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Arizona budget revives debate over school funding

PHOENIX — For nearly a decade, Arizona lawmakers have followed a voter-approved law and increased basic school funding every year to keep up with inflation.

Now, a provision inserted in Republicans’ draft budget proposal would change how the law is interpreted, affecting roughly $100 million a year in school funding amid a state budget crisis.

The proposal is drawing the ire of a major school group despite reassuring words from a Republican budget-writer who said lawmakers are just looking for some budget wiggle room and have no intention of taking the extra money away from schools. The group is threatening to sue.

The inflation adjustments were required by a state law passed by voters in 2000. Proposition 301 boosted the sales tax to pay for teacher raises and other classroom improvements.

But it also contained a provision requiring annual increases by 2 percent or the rate of inflation, whichever is less. That was included because lawmakers sometimes did not give inflation adjustments or provided tiny ones.

The wording of that provision has been at issue since shortly after Proposition 301 passed. It required the adjustment for the main school funding formula “or” for parts of it.

Official explanations given to voters in 2000 implied that the adjustment applied to the main formula. Then-Attorney General Janet Napolitano issued an opinion in 2001 concluding that the wording and context of the law meant the inflation-adjustment covered the main funding formula and other funding components.

Some lawmakers have grumbled over the years about having their hands tied and opportunities lost for saving money since Proposition 301 passed, but the Legislature has abided by Napolitano’s finding.

Lawmakers now want to discard the requirement that they boost the main school funding formula and instead boost a much smaller part of the formula as they struggle to close an estimated $3 billion gap in next year’s state budget.

The change is included in a Republican draft budget proposal, said House Appropriations Chairman John Kavanagh, R-Fountain Hills.

A partial inflation adjustment would cost $8.2 million, while adding an adjustment to the current “base” per-student funding of $3,291 would add $102 million, according to a legislative staff budget briefing book.

But Kavanagh said lawmakers just want the ability to move money around to give both the state and districts more flexibility.

“When the dust settles, we’re going to give the schools as much as we can,” he said.

In the 2009-2010 budget, a full inflation adjustment would

The Arizona School Boards Association said its arguments that the inflation adjustment can’t be changed are bolstered by Napolitano’s opinion and the Legislature’s years of adherence to it. They cite Arizona’s constitutional protection for voter-approved laws.

The association said in a recent letter to top legislative leaders that the group recognizes the state’s “unprecedented fiscal crisis” and would not sue over other “reasonable adjustments” to school funding.

But it’s important — and legally required — to keep the full inflation adjustment so that it’s still on the books and state funding isn’t at risk, said Panfillo Contreras, ASBA executive director.

Kavanagh said current legislators don’t have to pay any heed to Napolitano’s 2001 opinion.

“It was an absurd ruling that defies all logic and grammar,” he said. “The bottom line is we can do either.”

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