The Arizona Supreme Court clarified its ruling last month on the state formula funding for school districts that temporarily cast a shadow of doubt over the legal validity of pending bond issuances.

In a July 28 motion for clarification, Chief Justice Stanley G. Feldman said the court's earlier ruling "does not affect the bonded indebtedness" incurred under existing statutes.

"h was a very good order," said Fred Williams of Gust Rosenfeld, a Phoenix law firm. "It cleared up the questions that we needed cleared up. Arizona school districts can continue to sell bonds and operate as normal until the legislature can change the law."

On July 21, the state Supreme Court ruled that the funding formula for school districts was not legal under the state constitution, and it gave the state legislature "a reasonable time" to revise the statutory financing scheme for public education.

The ruling caused apprehension among issuers and their financing teams. It was unclear whether schools that wanted to issue debt had the legal ability to do so under the existing funding formula struck down by the court. As a result, several school district bond issues did not close on schedule.

Williams said the legislature will probably vote on the changes "sometime this winter."

-- Brad Altman, Los Angeles

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