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Prop 124

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Fewer than 9,000 votes separated approval of Proposition 123 from disapproval in the May 17 Special Election.

By late Wednesday, ayes had it at 50.48 percent.

Tuesday’s election had a statewide turnout of almost 28 percent. There were two questions on the ballot.

If the count holds up for Prop. 123, it is expected to provide $598 million to Arizona schools by increasing the annual distributions from the state land trust permanent funds for schools. It is a settlement of so-called inflation litigation against the state Legislature. A Superior Court judge said the state owed schools $1.3 billion.

Pinal County voted in favor of the settlement, 16,822 to 14,985.

Maricopa Unified School District Superintendent Steve Chestnut said he expected the vote to be close. If it does pass, MUSD expects to receive around $1.25 million in June. That will be worked into the 2016-17 budget, with a vote probably at the June 22 meeting of the board.

Proposition 124 had an easier time getting voter approval Tuesday. It passed by a margin of 70 percent to 30 percent.

It amends the Constitution to allow a compounding cost-of-living adjustment for the Public Safety Personnel Retirement System.

Pinal County voters approved the proposition, 20,884 to 10,414.

Proposition 123
Yes    464,847     50.48%
No     456,058     49.52%

Proposition 124
Yes     625773         70%
No     267,098     30%

Proposition 123 (education funding)

The Basics
Prop. 123 amends the Arizona Constitution to increase the annual distributions from the state land trust permanent funds to schools, universities and other public institutions from 2.5 percent of the average market values of the funds to 6.9 percent for the next 10 fiscal years.

The state land trust was established when Arizona became a U.S. territory in 1863, setting aside parcels to benefit schools. The state Constitution requires distributions from the state trust lands to public schools to be 2.5 percent of the market values of the funds through Fiscal Year 2020-21.

In 2000, Arizona voters approved Prop. 301, which includes a requirement the Legislature adjusts education spending for inflation. In 2010, the Arizona Education Association and other parties sued the state and state treasurer (Doug Ducey at the time), claiming lawmakers did not adjust education funding for inflation during the recession years.

In 2013, the Arizona Supreme Court ruled the Legislature had violated the Voter Protection Act and owed schools about $1.3 billion. In 2014, a Superior Court judge ordered the state to reset the base level of its K-12 funding and pay $331 million more per year to schools as compensation.

The Legislature appealed and agreed to settle with the plaintiffs. That settlement is Prop. 123. If passed by voters, the proposition would provide $298 million to schools in June and $300 million next fiscal year. If the proposition fails, the lawsuit continues.

Proposition 123 could bring $2 million to MUSD over the next two years. It is also controversial among Arizona voters. It has divided Republican from Republican, Democrat from Democrat and education supporter from education supporter.

Is the settlement the best deal the schools can get in a timely manner, or should they continue to sue for everything the courts have ordered, or is the funding formula in Prop. 123 too unstable for its purpose?

Proposition 124 (public retirement)

The Basics
Prop. 124 amends the Arizona Constitution to create an exception in the public retirement system to allow adjustments to the Public Safety Personnel Retirement System in approved Senate Bill 1428.

Gov. Doug Ducey signed SB 1428 on Feb. 16, creating a new retirement benefit structure for public safety personnel hired on or before July 1, 2017, without a significant raise in taxes. It included a new mechanism to create a cost-of-living adjustment. The Arizona Supreme Court determined Article 29, Section 1 of the state Constitution prohibits adjusting down a future permanent benefit. If approved, Prop. 124 would replace the permanent benefit increases for retired members and their survivors with a compounding cost-of-living adjustment. The COLA would be based on the average annual percentage change in the Phoenix-Mesa consumer price index.

No arguments against Prop. 124 were filed with the state’s election office.

This item appeared in the May issue of InMaricopa.