High court rules for farmers in budget dispute - East Valley Tribune: East Valley Local News

High court rules for farmers in budget dispute

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Posted: Sunday, July 12, 2009 2:49 pm | Updated: 2:38 am, Sat Oct 8, 2011.

Former Gov. Janet Napolitano and state lawmakers acted illegally in seizing the funds belonging to farm groups to balance the budget, a Maricopa County Superior Court judge has ruled.

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Judge Craig Blakley II agreed with the groups that the $161,000 at issue came from fees and donations assessed against farmers, not from general tax revenues. More to the point, the judge said those fees were specifically set aside for "furthering agricultural interests'' and not to deal with problems elsewhere in the state's financial system.

The ruling is a major victory for the Arizona Farm Bureau Federation which filed suit last September over the fund sweep.

It also is a slap at Napolitano who not only pushed for taking the funds but lashed out at the farm groups, suggesting they were being selfish.

"They have kids who go to school and they want to drive on safe roads and they want to make sure that prison inmates are guarded," Napolitano said at the time. She argued the state's tight financial situation justified taking the money.

But Blakley disagreed.

The lawsuit stems from the fact that the original $9.9 billion budget adopted last year included more than $276 million taken from various special funds to make up for the fact that tax collections were declining.

Some of those funds were levies raised on particular professions to run regulatory agencies like state boards of nursing, optometry and cosmetology. Other funds "swept" into the budget had been designed for special programs like helping those cheated by registered contractors, assisting crime victims and aiding those in need of housing.

The funds at issue here, however, were a special category. They were raised by fees that lettuce, grain and citrus growers imposed on themselves for research and marketing.

Attorneys for the farm groups argued the state was simply holding that money "in trust" for the farmers and that it was not state money - and not subject to being raided. Blakley agreed.

But the judge, while ruling the sweeps were illegal, suggested there actually might be a way for lawmakers to get their hands on the cash.

Blakley said his ruling was based on the wording of the statutes that created the funds and earmarked how they can be spent.

"The Legislature cannot modify the purposes without legislation allowing such modification,'' the judge said. That would leave the door open to future sweeps if lawmakers also alter the underlying laws that created the funds.

Sigg conceded the point. But he said Sunday if lawmakers decide to alter the laws to allow the cash to be used for other purposes, then the producers will simply stop making donations.

An aide to current Gov. Jan Brewer had no comment Sunday on the ruling.

This is the second court ruling against tactics used by Napolitano and lawmakers to balance last year's budget.

The Arizona Supreme Court ruled in February that it was illegal to demand cities and counties give up more than $29.7 million.

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