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Friday, July 11, 2014

AZ schools win $1.7 billion from state

Arizona's public schools are due an additional $317 million in funding for the coming budget year, a court ruled Friday, a decision that could cost the state an extra $1.6 billion over the next five years.

But the court left undecided Friday the fate of $1.3 billion in back payments that schools argue they're due for unpaid costs related to inflation.

The ruling by Maricopa County Superior Court Judge Katherine Cooper comes after the state Supreme Court last year ruled the Legislature failed to honor the direction voters gave in 2000, when they approved a ballot measure calling for annual inflation adjustments to the school-funding formula.

READ: Ruling on school funding
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The Legislature froze those adjustments for four years, during the recession, and resumed them for the fiscal 2014 budget year. But lawmakers did not retroactively adjust the base funding for inflation, nor did they provide money to make up for what was lost during the intervening four years.

Cooper, following the direction set by the Supreme Court, ordered the state to adjust base funding for schools in the coming fiscal year to $3,560 per student, a collective increase of about $317 million.

That increase will boost overall school spending by about $1.6 billion over the next five years but also could strain a budget that lawmakers say can't withstand the increase. Budget officials have already projected a possible shortfall in the budget year that begins in July 2016.

Cooper said another hearing is needed to determine how, or whether, to disburse $1.3 billion in back payments to schools. Those dollars, missing for four years, would have paid for teacher salaries and other classroom improvements.

"The court must determine whether the facts support the disbursement of yesterday's funds today," she wrote. The schools have argued they can put the money to work on classroom equipment, such as computers and building renovations; state officials argued they don't have the funds to cover that cost.

Cooper rejected nearly all of the state's arguments, including lawmakers' objection that only the Legislature can appropriate money.

But Cooper said that issue was decided by the Supreme Court: It held the Legislature violated the Voter Protection Act by not following the will of the voters when they approved a ballot measure in 2000 increasing school funding.

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