Wow! Government actually ordered to keep promises

A court opinion has been released in Arizona that prevents a school district from changing its plans for how to spend bond money approved by voters, essentially telling the taxing district it must do what it promised voters when they endorsed the plan.

Attorneys who fought the case involving bond proceeds held by the Cave Creek Unified School District say it has application nationwide, and one key strategist in the fight said he would welcome copycat lawsuits nationwide.

The ruling from the Superior Court of Maricopa County written by Judge Eileen S. Willett came in the case brought originally by the Goldwater Institute on behalf of Jayne Friedman against the district. The district in November 2000 had asked voters for $41.6 million in Class B bonds to build new schools and buy buses.

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As required by state law, the district mailed a publicity pamphlet to each household specifying a "complete list of each proposed capital improvement that will be funded with the proceeds of the bonds."

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Because of the circumstances of the construction projects, the costs and bond money availability, the last projects were not possible in the financing plan, so the district was left with about $13 million unspent.

School officials then decided to use that money on other projects. They were helped along by a new state law that appeared to grant school districts virtually unlimited power to change their spending proposals after voters give their approval.

But the court slammed that idea – and the law.

That law's Section 34 notes that when nine years or more have passed since a bond issue election, "the school district may choose to use the proceeds of any bonds authorized at that election for any necessary capital improvement."

"The court finds that Section 34 essentially abrogates the voters' rights existing at the time of their bond vote, and by so doing, strikes a blow to the election process and violates both the Arizona and Federal Constitution under the contract clause by retroactively impairing the reasonable expectations of the body political within the district," the court said.

The court said, "No significant, legitimate public purpose exists which justifies the government's retroactive taking.

"In short, the court finds that Section 34 retroactively changes the uses for which voters approved bond measure money may be spent. Section 34 is contrary to the reasonable expectations of taxpayers within the district, the express purpose of a bond election, and the Federal and Arizona Constitution," the court ruling said.

School district officials did not respond to a WND request for comment, but Clint Bolick, the director of litigation for the Goldwater Institute, which fought the legal case, said that the idea that a bond election establishes a contract between voters and the government is "hugely important."

"It is the one context which I have seen government officials held to their promises," he noted.

"Most Americans are very cynical about campaign promises, and justifiably so, because they are utterly unenforceable," he said.

But he said it should encourage Americans to see that at least in this context, there are consequences to promises.

He said while the case applies to the specific school district, those in other states should take note, as many states have similar constitutional provisions to Arizona regarding bond elections.

"These precedents are contagious in a very good way," he said. "In this case we actually cited some Texas precedents. Texas probably has the strongest protections of promises made in bond elections, and we helped apply those to Arizona.

"This definitely has the potential to spread beyond this case," he said, citing municipal bond elections, state bond elections, school bond issues, special districts and the like.

"We would love to see some copycat lawsuits out there."

According to a case resource page at the Institute, the issue wasn't complicated: "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."

"In practical terms, this ruling means that governments must abide by the rule of law and contracts, respecting voter rights. It also means the legislature cannot pass laws to carve out exceptions to the rule of law," said Darcy Olsen, president and CEO of the Institute.

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