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High Court's Opinion Directs Arizona Back to the Drawing Board on Funding

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When the Arizona Supreme Court in 1994 struck down the state's method of paying for its schools, it gave lawmakers "reasonable time" to fix inequities caused by the property-tax-reliant school facilities system.

That reasonable time has apparently run out--and just as lawmakers reconvene this week to start a new session.

Late last month, the court issued an opinion detailing the ways in which the legislature could fix the capital-finance problem. The opinion marked the latest legal turn in a case that originated in 1991 when a coalition of poor districts challenged the finance system in court.

"A reasonable time has passed, and it is now time to act," the court's 4-1 majority opinion on Dec. 23 concluded. "Choose a system that ensures adequate capital facilities statewide."

The high court's full opinion follows a one-paragraph ruling the justices issued in October upholding a lower court's determination that legislative fixes to date have failed to pass state constitutional muster. The Assistance to Build Classrooms, or ABC, plan that the legislature passed last spring would have capped spending in the richest districts and sent $32.5 million in supplemental aid each year to poor districts for building and maintaining schools. ("In Ariz., Time Again To Retool School Finance," Nov. 5, 1997.)

Legislative Priority

Republican Gov. Jane Dee Hull hopes to build consensus around a new finance plan by the end of the month, according to her spokeswoman, Francie Noyes.

"There's a real sense that this is it. The time has come," Ms. Noyes said. "The court has made it clear this is a state responsibility to fix this problem. And resolving it will be the top priority of this legislative session."

Arizona legislators also face a June 30 deadline set by a superior court judge in 1996 and upheld by the supreme court. If lawmakers fail to comply with the deadline, the judge has threatened to cut off state aid to schools.

Among the possible scenarios the supreme court laid out for lawmakers:

  • Maintaining reliance on local property taxes, but equalizing spending among districts;
  • Paying for facilities primarily through a statewide tax, such as a sales or income tax; or
  • Consolidating districts so that each has a "roughly comparable" property tax base.

The opinion also strongly implies that the Republican-controlled legislature must set standards so that all facilities meet some basic measure of adequacy. Defining those standards, many say, will be the next challenge.

"Once you establish standards, you have to fund them. That's been the reticence in the legislature," said Timothy M. Hogan, the executive director of the Phoenix-based Arizona Center for Law in the Public Interest. His group represented the districts in the 1991 lawsuit. "We've advocated standards from the very beginning."

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