Arizona Legislature asks appeals court to block school funding case payments during appeal

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PHOENIX — Lawyers for the Arizona Legislature are asking the state Court of Appeals to block a judge's order requiring hundreds of millions of dollars in extra school funding payments while they appeal.

The request filed late last week seeks a delay in the order that the Legislature immediately pay nearly $317 million to schools. Maricopa County Superior Court Judge Katherine Cooper issued the order in July in a long-running case tied to the Legislature's failure to give schools a yearly funding boost to make up for inflation.

Cooper also is considering whether to require about $1 billion in back payments for years the schools didn't get the payments.

The Legislature stopped the annual inflation adjustments during the Great Recession. The Arizona Supreme Court ruled last year they were constitutionally required, and Cooper's July order is implementing and interpreting that high court decision.

In its motion, the Legislature's lawyers argue for an automatic or discretionary stay from the order "requiring the state to immediately commence paying hundreds of millions of dollars in new state funding during the current fiscal year despite the fact that the state is already grappling with a large budget shortfall. " With a stay, "the legislative and executive branches will not be forced to make enormous budget cuts and other policy decisions impacting important state programs that would be unnecessary if the state prevails on appeal."

An attorney for the school districts that sued, Don Peters, said Thursday that allowing the state to delay paying the schools would cause "irreparable harm."

"We think the judgment is correct, and if it's correct then the Legislature should be complying right now, because schools and students are being deprived of the funding that the voters said they should have," Peters said.

The root of the dispute is a voter-approved 2000 law that raised the state sales tax by 0.6 percent and required the money be spent on annual inflation increases for schools. Lawmakers quit providing the annual boosts in 2009 as state revenues were decimated by the recession.

The Legislature began paying the increases again in the budget year that began July 1, 2013. But Cooper's July ruling ordered the Legislature to reset base level school funding to where it would have been if the inflation increases had been given in each year — a boost of $317 million this budget year and a larger amount in subsequent years.

The Legislature's budget analysts estimate that will cost the state $1.6 billion over the coming five years.

Cooper also is considering whether the state owes schools districts an estimated $1 billion in back payments over five years. That ruling could come at any time.

During an October hearing on the back payments, officials from three school districts testified that they put off facility improvements and could also use the money for new computers and textbooks and to give teachers who haven't seen raises in years one-time payments.

The school district lawyers only sought back payments for regular public schools, but charter schools are now urging Cooper to include them in any back payments. Kory Langhofer, the lawyer representing the Arizona Charter Schools Association, said that's only fair.

"If district schools are entitled to back pay, charter schools are too," Langhofer said.

That would boost the back payment cost to nearly $1.3 billion.

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