Federal appeals court dismisses challenge to Arizona Proposition 123 education funding News
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Federal appeals court dismisses challenge to Arizona Proposition 123 education funding

The US Court of Appeals for the Ninth Circuit ruled Tuesday that a challenge to Arizona’s Proposition 123 education funding should be dismissed.

The plaintiff, Michael Pierce, brought suit against Arizona Governor Douglas Ducey, alleging a violation of the New Mexico-Arizona Enabling Act.

To provide funding for public schools in Arizona when the state was first created, the US granted Arizona hundreds of thousands of acres of land and established a “permanent inviolable fund.” The Enabling Act originally required the state treasurer to place trust funds in “safe, interest-bearing securities.” Under the act, Arizona had to consent to the terms and conditions of the land grants in its constitution.

Because of inflation, the trust tended to decrease in value over time because Arizona could spend all of the income earned from the trust. To solve this problem,  Arizona voters approved amendments to the state constitution in 1998. As amended, the constitution provided that the trust fund would reinvest earnings, interest and dividends while paying out annual distributions.

In May 2016 Proposition 123, a constitutional amendment that increased the rate from 2.5 percent to 6.9 percent of the fund’s average monthly value over the preceding five years, was passed. Pierce filed suit in 2016, alleging a violation of the Enabling Act. The district court declared that the Enabling Act required congressional consent to any changes to the state constitution affecting the investment or distribution of assets in Arizona’s public land trust for public schools.

On appeal, the appeals court determined that Pierce’s case should be dismissed because he lacks standing and the case is moot. Pierce claimed that the only injury particular to him was his individual belief that the state was no obeying federal law. The court stated that this was not enough to constitute an “injury in fact,” because this interest was not “concrete.” The case was also moot because the state constitutional provision “undisputedly accords” with the Enabling Act.

The court vacated the district court’s judgment and remanded the case within instructions to dismiss.