Judge finds Arizona school facilities funding system is unconstitutional

Bloomberg News

Arizona's system for funding public school facilities is unconstitutional, a judge ruled in a lawsuit that spotlighted districts' unequal access to local property taxes and bonds.

In a decision released on Wednesday, Maricopa County Superior Court Judge Dewain Fox concluded the current system fails to meet constitutional standards established by the Arizona Supreme Court.  

School districts and others that filed the lawsuit in 2017 contended insufficient state funding for a capital finance system and minimum building standards enacted in the wake of a 1994 high court ruling made schools dependent "largely if not exclusively upon the property wealth in the district and the willingness of that district's voters to pass bonds and (property tax revenue limit) overrides."

The judge found "the legislature has chosen to fund public schools through a financing system that itself causes substantial disparities between districts." 

The ruling noted that districts with access to funding based on property wealth can implement preventative maintenance programs to avoid falling below school facilities minimum adequacy guidelines while still providing for other capital and operational needs. 

"But districts without access to local bond funding often must await a system failure — meaning those districts are below (the guidelines) — before being eligible to apply for building renewal grant funding to correct the deficiency," the ruling added. "Moreover, the application and approval process is lengthy and funding to correct existing deficiencies often is not readily available."

Plaintiffs hailed the ruling as "a historic victory for Arizona's public school students."

The trial, which began in May 2024, was delayed for years as plaintiffs sought settlements. With the election of a Democratic governor and attorney general in 2022, the defense in the case was turned over to Arizona's Republican House speaker and Senate president, who are listed as intervenors in the lawsuit. 

Senate President Warren Petersen and House Speaker Steve Montenegro said the ruling will be appealed. The intervenors argued the state provided substantial funding and put the blame on districts for noncompliance with minimum facility guidelines by choosing to spend discretionary state dollars on other priorities or failing to undertake preventative maintenance. 

A Minimum Adequacy Guideline Modernization Committee created under a 2023 executive order by Gov. Katie Hobbs recommended revisions in November that focused on security, air quality, space configuration, information technology infrastructure, and structural and systems maintenance and soundness.