- Associated Press - Friday, October 30, 2015

PHOENIX (AP) - The Arizona House passed a series of bills that will pump $3.5 billion into the state’s K-12 education system over 10 years late Thursday, sending the package to the Senate for action.

The late-night votes came after Democratic efforts to amend the bills, including removing language that will cap school future spending, were all rejected by majority Republicans.

The vote was unanimous on the bill that actually funded the plan, but broke along party-lines on the two other bills - one that sends the package to voters in May and another that taps state trust land cash to pay for more than half the proposal.

The action came after hopes for a fast-tracked special session of the Arizona Legislature were dashed when last-minute changes to the bills formalizing a school funding settlement delayed work for much of the day and the Senate went home for the night. Instead, the Senate plans to act Friday.

“The agreement we vote on today puts significantly more resources into K-12 education - $3.5 billion over the next 10 years without raising taxes,” Majority Leader Steve Montenegro said. “The legal issues remaining in the lawsuit could have taken months or even years to resolve.”



The developments came after a day that saw a former state treasurer warn Arizona lawmakers that settling a school funding lawsuit by boosting withdrawals from the state’s permanent land trust fund risks trading one suit for two because the principal of the $5.1 billion fund is at risk.

Former treasurer Dean Martin’s testimony was backed up by current treasurer Jeff DeWit, who also opposes the current structure of the deal hammered out by Gov. Doug Ducey, Republican legislative leaders and schools that sued.

Martin told members of the Senate appropriations committee that he believed the state would be sued in federal court for tapping the principal of the fund and schools would be forced to renew their suit because they didn’t get their promised money.

An infuriated Biggs ran to the hearing after Martin said members had been threatened to vote for the proposal.

“What I just heard, a reference that you all have been threatened, you may have countered it, but it is ridiculous, it is scurrilous, and quite frankly below the respect I had for the former treasurer,” a winded Biggs told the panel.

The exchange shows just how emotional the special session Ducey called Wednesday night had become.

The $3.5 billion, 10-year deal requires legislative and voter approval. The Legislature will enact the terms of the deal that closes out a lawsuit filed by schools after lawmakers stopped making required annual school inflation adjustments during the height of the Great Recession in 2009.

In addition to failing to give the inflation adjustments, Arizona made many other severe cuts that left schools and parents reeling. According to a 2014 study by the Center for Budget and Policy Priorities, Arizona per-pupil spending fell more than 47 other states since 2008 and funding remains 17 percent below pre-recession levels.

Ducey’s first-year budget left K-12 funding flat but increased pressure on Republicans who control the state’s government to do something. Ducey proposed a plan to boost funding in June, to be enacted next year, but mounting pressure and the need to settle the inflation funding lawsuit forced his hand.

Ducey spend nearly an hour Thursday walking the halls of the Senate and House, urging on Republicans who back his plan, thanking staffers, posing for photos and asking reluctant Democrats for support.

“To see the Legislature come together in this political environment would really speak volumes to the people of the state, to the teachers that are in those (classrooms) right now,” he told Rep. Lisa Otondo, D-Yuma.

Otondo replied: “With much respect sir, as a former school teacher I have much concern. I have to vote my conscious. And I am so thankful that you came by our office and are reaching out. I just wish you had come by sooner.”

Schools that sued the state say they are satisfied with the agreement in which they received about 70 percent of the cash they would have received if they had ultimately prevailed in the state Supreme Court.

The settlement cash comes from $1.4 billion in general fund money and $2 billion from the land trust.

Democrats say the state has surplus cash to settle the case without tapping the trust, but the governor has pushed back.

“We’ve just been through a brutal six-year downturn, and we’ve had six months of good news,” Ducey said. “And so many people want to party like it’s 2006 and spend all the money that we have. This plan is the most responsible and sustainable plan so that we can guarantee K-12 funding going forward.”

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