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Goldwater Institute Seeks To Block School Misuse of School District Bond Money

January 29, 2015

PHOENIX –The Goldwater Institute filed a lawsuit today against Cave Creek Unified School District to stop district officials from using bond money in ways voters have not approved.

In a November 2000 special election, Cave Creek voters approved a $41 million bond program primarily to build new schools. The district had $13 million remaining after funding the construction for two elementary schools. Instead of using the leftover money on voter-approved projects, the district wants to spend the money on other ventures.

Courts in California, Florida, Nebraska, Texas, and West Virginia have established the importance of protecting contract guarantees between a government and voters in bond elections and the Goldwater Institute believes the school district’s actions violate the contract they have with voters.
“Imagine you hired a contractor to add a room to your home. Instead the builder decided to spend your money on a fence, swimming pool, and gazebo. If that happened, you’d sue the builder for violating your contract, and you would win. Public officials should be held to the same standard,” said Christina Kohn, the Goldwater Institute’s lead attorney on this case.

In May 2010, in an attempt to do an end-run around voters, the Arizona Legislature approved Section 34 of HB2725, a special law designed with Cave Creek in mind. The law allows certain school districts to divert bond money away from voter-approved projects to expenses preferred by district officials. “This special law effectively lets the school board break its contract and override the will of the voters,” said Ms. Kohn.

The Goldwater Institute Scharf-Norton Center for Constitutional Litigation is challenging the school board’s actions on two grounds. The first challenge is based on the contracts clauses in the Arizona and U.S. constitutions, which hold that a government may not interfere with a legitimate contract. In this case, both the legislature and the school board have violated the contract between the voters and the school district. The second challenge is based on the special laws provision in the Arizona Constitution which prevents the government from passing laws that don’t apply to all citizens equally. Because the law passed by the legislature only applies to a limited number of school districts, it is unconstitutional. 

Arizona state law requires school districts holding a bond election to mail voters a publicity pamphlet that explains how the money will be spent if approved. The Cave Creek district followed this requirement for its November 2000 special election. But instead of spending the money as voters approved, last year the school board decided to spend the remaining $13 million on a list of unapproved projects.

“That pamphlet contained the terms of a contract between voters and the Cave Creek school district that promised the bond money would be used in a certain ways including new schools, buses, or the repayment of debt,” Ms. Kohn said. “Refurbishing existing schools may be important, but voters did not approve those plans. The school district cannot simply break its contract with voters and go its own way.”
Read more about this and other Goldwater Institute cases to protect individual rights and keep government within its constitutional limits at The Goldwater Institute is an independent government watchdog supported by people who are committed to expanding free enterprise and liberty.



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