Public schools seek deal to drop $1.2 billion suit against state - East Valley Tribune: Politics

Public schools seek deal to drop $1.2 billion suit against state

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Posted: Friday, March 14, 2014 5:15 pm

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 said it's time the state stops wasting money on legal fees, not only its own but also those the court orders the loser to pay to the winner.

Huppenthal also said making a deal would go a long way to addressing a report by the state Auditor General's Office that the amount of state funds reaching the classroom is at a 13-year low.

But Peters said his request to settle has been met with silence from the Attorney General's Office which represents the state, and 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.

But 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 the state should have paid schools while the lawsuit was pending. He 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. But last year the Arizona Supreme Court ruled they violated the Voter Protection Act, a constitutional provision prohibiting legislative tinkering with anything approved at the ballot.

That ruling, affirming an appellate court decision, cemented 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 all the aid that was not provided during the court fight.

Huppenthal, in an interview with Capitol Media Services about increasing classroom funding, said that extra $162 million will go a long way to catching up. But Huppenthal said the schools could get even more – and soon – if the state resolves what's rest 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.”

While Kavanagh said he agrees, the sticking point is how much.

Kavanagh said he is legally precluded from discussing negotiations to end the lawsuit. But he 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 was the minimum increase required each year, and 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 in 2000.

“What Proposition 301 requires is the (annual) adjustment of the base level,” he said, 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,” Peters said.

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

Huppenthal won't say what he thinks that settlement should be, but he said ending the litigation soon would have another benefit.

“To allow the lawyers to burn money for another five years is not appropriate,” he said. The state is covering not only the cost of its own lawyers but also has been ordered to pay the legal fees of Peters and co-counsel Tim Hogan.

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