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In Ariz., Time Again To Retool School Finance

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It's back to the drawing board for Arizona lawmakers, after the state supreme court's rejection of their plan to equalize funding for school construction.

The state's highest court on Oct. 24 upheld a lower-court ruling that found that the Assistance to Build Classrooms, or ABC, school construction plan failed to resolve funding disparities in the Arizona school finance system.

The legislature passed the plan last spring in response to a 1994 supreme court ruling ordering the state to erase inequities caused by the current property-tax-reliant system.

The new formula would have provided $32.5 million in supplemental funding each year to poor districts for building and maintaining schools, and would have capped spending in the state's wealthiest districts. ("Ariz. Governor Signs Finance Bill; Legal Challenge Likely," March 12, 1997.)

Judge Rebecca Albrecht

The high court's one-paragraph ruling came down just one day after the justices heard oral arguments in the case. A full opinion explaining the decision is forthcoming.

With the decision, the Republican-controlled legislature is again under the gun to iron out a new finance plan by the June 30, 1998, deadline set by a superior court judge last November.

If lawmakers fail to comply with that deadline, the judge in that case, Rebecca Albrecht, has threatened to cut off state aid to education.

Critics Weigh In

Detractors of the ABC plan had maintained all along that it failed to address the fundamental inequities in the school finance formula, which relies on what is known as a secondary property tax to pay for construction projects.

Revenues generated by the tax vary widely according to the property values of homes and businesses in a given district.

"I'm really happy with the court's decision," Lisa Graham Keegan, the state schools superintendent and a longtime critic of the finance system, said in an interview last week.

Lisa Graham Keegan

Ms. Keegan, a Republican, is asking lawmakers in the upcoming legislative session to reconsider her proposal to abolish the secondary property tax and district bond referendums and replace them with a statewide half-cent sales tax. House lawmakers passed the plan last session, 40-19, but it died in the Senate.

Ms. Keegan and others said they were optimistic that the new leadership in the state would bring closure to the issue by the court-imposed summer deadline. Jane Dee Hull--the former secretary of state, state lawmaker, and teacher who replaced Fife Symington as governor earlier this fall--is considered more amenable than her predecessor to a thorough reform of the finance system.

Another Plan

"This is the time to do it," Sen. Chris Cummiskey, a Democrat, said.

He said he opposes replacing property taxes with a sales tax because sales-tax revenues are too vulnerable to economic highs and lows.

Instead, he and other lawmakers have suggested using the ABC plan, but tripling the supplemental dollars to poor districts it provides.

He said that Democratic lawmakers are in the process of hammering out a proposal based on that model.

In a statement, Gov. Hull, a Republican, called on lawmakers for a "renewed effort toward a resolution of this matter."

"It is my sincere hope that we can all agree to work together to resolve the 'bricks and mortar' question so that we can all turn our attention to what is most important, the quality of the education our children receive," she said.

State lawmakers have tried for three years to satisfy the 1994 court order.

That ruling, based on a lawsuit brought in 1991 by a coalition of poor districts, gave the legislators "reasonable time" to solve the problem, but earlier attempts by them--led by former Gov. Symington--to ease Arizona's school finance inequities have not passed constitutional muster.

Timothy M. Hogan, the executive director of the Phoenix-based Arizona Center for Law in the Public Interest, which represented the cash-strapped districts in the 1991 lawsuit, said the high court's decision "proves we've been right all along."

"There's great cause for optimism," he said last week. "People are tired of being misled by the [state] leadership."

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