Education Funding Plan

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State Lawmakers will meet in special session to consider a $3.5 Billion owed to schools following a lawsuit by the schools. Associated Press reporter Bob Christie will tell us more. (Arizona Capitol Times editor Jim Small will tell us more.)

TED SIMONS: Coming up next on "Arizona Horizon," state lawmakers prepare for a special session to settle an education funding lawsuit. Also tonight, what business would like to see from Arizona's education system. And we will take you to the Shemer Art Center in Phoenix. Those stories next on "Arizona Horizon."

VIDEO: "Arizona Horizon" is made possible by contributions from the friends of eight, members of your Arizona PBS station. Thank you.

TED SIMONS: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. A Washington-based watchdog group funded by clean energy interests sued the Arizona corporation commission over access to Commissioner Bob Stump's text messages. The project claims that the commission and state attorney general's office have failed to promptly turn over records of Stump's text messages and that Stump broke the law by deleting public record texts and throwing away the state issued iPhone.

Martha McSally introduced a bill that would -- also provide mental health treatment in an effort to reduce gun violence. Bill has bipartisan support and blessing of the NRA but faces opposition from gun control advocates, including a group headed by former Congresswoman and gun violence victim Gabrielle Giffords which calls the bill a smoke screen and says that quote it does more harm than good. New poll shows that Sheriff Joe Arpaio could face a tough re-election bid. MBQF, local public affairs and consulting firm, shows an almost even split. And survey asked voters if they would be willing to pay slightly more in taxes to fund education. 46% yes. 39% said no. State lawmakers are expected to be called into special session any time soon now to settle an education funding lawsuit. To update things and explain what exactly lawmakers are considering, Bob Christie of the associated press. Good to have you here.

BOB CHRISTIE: Good to be here.

TED SIMONS: We are taping early in the evening, 5:30 or so. By the time the 10:00 show rolls around we should be in special session.

BOB CHRISTIE: We hope so. Lawmakers from the house and Senate have been told to be back after dinner, 7:30, for a potential special session call from the governor. We expected it at 1:00 in the afternoon, 3:00 this afternoon -- they have to come into session tonight if they want to be done by Friday.

TED SIMONS: Sometimes they are spread out because speed bumps developed along the way. Any indication of that happening?

BOB CHRISTIE: They got together this morning to go over the actual bill language. News of the settlement broke over the weekend. Came to an agreement on Friday in principle on all elements to settle the five-year lawsuit, legislation's failure to fund fully the inflation requirement. Voters told the legislation to do that and when we hit the recession they stopped and it has been going on ever since. Reached an agreement in principal but now they have to put it into a law and that is where the stumbling block is, talking about a 7:30 start instead of a 1:00 start this afternoon. Law written and they met with their schools, and said, well, let's tweak some stuff. That's what I'm hearing. I'm not in the room. We're hoping they're done with that soon.

TED SIMONS: Let's talk about specifics here. What is being debated?

BOB CHRISTIE: Well, the long debate that has been going on for years is first off, whether the legislature had to fund that 2% increase every year. Legislature said no. The school said yes.

TED SIMONS: Stop there. Why did the legislature say no? Voters said yes.

BOB CHRISTIE: Well, they argue that there is a phrase in the voter approved 2000 law which raised sales taxes which said you can raise all of the school funding or just a portion of it. They argue that the or is controlling and that they could just raise like the school busing component, which is a tiny portion, which is what they did. They said we -- we gave them a raise in the school, in the transportation component, but they didn't fund the basic education, the 20 or 30 or $50 million a year that they're supposed to. Schools went to court. They lost initially, went to an appeals court. Appeals court says absolutely, constitution says you have to fund all of that. Supreme court said absolutely. Trial court, year ago, legislature has to pay $336 million right now. Additional amount on top of that every year. That is where we have been for the last year.

TED SIMONS: Eventually the court said okay maybe not right now. We can hold off until it plays out in the courts or until the court hoped that a settlement was reached. A settlement was reached. Did the governor actually broker this deal, governor's office pretty much responsible for this deal?

BOB CHRISTIE: It went into mediation in January. Appeals court said guys, talk this out. We don't want to have to deal with it. Get a deal. It went on for six months. In August, declared an impasse. Labor Day or shortly there after, the governor got involved. Said come to my office. Governor's staff has overseen, moderated these discussions between the republican controlled legislature, Andy Biggs, David, speaker and Senate president and lawyers representing the school districts. They have been meeting regularly for weeks now.

TED SIMONS: How is this -- I wonder sometimes why some lawmakers even show up. I mean, obviously leadership was involved, governor's office was involved, school districts involved, sounds like the vast majority of lawmakers had no idea what was going on.

BOB CHRISTIE: In, they -- no, they didn't. Democrats, minority party, they weren't included at all. Same with the budget, budget done behind closed doors, here it is, you have three days to vote on it.

TED SIMONS: It sounds like schools have settled for less in a variety of ways. Didn't get everything, 330 down to $249 -- $625 million over 10 years is not the $1 billion they said they were owed. They are not getting everything they asked for. Why are they settling?

BOB CHRISTIE: They are settling because it takes risk off of the table. That's why the -- that's why you settle anything. Legislature has a risk of getting an order from the supreme court of the state of Arizona that says pay $1.2 billion over five years. And pay $1.3 in back payments that you owe. So, there is $3 billion on the table for the legislature. For the schools, they have had no money for this whole time. They haven't had that money. So, it behooves them to say, well, 70%, which is what this works out to be, 70% of what we're owed going forward is better than nothing for a few years. The crisis going on in schools right now as we know.

TED SIMONS: Especially since some in the legislature are prepared for a constitutional crisis. They simply were not going to pay this money.

BOB CHRISTIE: We haven't got to the constitutional crisis yet. That is what the worry was, supreme court would issue an order to the legislature to pay the money and the legislature in a position where they don't think they owe it.

TED SIMONS: We will learn more about this as days go by. On a couple of points, if education spending hits a certain part of the budget over -- 49 or more percent, if the -- and another aspect is that the economy goes south, if there is some sort of recession again, it sounds as though all of the money promised in this deal doesn't necessarily happen. If that is the case, what happens?

BOB CHRISTIE: Well, that's what the legislature got first off. The legislature wanted triggers in case the economy tanked again, they wouldn't be on the hook for the insulation funding. If the economy tanks, we don't have sales tax growth, job growth, they don't have to pay inflation that year or the next year and they can under certain circumstances claw back previous ones. 2026, a provision that says if the education budget exceeds 49%, or 50%, two triggers there -- of the general fund budget, we can cut school funding. What happens then? Well, the schools go without their funding for a year or two until the economy recovers.

TED SIMONS: No backfill --

BOB CHRISTIE: But there is a deal there where we don't -- when we stop making inflation funding, number is put into the formula. The next year they inflate on that larger number. It is really complicated.

TED SIMONS: And, again, this deal is for 10 years, correct, settlement?

BOB CHRISTIE: A 10-year deal, $3.5 billion, $2 billion comes from state land trusts which voters have to approve. Voters have to approve changes in the inflation funding requirement. Legislature wants wiggle room there for in bad times. They will have to okay that. One referral to voters for a special election in May.

TED SIMONS: And the land trust money -- I know the governor wanted 10% and down to 5. It looks like 6.9 for 10 years.

BOB CHRISTIE: Levelled off, almost the same amount of money, slightly less amount.

TED SIMONS: After 10 years, what happens?

BOB CHRISTIE: Well, after 10 years, that funding source goes away and goes back to the 2.5% -- actually less than that that it is now. Legislature is going to have to figure out how to fund it. Requirement to fund the inflation dollars remain.

TED SIMONS: Last question, before we go. Earlier in the evening we're recording, by the time the 10:00 show hits we should have a special session or else -- yeah, three days at the most on this? Are the votes there? Is everyone on board? They usually don't call a special session unless everyone is on board.

BOB CHRISTIE: Republican leadership plan -- I'm pretty sure and speculating because I haven't gone and talked to all 17 republican senators, I think they've got all 17. I know they have at least two -- Senate out of the way. House 31 votes needed, 36 republicans. Probably good there. Question is how many democrats might they get? There are those who say we will get 50 or 55 out of 60 in the house. We are going to have to see that. Tonight is procedural. They introduce the bills. Tomorrow committee, appropriations committees and rules committees and come out to the floor and debate and by this time tomorrow we should have a pretty fiery debate on the floor.

TED SIMONS: Good stuff. Good to have you here. Thank you for joining us.

BOB CHRISTIE: My pleasure.

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Bob Christie:Associated Press reporter

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