Arizona governor signs $3.5B school funding deal

AP News
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Posted: Oct 30, 2015 6:14 PM
Arizona governor signs $3.5B school funding deal

PHOENIX (AP) — Arizona Gov. Doug Ducey signed a package of bills Friday that will pump $3.5 billion into K-12 education over the next decade to settle a long-running lawsuit stemming from the state's decision to raid school spending during the Great Recession.

Calling it a victory for Arizona schoolchildren, the Republican governor signed the legislation after it won approval earlier in the day during a special legislative session that featured several emotionally charged exchanges over how to properly pay for public schools.

Arizona is one of the most striking examples around the country of states still dealing with the fallout of their decisions to slash education spending when the recession ravaged budgets during the last decade.

A voter-approved referendum in Arizona has long required lawmakers to provide annual inflation-based increases to K-12 education, but the state Legislature quit making the payments when the recession hit and decimated the housing and construction industries that had been the lynchpin of the state economy.

Schools sued and a five-year legal case wound its way through the courts. Schools say they are satisfied with the agreement in which they receive about 70 percent of the cash they would have gotten if they had ultimately prevailed in the state Supreme Court.

The settlement cash comes from $1.4 billion in general fund money and $2 billion from a state land trust.

Voters will have final approval in a May 17 special election.

"With this permanent infusion of dollars into our schools that schools can spend as they see fit on their needs, educators will finally have the resources they have been asking for, and our students will have greater opportunities to succeed," Ducey said in a statement released after the Senate vote.

Democratic efforts to amend the bills in the Senate and House, including removing language that will cap future school spending and changing how the plan was funded, were rejected by majority Republicans.

Ducey's first-year budget left K-12 funding flat, and he and fellow Republicans faced vocal pressure in recent months from parents and voters around the state who are becoming increasingly frustrated over education spending.

A 2014 study by the Center for Budget and Policy Priorities found that Arizona per-student spending fell more than 47 other states since 2008 and funding remains 17 percent below pre-recession levels.

Other states are dealing with similar situations.

In Washington, the state's highest court ruled in 2012 that state funding for education was not adequate, and lawmakers there have been scrambling to come up with a solution ever since.

In August justices began fining the Washington state Legislature $100,000 a day. They said even though lawmakers had increased K-12 spending, they still weren't setting aside enough money to educate the state's one million school children — something they are required to do under Washington's state Constitution.

Lawmakers have pledged to address the issue when the Legislature convenes in January.

In Arizona, Ducey called lawmakers into the special session on Wednesday.

The deal will increase withdrawals from the state's $5 billion permanent land trust from 2.5 percent a year to nearly 7 percent. Democrats warned that puts the fund principal at risk.

The land trust component that was proposed by Ducey in June as a separate way to get new money to schools became a key funding source for the settlement, providing 60 percent of the cash. The remaining $1.4 billion comes from the state general fund.

Reliance on the trust drew opposition from the current and former state treasurer. Emotions ran high when the former treasurer told lawmakers that some members had been threatened to vote for the proposal.

That prompted an angry response from Republican Senate President Andy Biggs.