In a recent unanimous decision, the Arizona Court of Appeals held that school districts can't spend bond money on unapproved purposes when voters authorized that money for specific projects. This decision protects the state constitutionally-guaranteed rights of taxpayers and ensures that governments can't renege on their bond agreements with the voters.
In 2000, Cave Creek voters approved a $41.6 million bond agreement specifically to build new schools, buy school buses, and improve school grounds. Ten years later, school board officials decided to spend $13 million on projects they preferred, not what voters approved. Rather than asking voters for permission to use the money for other purposes, the district asked the state legislature for a special law to give the district legal cover.
But Arizona law requires school districts to use voter-approved bond money only on voter-approved projects, and the Arizona Constitution says that the voters, not politicians, must authorize bond measures. The Goldwater Institute sued on behalf of taxpayers, arguing that the school district can’t substitute its own preferences for a voter-approved contract, and the legislature can’t grant special permission to violate the Constitution. An Arizona trial court agreed that school districts may not use bond money in ways voters have not approved, because it “strikes a blow to the election process.”
The Court of Appeals affirmed this ruling. The Arizona Constitution gives voters a voice in how government spends their money, the Court said, and the purpose of a bond is “an essential consideration in voting for or against a bond measure.” Governments can’t induce voters to approve a bond measure for one purpose only to spend the money on another, unapproved purpose. “To hold otherwise,” declared the Court, “makes this constitutional guarantee illusory.”
The Arizona Republic: Ruling leaves Cave Creek’s $10 million for schools in limbo
Goldwater Institute: Friedman v. CCUSD lawsuit
Goldwater Institute: Trial court press release