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7/13/2014 6:00:00 AM
Judge: Arizona Legislature shortchanged schools
Millions - perhaps billions - could be allocated to education

PHOENIX (AP) - A judge ruled Friday that Arizona public schools are entitled to at least $317 million in additional state funding for inflation this year and set the stage for further proceedings that could bump the total to $2.9 billion over the next five years.

"I think this is a move in the right direction for Arizona schools," said Roger Jacks, superintendent of Kingman Unified School District. "We definitely need more funds. We'll have to wait to see if there are any appeals, how the money is allocated by the Legislature and if there are any offsets, but it sure would be absolutely wonderful if some of that funding came through for us."

Maricopa County Superior Court Judge Karen Cooper's ruling is a partial win for school officials who argued that the state violated a voter-approved law by failing to provide mandated inflation funding since the 2009 budget crunch.

Cooper ordered the state to reset funding levels for the current fiscal year, and she said she will hold hearings on whether to order retroactive funding requested by school districts for past fiscal years.

With coming years' per-student funding raised to include inflation funding and possible retroactive funding for past years' funding, the five-year cost could reach an estimated $2.9 billion. The judge said further hearings are warranted because the state and the school districts are at odds over whether Arizona can afford to make back payments, which the schools have suggested be paid over five years.

"This could mean an awful lot to us for all the obvious reasons," said Laurie Voss Barthlow, a KUSD board member. "We will definitely take it, although I have to be skeptical about it until I actually see any funding. We appreciate any extra money we see and will always put it to very good use."

Department of Education Superintendent John Huppenthal applauded the judge's ruling, noting that the state's public schools were hit especially hard by the recession and the money would help them recoup some of their losses.

"When these funds become available, I strongly encourage school governing boards to take a thoughtful and deliberative look at how to best allocate the funding to ensure the investment made by Arizona taxpayers directly impacts student academic success and provides more Arizona children a world-class education," said Huppenthal.

The current state budget has $9.2 billion of spending, and the state's lawyers argued that retroactive payment of inflation funding could blow a hole in state finances.

"Granted, the state faces many financial needs and challenges," Cooper said in her order. "However, it is not for this court to say how a judgment is satisfied, not to question the practicality or wisdom of the law that the Legislature wrote and voters enacted."

Any retroactive funding "obviously will not be used to compensate teachers" for past years' work, but districts have argued that the money could be used for such things as books, computers and building improvements, Cooper said.

KUSD's Jacks and Voss Barthlow said they are disappointed to hear teachers could not receive retroactive funding, because providing more money for them is a main priority. But they are hopeful some of it can be used to increase staff salaries in the future. After a lengthy discussion in April about the possibility of giving a 3 percent pay raise to staff, board members opted to stay within their comfort zone and approved a 1 percent hike worth $255,000 instead.

KUSD staff received annual stipends since about 2008, and got a tiered raise last year. Those with longevity received a 2.5 to 3 percent raise, while short-timers got a 1 percent increase. The lack of raises over the years has been blamed on the district's financial troubles that began in 2007, when enrollment began decreasing because of the area's economic turmoil. The situation worsened as the state suffered a financial crisis in 2009, leaving little money for education.

A September ruling by the Arizona Supreme Court said voters required annual inflation adjustments to school funding when they passed Proposition 301 in 2000. That ruling sent the case back to Cooper for further proceedings.

The 2000 ballot measure raised the state sales tax by 0.6 percent and required the Legislature to adjust school funding by about 2 percent per year to allow for inflation. The law said it would apply to base funding, transportation costs and other special funds.

The Legislature complied until 2010, when it funded only an increase in transportation and not basic school funding, citing a budget deficit. Lawmakers pointed to the use of the word "or" in the law to show they could decide against funding every part of the education budget.

The Supreme Court upheld the lower court's finding that materials given to voters and the legislative history of the law showed the Legislature must fund all parts.

The justices sent the case back to Cooper to decide how much money the state owes schools.

Miner reporter Kim Steele contributed to this story.

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