Issue link: http://digital.copcomm.com/i/654069
8 ADVOCATE | SPRING 2016 at the capitol Who are the parties to the lawsuit? The parties include Plaintiffs, Defendants, and Interveners. The Arizona Education Association ("AEA"), the Arizona School Boards Association ("ASBA"), the Arizona Association of School Business Officials ("AASBO"), and several districts and taxpayers are the Plaintiffs who brought this lawsuit. The Defendants were originally the State Treasurer in the Treasurer's official capacity (originally Doug Ducey, but now Jeff DeWit the current Treasur- er) and the State of Arizona. In early 2014, the Senate President and Speaker of the House intervened and became parties to the litigation. In late 2014, the Arizona Charter Schools Association intervened in the back pay claim. What is the history of the lawsuit? After the plaintiffs filed the lawsuit in October 2010, the Arizona Supreme Court ruled on September 26, 2013, that in Proposition 301, the voters constitutionally directed the Legislature to annual- ly adjust all components of the Base Level for K-12 public school funding for inflation. Thus, the Legislature's failure to adjust the Base Level funding for inflation violated the Voter Protection Act. The decision emphasized that the Voter Protection Act limits the legislature's power to modify voter initiatives and referenda. Then the Supreme Court remanded the case to the Superior Court for a judgment implementing its decision.2 On remand, on July 11, 2014, Superior Court Judge Cooper ordered the Base Level for 2013-14 to be reset at $3,559.62. When inflation is applied to that court ordered Base Level pursuant to A.R.S. § 15-901.01, the correct Base Level for 2015-16 is $3666.84. The Superior Court also held an evidentiary hearing on back pay, but there has not yet been a decision on that issue. The state appealed the reset order to the Court of Appeals, arguing that it should get credit for years when it adjusted the Base Level in excess of inflation. It was estimated that a final decision on this appeal on the reset would not be for at least two more years, and it would be even longer for the back pay issue. Did the lawsuit resolve any issue? Yes. The Supreme Court decision settled the issue as to whether inflation funding is voter protected. Moving forward, the Legisla- ture must fund inflation on the Base Level and all components to the school funding formula. The decision did not address the is- sues of Base Level reset or back pay, which is why the parties were still litigating after the Supreme Court decision. Settlement Why is the settlement good for kids? If voter approved, this settlement in Proposition 123 gets over $530 million new dollars to schools in the next two school years. Schools will receive about $298 million dollars in Base Level reset and Ad- ditional Funds this school year in June 2016. 3 Then, schools will receive another $300 million new dollars for FY17, which begins July 1, 2016. These dollars are flexible for schools to use as they need. Also, the settlement preserves inflation funding in perpetuity. Our school Base Level funding will again be adjusted for inflation as the voters wanted. Scottsdale Education Association members grading papers on February 13, 2016, at Paradise Valley Mall, to raise awareness on Prop 123. It is worth noting that the plaintiffs previously offered to settle the case if the state fully reset the Base Level at $3666.14, in exchange for dropping all claims for back pay. The Plaintiffs were open to an up to a three year phase-in of the full required reset. However, this settlement gets schools to the full reset figure in YEAR TWO of the settlement (FY17), plus provides almost 50% of the back pay. Why did the Plaintiffs settle? Litigation was going to take at least 2 to 3 more years, and in that time, schools would have no additional funding. Also, even if the Plaintiffs were to ultimately prevail, the Legislature must still ap- propriate any additional funding, so it was possible that Arizona schools would be then facing further delay while the state litigated whether the courts could force appropriations. In addition, were the schools to prevail, ultimate resolution of the case would likely come with negotiation – very likely with an outcome similar to the settlement just achieved. Finally, any litigation has risks, so the Plaintiffs chose to settle for money in schools this fiscal year over a possible, but not guaranteed, victory that might not ever translate into money in schools.