Opinion: Now that the Ninth Circuit has cleared any legal questions, perhaps we’ll better appreciate the school funding achievement that was Prop. 123.

Ducey brought education leaders and lawmakers together to strike a deal that would pump $3.5 billion into K-12 education over 10 years and bring an end to a five-year education-funding battle. Voters narrowly passed Prop. 123 in a 2016 special election. (Photo: Patrick Breen/The Republic)

The Proposition 123 saga ended a few weeks ago, to borrow from T.S. Eliot, not with a bang but a whimper.

The end came when the 9th Circuit Court of Appeals reversed – in a brief, unanimous per curiam opinion – a ruling by District Court Judge Neil Wake that Prop. 123 had been illegally implemented. A brief, unanimous per curiam opinion is the court’s way of saying: This wasn’t a close call.

Prop. 123 is the measure approved by voters in 2016 to temporarily boost the amount distributed to schools annually from the state land trust to 6.9% of its value. That has increased what the schools receive by hundreds of millions of dollars a year.

The proposition engendered surprisingly passionate opposition and was difficult to pass. Wake rekindled raw feeling about the measure with his ruling that its implementation was illegal since it required the consent of Congress to change the distribution formula for trust lands granted the state through the Enabling Act.

Wake’s ruling has always been flawed

Wake’s decision was treated as a bang by Prop. 123 opponents even though, as a legal matter, it was a whimper. Opponents clung to Wake’s decision as proof that Gov. Doug Ducey, who fashioned Prop. 123, had acted recklessly and irresponsibly.

In reality, it was Wake who had acted recklessly and irresponsibly, as was pointed out in this column.

In the first place, Wake not only granted standing to some random dude off the street, he recruited a lawyer to represent the random dude. All the actual beneficiaries of the trust, who would have standing, supported Prop. 123 and opposed the lawsuit.

In the second place, Congress resolved any legal question about its consent by subsequently passing legislation expressly authorizing, including retroactively, the change in the distribution formula approved by Arizona voters.

Wake nevertheless issued his ruling, claiming that Ducey was a constant threat to violate the state land trust. In making this claim, he spewed forth a litany of factual errors regarding school finance in Arizona and Prop. 123.

The 9th Circuit reversed on the grounds that the random dude didn’t have standing and that Congress’ subsequent action resolved any legal questions. Moreover, since Ducey has no independent authority to alter the distribution formula in the future, there was no constant threat warranting the perpetual wag of a judicial finger.  

Prop. 123 is Gov. Ducey’s finest moment

Prop. 123 was Ducey’s finest moment as governor. Perhaps now that can begin to be more broadly appreciated.

At the time, the state was potentially headed toward a constitutional crisis. The schools were arguing in court that the state had shortchanged them on inflation funding. The Legislature took the position that, properly calculated, that was untrue. There was a real possibility that the courts would order increased school funding that the Legislature would refuse to appropriate.

The Court of Appeals tried to arbitrate the dispute, but failed. At that point Ducey, who wasn’t governor when the alleged skimping took place, stepped in and successfully negotiated a settlement.

The settlement included Prop. 123 and increased appropriations from the general fund. All the major school organizations – representing school boards, administrators and teachers – supported the settlement.

The Legislature did as well, referring Prop. 123 to the ballot. In fact, increased general fund appropriations to K-12 schools have greatly exceeded what was committed to in the settlement.

More money to kids – what’s not to like?

The opposition to the settlement and Prop. 123 rested on a canard, one inexcusably repeated, without any proof or evidence, by Wake in his indictment of all things Ducey. The canard was that Prop. 123 represented an invasion of the trust’s principal. That future students were being cheated to benefit today’s.

In reality, the previous formulas were cheating today’s students by not distributing all the trust’s earning for their benefit, as originally intended.

When Prop. 123 was passed, the portion of the trust reserved for K-12 schools was valued at $4.8 billion. Today, it is valued at $5.7 billion. Earnings are down in this economy, but the 10-year average is still 8.8% a year, well above Prop. 123’s 6.9% distribution.

A constitutional crisis averted. Hundreds of millions of additional dollars a year for K-12 education. A fairer distribution of trust earnings for today’s students.

Not a bad day’s work.

Reach Robb at [email protected].

Read or Share this story: