More about that Prop. 123 ruling (Updated)

Linda Lyon covered this in her post below, but here are the links that media reports have been leaving out.

Judge Neil Wake’s 33 page Order in Michael Pierce v. Douglas Ducey, CV-16-01538-PHX-NVW.

The massive 2,232-page, $1.3 trillion spending bill approved by Congress last week.

The provision that Governor Ducey’s attorney Michael Liburdi asserts “retroactively” authorized what Judge Wake ruled was an unconstitutional act by Governor Ducey is found at “DIVISION S—OTHER MATTER – Title IV—Consent of Congress to Amendments to the Constitution of the State of Arizona”:

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Judge Neil Wake ordered the parties to submit further briefing to the Court on this issue in his Order:

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So until the parties have submitted their briefs and Judge Wake issues a final order, this case is not yet over. And depending on how that turns out, an appeal to the Ninth Circuit Court of Appeals is a possibility.

All of this could have been avoided but for the anti-tax GOP ideologues in our lawless Arizona legislature and our Koch-bot Governor Ducey who refuse to comply with their constitutionally mandated duty to adequately fund public education in Arizona:

Article XI, Section 6: The Arizona Constitution mandates a “system of common schools” that are “open to all pupils” and are “as nearly free as possible.”

Article IX, Section 3: The Arizona Constitution also mandates “(T)he Legislature shall provide by law for an annual tax sufficient, with other sources of revenue, to defray the necessary ordinary expenses of the state . . . “

Article XI, Section 10: The Arizona Constitution also mandates “taxation” to “insure proper maintenance of all state educational institutions.”

Vote them out.

UPDATE: The lawyer for plaintiff Michael Pierce says he is not buying it that the congressional act is retroactive authorizing the prior payments made under Prop. 123. State Treasurer Jeff DeWit agrees. Lawyer says Congressional blessing of Prop 123 not retroactive:

The attorney for the man who sued to overturn Proposition 123 said Tuesday he’s not buying the argument by Gov. Doug Ducey that last week’s congressional action makes the withdrawal of more than $344 million from the state education trust retroactively legal.

Andrew Jacob conceded that language, buried in the much larger federal omnibus budget bill, does specifically ratify the 2016 vote to dip into the body of the account to provide more money for schools through 2025. And Jacob, who represents Michael Pierce, who filed the original lawsuit in 2016, said that likely frees the state to make future distributions.

But that doesn’t deal with the fact the state already had given the money to schools by the time Congress gave its blessing.

“The language of the statute on its face doesn’t have any retroactive language,” he told Capitol Media Services. “And without that, there’s a strong presumption that it’s not retroactive.”

* * *

Jacob said there may be an argument that the new federal legislation effectively blesses all the payments made in the interim. He said he and his client will make a decision, probably by the end of the week, whether to ask U.S. District Court Judge Neil Wake to rule on that question of whether a federal law dated March, 23, 2018 can affect a vote taken May 17, 2016.

It isn’t just Jacob who contends it’s too late now to salvage the $344 million in payments made the first two years of Proposition 123 plus any cash paid out so far this current school year.

“It may fix it going forward,” state Treasurer Jeff DeWit said Tuesday.

“Congress actually has to overtly state it is retroactive,” he said. “It does not do that.”

And if Wake concludes they’re right, that leaves the question of how to get the money back.

* * *

The March 23 federal legislation may solve that going forward. But that still leaves what already was spent — and how to recoup it.

Jacob said this is a tricky area of law.

“You can’t sue the state in federal court,” he said. What federal judges can do, Jacob said, is enjoin illegal conduct by state officials.

And with the money already gone, he said, that leaves the option of blocking the state from making future distributions “until such time they replenish what they took out.”

That, however, has severe implications for schools which have put together budgets assuming the dollars will be there.

Less clear is what happens if the state stops making payments, even for a little while.

The deal that ended the schools’ lawsuit against the state promises the money will be there through 2025. And that could mean the state is on the hook, even if it can’t get the money from the trust account.

That, however, could blow a big hole in the state budget which at the moment is precariously balanced, with anticipated revenues closely matching anticipated expenses.

2 responses to “More about that Prop. 123 ruling (Updated)

  1. Frances Perkins

    It is sure that none of the representatives of the plaintiffs groups, including ASBA, and AEA, etc., thought the settlement that resulted in Prop 123 was a good one. They fully knew they were letting Ducey and the Legislature off the hook. The plaintiffs were always doubtful of the use of the land trust to solve this litigation. But the alternative considering the political situation, the needs for school districts to have money now, and the likelihood of more litigation for years to come, pushed a poor result. The plaintiffs were also conscious of things like Ducey packing the Supreme Court, and the possibility of a Constitutional crisis if the court said more money and legislature said, “Make Us!” The onus is on each person in this State to challenge ANY legislative candidate if they say,” we just don’t have the money,” they are lying through their teeth.

    • For Sure Not Tom

      As I recall, everyone was saying the lawsuits would begin the day after 123 passed.

      Seems we won’t pay teachers, but we will pay lawyers.