PHOENIX – As representatives of public education, the inflation lawsuit was brought by a coalition that includes the Arizona Education Association, Arizona School Boards Association and the Arizona Association of School Business Officials. Below is a statement on behalf of these representatives regarding the outcome of settlement discussions.

Plaintiffs Declare an Impasse
It is unfortunate that the prolonged settlement discussions in the Cave Creek v. DeWit case did not result in an agreement. The plaintiffs remain strongly convinced that a settlement would be in the best interests of our state. A settlement might still be achieved. Although the plaintiffs are prohibited by court order from discussing the recent negotiations, we are permitted to share our views concerning how an acceptable settlement might be reached.

Background History
The litigation concerns a provision in Proposition 301 that required annual inflation adjustments in education funding. Such cost-of-living adjustments do nothing to improve education funding. They keep funding from shrinking each year, in real dollars, due to the effects of inflation. The inflation adjustments required by Proposition 301 serve only to maintain a level of funding that was low to begin with. In recent years, that level of funding has become grossly inadequate.

Settlement Criteria
Any settlement must include inflation adjustments (as required by law and ordered by the courts) plus additional money to make up for the four years in which inflation was not given. If the plaintiffs were to agree to anything less, school funding would continue to diminish each year in constant dollars. That would be unacceptable.

Regarding Back Pay
For years, inflation adjustments made in amounts that the Superior Court has held were inadequate. The plaintiffs have asked the courts to order additional funding now to make up for the years in which funding was inadequate. This “back pay” exceeds $1 billion. Long before the recent mediation process, the plaintiffs offered to drop their claim for back pay if the Legislature would reset the base level to what it would now be if the law had been consistently obeyed. The plaintiffs received no response to that proposal. The plaintiffs remain willing to settle on that basis if a settlement is achieved promptly.

Open to Other Proposals
The plaintiffs also remain open to any other proposal that would insure that school funding does not go backwards. That would require additional funding for schools of about $336 million per year in current dollars.
For example, about $100 million of the additional funding that would be necessary to resolve this case could be sustainably supplied each year by trust land income. We believe the remaining necessary funds could be supplied in a number of ways, including a 0.4¢ increase in the sales tax.

In addition, state revenue is needed to generate the money necessary to solve this problem apart from negatively impacting other acute needs for funding.

Find a Solution and Fund AZ Schools
Obtaining adequate funding for our public schools shouldn’t require protracted litigation and court orders. We sincerely hope that, despite the failure to achieve a settlement during the recent mediation process, both sides can still find an acceptable solution that puts an end to the litigation and halts the erosion in funding for our schools.

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Media Contact:
Heidi Vega, Arizona School Boards Association
hvega@azsba.org, http://twitter.com/heidi_hvega or 602.339.6215 cell