Alia Beard Rau, and Rob O'Dell

The Republic | azcentral.com

Proposition 123, the education-funding measure that had been locked in a too-close-to-call vote since election day, will pass, The Arizona Republic has projected.

Prop. 123’s lead grew Thursday to 17,000 votes statewide — or 50.8 percent "yes" to 49.2 percent "no" — as Maricopa County counted 66,000 early ballots.

With only 15,000 votes left to count in Maricopa County and an estimated 15,000 more statewide, there are not enough uncounted votes to change the outcome of the school-funding proposal that would pump an additional $3.5 billion into K-12 public schools over the next 10 years.

Prop. 123 was pitched as a settlement to a long-standing lawsuit, allowing the state to pay schools about 70 percent of what the courts ruled schools are owed because state budgets didn't fully fund voter-mandated inflation increases during the Great Recession. Gov. Doug Ducey, state lawmakers, school organizations and business leaders backed the plan, and invested millions of dollars to try to ensure its success.

“The votes have been counted and the result is clear,” Ducey said in a statement Thursday evening. “This is a huge victory for public education in Arizona. After years of lawsuits and fighting, we are moving forward and funding our teachers, students and schools — instead of lawyers.

“Thanks to the voters, schools will soon see a cash infusion, with billions of new dollars flowing in the years ahead. This will make the difference in the lives of kids and teachers all across this state, and that can’t be understated. These are the resources educators have been telling us they need, and by coming together and working together, we were able to make it happen."

There was little organized opposition, but in recent weeks a groundswell of voters and a handful of state leaders — including state Treasurer Jeff DeWit — raised concerns about the plan's details, specifically whether the higher withdrawals would deplete the land trust and whether state leaders would misuse various triggers that allowed the governor and Legislature to opt out of funding increases during tough financial times.

DeWit said Thursday evening that he considered it premature to call the race. "With a vote this close still, it is important to wait until all the votes are counted," DeWit said.

About 250 teachers, parents and educators were rallying at the state Capitol on Thursday as it became apparent that Prop. 123 would pass. Many said they were relieved by the outcome, but quickly noted what more they see is needed to fully restore education cuts made during the Great Recession.

“The closeness of this vote is a clear indication that voters want to see a bigger ongoing commitment to public education,” said Andrew Morrill, president of the Arizona Education Association. “There will be a moment of celebration, but there will be a long-term expectation that we go forward now into deeper conversations into education funding and take care of needs that Prop. 123 doesn’t address.”

What schools, students really get under Proposition 123

What happens now?

Arizona's K-12 public district and charter schools in the next few weeks will get an additional $224 million to apply to the current fiscal year. For next fiscal year, which starts July 1, they will receive an additional $230 million.

The districts can spend that money as they see fit, but a number of districts have committed to using all or part of the increase to give their teachers raises.

"Districts will actually be able to revise their budgets for this year and receive the funding within the next few weeks," said Chuck Essigs, lobbyist for the Arizona Association of School Business Officials. "Districts will have until June 30 to revise their budgets."

Essigs said districts have already planned how they will spend that money, as they only have until July 15 to pass their budgets and submit them to the state. He said some will give employees raises immediately and some have plans for raises for next fiscal year.

"All the districts that have talked to me, one of their priorities is to get money into the hands of the teachers," he said.

The plan must be submitted to the courts to make the settlement official, but Essigs said that is just a procedural step. "Both sides have agreed this settles the arguments that the school districts had," he said.

What it doesn't settle is what happens next.

Robb: Did the Prop. 123 losers really win?

Possible legal action

A Phoenix man on Wednesday filed what could be the first of several lawsuits challenging Prop. 123.

Michael Pierce filed the federal lawsuit alleging the school-funding plan violates the Enabling Act, which set the rules for Arizona's land trust fund before it became a state. He alleges the state needs congressional approval to increase payments from the fund. According to court documents, Pierce does not appear to be an attorney and is not being represented by an attorney. He did not return calls seeking comment.

Congress in 1999 gave the state approval to change the way it invested the fund, following a successful 1998 ballot measure. It never acted on a 2012 voter-approved fund change, a point supporters of Prop. 123 say shows Congress in 1999 had given Arizona all the legal authority needed to draw more heavily from the land trust.

Phoenix man sues over Arizona Proposition 123

The Congressional Research Service, which examines policy and legal questions for Congress, agrees.

"Congressional action to amend the Arizona Enabling Act does not appear necessary for Prop. 123 to take effect," the CRS wrote in a December report prepared at the request of U.S. Sen. Jeff Flake, R-Ariz.

DeWit, who opposes Prop. 123, has said he has legal opinions that state the opposite. Before the election, he warned a lawsuit over the issue was likely.

Attorney Don Peters, who represented the school districts in the funding lawsuit, said Pierce's case would not halt the distribution of funds to the schools.

A clause in the ballot measure says if there is a final judgment in a legal challenge, then Prop. 123 is invalid. A final judgment would require an opinion of the U.S. Supreme Court.

"In the interim, the obligation to grant payments continues," Peters said. "The schools still get the money."

And if the lawsuit begins to prevail, Peters said, congressional approval can always be sought. "That's usually not very hard to do," he said.

Proposition 123 could end 1 lawsuit, start another

Looking long term

Supporters of Prop. 123, led by Ducey, promised the ballot measure would be only the first step toward improving Arizona's education system. But state leaders refused to detail what the next steps would be prior to the election.

At a news conference Thursday night, Ducey said he will soon focus on what follows by meeting with business leaders and education groups.

The governor said he thinks it should involve outcomes such as test scores, graduation rates and college attendance. Those are a better way of measuring school success than funding levels, he said.

Ducey has vowed to not support new taxes.

"You've heard me say many times that I don't believe that spending is the measure of success," he said. "We started with resources because I was listening to teachers and principals, and we changed our priorities. I said we want to solve this resource question with a first step. That's what Prop. 123 was and tonight we're able to celebrate it."

In the past, Ducey has listed a few options:

Renewing Proposition 301, the sales tax voters passed in 2000 to help fund education, that expires in 2021.

Reworking the state's complicated, decades-old school funding formula under the guidance of Ducey's Classrooms First Council.

Providing training, support and raises for teachers.

Others have also begun discussing ideas for improving public education in Arizona.

Last month, teachers, parents and education-advocacy groups announced Prop. 123 GO! The campaign asks voters to hold state lawmakers accountable in the August primary and November general elections for continuing to boost education funding.

Arizona Education Association Vice President Joe Thomas has said advocacy groups will develop proposals and then parent and teacher groups will "pick from a menu of policies to say these are the priorities to make our schools better."

The Greater Phoenix Leadership, under the direction of new President and CEO Neil Giuliano, has gathered education, business and philanthropic leaders to begin discussing what they call Project 456. Giuliano said they will meet again this month and are focused on renewing Prop. 301, possibly in 2018.

4 things you need to know about Arizona's new school funding formula

He said the Legislature has not adequately funded education and he hopes new legislative leadership will change that.

"But we're assuming it's not going to happen to the extent it needs to," he said. "So do we look at that as a straight renewal of Prop. 301 at the level it was funded, or do we look at the current needs of Arizona and see if we want to ask Arizonans to invest beyond what 301 was the first time?" Giuliano said.

Essigs said the last time the business community got involved in education funding, it passed Prop. 301.

"It's very refreshing to have that again," he said. "And that's probably the only way we're going to have successful reforms in how we fund schools is if the business community and education community work together."

At Thursday's rally at the Capitol, educators said teachers and students didn't get all they deserve from Prop. 123. But they saw in the closeness of the race a reflection of the public's dissatisfaction over how schools are currently funded.

Julie Ciniawski, a teacher in the Scottsdale Unified School District, said state leaders must recognize the need for a new approach to education in Arizona.

“What we’ve been doing the last 30 years in this state hasn’t worked,” Ciniawski said. “It has hurt our future.”

Republic reporters Ricardo Cano, Ronald J. Hansen and Yvonne Wingett Sanchez contributed to this article.