Legislative Updates from Susie Cannata


It’s been months since the 2015 legislative session ended and weeks since legal negotiations between school groups and state leaders collapsed, but this week proved that a lot can happen quickly at the Capitol. In only a few days, an agreement was announced and approved by a majority of mostly Republican legislators.

The agreement settles a longstanding dispute over how much the state owed schools for annual increases for inflation. The payments were reduced by the legislature during the state’s budget downturn; legislators believed they had the authority to reduce the payments, but schools argued the payments were mandated by a law voters approved in 2000. The measure brought before the legislature this week contained funding on which both sides could agree, and now Arizona voters will be determine whether it becomes law.

Q: What was approved, and how is it funded?
A: The agreement brings $3.5 billion in new funding for K-12 education over the next 10 years, paid for by revenues from the state’s general fund and increased distributions from the State Land Trust. Governor Ducey proposed using funds from the Trust months ago; while his proposal would have allowed for two levels of distributions, the final agreement holds a consistent 6.9% distribution each year for 10 years. (Currently education receives 2.5% of the Trust.)

Q: Will anything interrupt these dollars from reaching schools?
A: There are several “triggers” that would allow the legislature to suspend the funding increases during economic downturns: if the balance of the State Land Trust begins to drop, if job growth and sales tax increases drop below 2%, or if education funding takes up more than half of the state’s spending, a detailed process is outlined to temporarily reduce the scheduled education funding for that year.

Q: When will schools get the money?
A: None of the new funding will be distributed unless voters approve some of the details. The state Constitution must be amended to allow more funding from the State Land Trust, and changes to the details on annual increases for inflation have to receive voters’ blessing.

A special election on these issues will be held on May 17, 2016. If voters sign off on the deal, schools would receive the first installment of their funding before the end of June.

Both sides of the legal fight agreed on this solution, but legislators were divided on the provisions. Republicans supported the full package, while all but a few Democrats opposed the method of obtaining revenues and voted against the ballot referral and the use of the State Land Trust rather than state tax dollars. All legislators supported the bill that included the distribution of new funding to schools.

The measure was approved by a vote of 21-7 in the Senate and 35-23 in the House, and the legislature once again adjourned until the 2016 regular session begins in January.

Susie Cannata
Peters, Cannata & Moody PLC