Arizona Can’t Divert Land Trust Fund, Court Rules

The Arizona Legislature violated the constitution when it tapped a trust fund earmarked for education to help plug the state’s budget gap, the Arizona Supreme Court has ruled.
by | January 10, 2013

The Arizona Legislature violated the constitution when it tapped a trust fund earmarked for education to help plug the state’s budget gap, the Arizona Supreme Court has ruled.

In a unanimous decision Wednesday (January 9), the court said Arizona may no longer divert millions of dollars from the Arizona’s lands trust fund, which is set up to benefit schools, to pay for land management. That means lawmakers cobbling together this year’s budget must look elsewhere to operate the $16 million state Lands Department.  

When Arizona became a state a century ago, the federal government gave it 10 million acres of land. Revenue from sales or leasing of that land goes into a trust, whose beneficiaries primarily include schools. But, under a law passed in 2009, the legislature used about $20 million of that money to pay for the land's management. The move meant to free up money in the state’s strained general fund.

An elementary school district and two teachers sued the state, calling the move unconstitutional. The Supreme Court agreed.

The constitution’s language “does not permit diverting proceeds instead to a management fund,” wrote Justice Scott Bales. “Nor does the context suggest...[the] language should be interpreted to mean something other than what it says.”

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