The future financing of schools again debated in court

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PHOENIX – State attorneys want a judge to dismiss a 5-year-old lawsuit accusing lawmakers of failing to meet their court-ordered, constitutional obligation to adequately fund new schools and fix existing ones .

Whether lawmakers will again be ordered to fix the system as they have been repeatedly since 1994 — and potentially have to find billions of new dollars — hangs in the balance.

In a hearing on Wednesday, state attorneys told Maricopa County Superior Court Judge Daniel Martin that there had been ‘drastic system changes’ in funding since the lawsuit filed. in 2017 by school districts and education advocates first challenged the system of who gets the money. They pointed to cash injections and policy changes that govern when a district is eligible for state dollars for a new school.

Brett Johnson, the state’s lead attorney, told Martin he should leave the issue of school funding to elected lawmakers. He said lawmakers had already made changes and needed “flexibility” to make future “policy adjustments”.

“Plaintiffs ask this court for a policy opinion on whether the Legislature could design a ‘better’ system to fund capital expenditures for K-12 public schools,” Johnson wrote in oral argument. And he said challengers, including not only school districts but also the Arizona School Boards Association and the Arizona Education Association, are asking Martin to intercede because “they failed to reach all their political objectives through the traditional legislative process”.

But the schools’ lawyers say the problems are real — and that the Arizona Constitution requires lawmakers to address them.

“The undisputed evidence shows that the state is not providing sufficient capital funding to ensure that no district falls below the state’s installation standards,” Judge Danny Adelman, who represents the challengers, told Judge. So he wants Martin to immediately order lawmakers to craft a constitutional system — something the Arizona Supreme Court first ordered in 1994.

Under the system in place at the time, school districts collected and borrowed money for new construction and repairs solely through local property taxes.

That year, judges found that the school’s method of funding violated the state’s constitutional requirements for a “general and uniform” school system. They said it created illegal disparities between rich neighborhoods and poor neighborhoods.

“Some districts have schools that are unsafe, unsanitary and in breach of building, fire and safety codes,” Judge Frederick Martone wrote for the High Court. “There are schools without libraries, science labs, computer labs, art programs, gymnasiums and auditoriums.”

At the same time, Martone said, “there are schools with indoor swimming pools, a domed stadium, science labs, television studios, well-stocked libraries, satellite dishes and expensive computer systems.”

Several stopgap solutions proposed by the Republican-controlled legislature were rejected by the court.

Legislators eventually created the School Facilities Board which was supposed to serve the building needs of each district.

The only thing is that lawmakers never found a new source of revenue to fund the potential $300 million annual prize, instead absorbing the cost into the general fund.

This, however, only worked when the economy was good and incomes were rising. When the Great Recession hit and state tax collections plummeted, one of the casualties was council money.

The funding formula has been replaced by a grant process. But the challengers, filing a lawsuit in 2017, said it meant districts that needed schools or major repairs but couldn’t wait for a grant had to look to their local constituents again for help. bond approval, the very system the Supreme Court had previously ruled illegal.

There have been adjustments since, including one instituted by Gov. Doug Ducey who says districts no longer need to wait until schools are actually overcrowded to get funds to start building new ones.

But Adelman said the state still isn’t providing all the funds needed to build new schools and provide a steady stream of dollars for maintenance and major repairs, like saving for a new roof.

And that, say the challengers, means schools “have to wait until their systems fail” before getting financial aid – or relying on local tax money, a system that is no better than what the judges quashed 28 years ago.

Attorney Colin Ahler, who is also representing the state, said that is not what the filing shows. Either way, he said, the law only requires schools to get enough to fund “minimum guidelines,” not to meet higher standards.

But Adelman said the state isn’t even doing that.

“Neighborhoods without are being left behind (with) failing HVAC, failing fixtures, water seepage, dilapidated foundations, sinkholes for years, laptops at Quartzsite that have been virtually doomed for years, l ‘undrinkable water,’ he said.

“Only districts with sufficient local wealth (and supportive voters) can consistently maintain their facilities without falling below standard,” Adelman wrote in a separate filing. “And neighborhoods without local wealth are being left behind.”

None of this would be a problem if the state paid for the cost of the new schools. Adelman told Martin that the Supreme Court in its 1994 decision “made it clear that funding public education in Arizona is the responsibility of the state, not the school districts.”

“The state cannot attempt to pledge its constitutional obligations on the districts,” he wrote.

And Adelman said there’s another reason the state can’t shift the burden onto local taxpayers: Not all districts are created equal.

Some have large amounts of commercial and industrial properties which contribute more to the tax base than residential properties. But it’s those residential properties that have the students.
Joshua Bendor, another attorney for the challengers, cited the Peoria Unified School District, which they say has relatively low real estate wealth compared to the number of students it educates.

“To raise a given amount per student through bonds, Peoria must impose a tax rate almost five times the rate the Scottsdale Unified School District would have to impose to raise the same amount of money per student, and nearly 15 times the rate the Sedona-Oak Creek Unified School District is expected to charge,” Bendor said.

“The state bears the burden of explaining why it is reasonable for some taxpayers to pay tax rates 15 times higher than their fellow citizens in other school districts to meet basic school capital needs.”

This disparity, he said, is precisely the issue the Supreme Court addressed in 1994.

And Bendor said there’s nothing on the record to show there’s a significant relationship between a district’s real estate wealth and its capital needs.

But William Richards, who represents Republican legislative leaders, told Martin what was missing from the schools’ arguments was any evidence of harm from the funding formula.

“Plaintiffs have made no demonstration that a single district in fact failed to provide the educational services and curriculum delivery required by the state’s minimum academic standards to a single actual student,” he said. he declares. Absent that evidence, Richards said, the schools have no basis for their claim that the state is not meeting its constitutional funding requirements.

And anything beyond that, he said, is irrelevant.

“The Legislature is not required to fund every capital asset each district chooses to acquire,” Richards said. “Nor is it necessary to ensure that every district has exactly the same facilities and capital resources.”

The judge did not say when he will rule.

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