Published Online: March 12, 1997

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Ariz. Governor Signs Finance Bill; Legal Challenge Likely

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While most Arizona Republican leaders were claiming victory last week in solving a long-running school finance battle, they also acknowledged that the debate is far from over and that a legal showdown is likely.

Gov. Fife Symington last week signed a finance bill that he and other GOP leaders worked on for weeks in closed-door meetings. Lawmakers in the Republican-dominated state had put the bill on a fast track.

Attempts to move other finance-reform plans this session have stalled.

Earlier stabs at solutions to Arizona's finance inequities have been turned down by the courts as insufficient. Many observers predict this latest plan will face serious questions from the courts, too.

In response to a lawsuit filed by poor school districts, the Arizona Supreme Court ruled in 1994 that the finance system unconstitutionally created vast disparities in districts' ability to afford school construction, building maintenance, and equipment. ("Ariz. Construction Funds Come Up Short, Critics Say," May 22, 1996.)

Last year, lawmakers approved a $100 million grant-and-loan fund for school repair and construction and a 10-year plan to provide poor and fast-growing districts $30 million a year in state facilities aid. But in November, a Maricopa County Superior Court judge declared those plans insufficient.

The judge said officials must devise a new finance system by June 30, 1998, or the court would freeze state school funds. Mr. Symington asked the state supreme court to reverse the lower court's ruling, but in January the high court upheld it.

Schools Chief Opposed

The plan signed last week creates a formula that will funnel $32.5 million a year from existing sales-tax revenue to poor districts.

Though the plan says schools will be guaranteed $350 a year for every elementary student and $525 for every high school student, how much of that would be paid for by new state aid will vary depending on a school system's wealth.

Roughly 85 of Arizona's 226 districts will receive new aid under the plan.

"It is a permanent, fundamental, structural change to the current school finance system as required by the Roosevelt v. Bishop court decision, including an entitlement to ensure capital in low-wealth districts," Mr. Symington said of the bill that he signed on March 5.

But critics, including Lisa Graham Keegan, the Republican state schools chief, and many education groups disagreed.

"This plan belies a desire to dispense with this critical issue and get on with other things in the legislature," said Ms. Keegan, who has often butted heads with Mr. Symington over school finance. "This bill has nothing to do with per-pupil equity and will not address the disparities in tax rates around the state."

Poor school districts will still have to go heavily into debt before receiving state resources, critics argued, and would have to compete with growing districts for a pool of money that is too small.

Estimates put Arizona schools' "emergency" health and safety needs as high as $100 million.

Confrontation Coming?

While proponents of the plan said it will cap spending among high-wealth districts, others, such as Timothy M. Hogan, the executive director of the Arizona Center for Law in the Public Interest, said the cap included in the finance law would affect only a handful of the state's richest districts.

Mr. Hogan, who represented the strapped school districts that filed the original funding lawsuit, called the legislature's latest move little more than a stalling tactic.

Mr. Symington has frequently criticized the courts for interfering in state business. Some observers predicted last week that he will use the school finance debate to force a high-stakes showdown between the legislature and the courts.

"It's clear that we'll be back in court," Mr. Hogan said. "For the leadership this ceased to be about schools a long time ago. This is about politics."

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