will be appealed.

Arizona and its leaders came together in historic fashion to pass Prop 123. One out-of-control judge isn’t going to change that — and we will continue to defend more dollars going to our schools and the right of Arizonans to control our own destiny and make our own decisions. 6/6

— Patrick Ptak (@PatPtak) October 1, 2019

Judge Wake’s order was in response to a lawsuit filed by Michael Pierce, an Arizona resident who objects to Prop. 123 withdrawals from the land trust, according to an Arizona Republic article. Former Arizona Treasurer Jeff DeWitt publicly opposed Prop. 123 after it was announced, and he said then that it violated federal law.

In his ruling, Judge Wake wrote, “Arizona’s decline in public school funding parallels other policies. First is tax cutting in general, which has been endemic since the 1990s. School choice is promoted by charter schools, which receive state funding and at a per pupil rate higher than public school students receive. The public school’s slice of the pie has been shrinking, and so has the whole pie.” Read Judge Wake’s entire ruling below.

Judge Wake isn’t prone to issue incoherent or poorly reasoned judgements. Quite the contrary! I voted for the Prp123 gimmick out of the urgency to do something to bring much needed funds. Decades of indiscriminate tax cuts left us handcuffed. There were then&are now alternatives

— David Bradley (@Bradley4AZ) October 1, 2019

This lawsuit may take many years to conclude, the State of Arizona has already stated they intend to appeal this ruling to the Ninth Circuit Court of Appeals, and there is also the possibility of obtaining a retroactive amendment to the Enabling Act through Congress which would moot the lawsuit entirely, according to a statement from the Arizona School Boards Association.

Also, as part of the settlement of the inflation funding lawsuit, the state agreed that if a time came in which the provisions of Prop. 123 were found to be illegal, the state would continue to fund its obligations until there was judicial finality, which means until all appeals are exhausted, according to the statement from the Arizona School Boards Association.

View Judge Wake’s order courtesy of the AZMirror article.

Related articles:
Prop. 123 money used to hire more teachers & pay them more
As session winds down, speaker withdraws controversial amendment impacting Prop. 123 funds (+Video)
Mesnard amendment to SB1156 would violate the intent of Prop. 301 and Prop. 123
Arizona districts make tough choices on spending first Prop. 123 funds
Education leaders echo voters’ desire for funding beyond Prop. 123
Community comes together to support education at #Now It Starts rally
Prop. 123 passes, settles inflation funding lawsuit
Alternate realities: School budgets, teacher salaries hinge on Prop. 123
Impasse declared in public school inflation funding lawsuit
Ducey signs K-12 inflation funding agreement
Trust lands: Arizona’s biggest little-known K-12 funding source (+ Infographic)
Legislature urged to provide court-ordered funding
Arizona schools, legislators await court decision on inflation funding
Ducey and team promote plan to boost trust land funds for schools