Lawyers for Arizona deny wrongdoing in legal challenge to Prescott rodeo budget funding
Lawyers for the state of Arizona are denying that lawmakers did anything wrong by allocating $15.3 million for a rodeo in Prescott.
In a new court filing, Assistant Attorney General Hayleigh Crawford acknowledges that lawmakers are bound by the gift clause of the Arizona Constitution. It bars the state, among other things, from making any grant or subsidy "to any individual, association or corporation'' when there is no public benefit.
But Crawford denied that the appropriation made by state lawmakers earlier this year as part of the $17.8 billion budget violates that provision. And she also rejected the claim made when the lawsuit was filed in June that the appropriation does not serve a public purpose because it does not require Prescott Frontier Days, which is the recipient, to perform any public function in exchange for the appropriation.
The bottom line is that she wants Maricopa County Superior Court Judge Scott Blaney to reject the bid by two Prescott residents to enjoin the state from distributing the funds.
The outcome of the lawsuit, however, could have implications beyond this specific allocation.
"We would be hopeful that this would serve as a reminder that you can't give away public money,'' said attorney Danny Adelman of the Arizona Center for Law in the Public Interest which filed the lawsuit.
And he said even if a court were to determine that there is a "public purpose'' for the allocation — something that has yet to be decided — that isn't enough to make it constitutional.
"You also have to be getting something of roughly commensurate value for the public,'' Adelman said Monday.
He also is arguing there is a second legal violation.
Adelman said the Arizona Constitution spells out the kind of expenditures that can be made in a "general appropriations'' bill. That, he said, specifically includes funding for state agencies, state institutions and public schools.
Yet this $15.3 million does not fit any of that. So even if the allocation is not a "gift,'' he said, it still was appropriated illegally.
"If you do that, they need to be in a separate bill so you can't 'Christmas tree' it by attaching it to things that responsible legislators have to vote for,'' Adelman said.
Similar questions have been raised — though no lawsuit has been filed — over a $10 million grant in the budget to the International Dark Sky Discovery Center. But Republican Sen. John Kavanagh (R-Fountain Hills) where the center will be placed, said this allocation is different — and legal.
"Part of the problem with the Prescott (rodeo appropriation) is there was no designation as to the purpose of it,'' he said. "Whereas, the Discovery Center specifically said it's for dark sky activities.''
What's behind both allocations was the decision earlier this year by legislative leaders, facing a budget surplus, to give each legislator a certain amount of money — usually between $20 million and $30 million — they could allocate on certain pet projects.
Some legislators put dollars into road construction or traffic improvements. There also were funds for everything from subsidized feminine hygiene products at schools, psilocybin clinical research grants, electric vehicle recharge stations and various earmarks for local police departments.
Several also pooled their allocations for a $260 million one-time rebate for taxpayers with children.
The dollars for the Prescott Frontier Days came from the share of funds controlled by Republican state representatives Quang Nguyen of Prescott Valley and Selina Bliss of Prescott.
On paper, the appropriation never mentions Prescott Frontier Days.
Instead it is supposed to be distributed "to a nonprofit volunteer organization that operates a rodeo at the Yavapai County fairgrounds.'' And, the lawsuit says, the appropriation has no limit on how that "nonprofit volunteer organization'' can spend the cash.
But the understanding — not stated in the legislation — was the dollars are supposed to go to a $40.7 million master plan to renovate the rodeo grounds, which Prescott Frontier Days leases from the city.
A PowerPoint presentation by the organization claims that the plan would expand the ability to attract more equine-related events, to open and expand the facility for community events, and create a facility that would accommodate both public and private conventions, trade shows, meetings and festivals.
That drew a complaint filed by the Arizona Center for Law in the Public Interest filed by Prescott residents Howard Mechanic and Ralph Hess, the latter a retired Yavapai County Superior Court judge.
"The appropriation is not supported by any consideration, let alone a promise of significant direct benefits that serves a public purpose, as required by ... the Arizona Constitution,'' wrote Adelman.
For the moment, the funds sit in the office of state Treasurer Kimberly Yee who agreed not to distribute them until the litigation was resolved.
The lawsuit says there are other problems with the appropriation.
Adelman said that Nguyen, in a radio interview, said he believed that Prescott Frontier Days would be required to provide "matching funds'' for any appropriation. But there is nothing in the legislation spelling that out.
He also said that the kinds of changes that are planned would require the city of Prescott to approve permits and zoning changes. But Adelman said none of that has occurred and, in fact, there is nothing in the appropriation that actually requires any of that.
"Because the appropriation does not serve a public purpose, any distribution by the state treasurer to effectuate the Appropriation is an unlawful gift of public funds in violation of the Gift Clause,'' Adelman said.
But that, he said, is only part of the problem.
"Even assuming providing public funds to a nonprofit rodeo could qualify as a public purpose, the appropriation does not require that money be spent in furtherance of the rodeo or that it be spent at all.'' he said. "The Appropriation thus violates the public purpose prong.''
Consider, Adelman said, health care for the indigent.
"I think most everybody would agree that is a valid public purpose,'' he said.
"If you gave a million dollars to a doctor to do whatever he wants for whoever he wants, with no guardrails at all, I think everybody would recognize that even though there's a public purpose there, that, alone, isn't enough,'' Adelman continued. "There has to be something of roughly commensurate value that the people are getting, even if it's the fulfillment of a government purpose.''
That is where Kavanagh said his decision to allocate funds to the Discovery Center — with its specific requirements on how the dollars will be used — differs from the fight over the cash for the rodeo.
"They expect to have busloads of school children, morning and afternoon, taking the tour of the planetarium, the telescope and discovery center,'' he explained.
Kavanagh also said that astronomy students from Arizona State University will get "hands on'' training on telescope classes. And he said the fact it is open to the public shows a benefit, along with a "big tourism factor.''
The decision by the Attorney General's Office to defend the allocation comes despite a statement that Kris Mayes made earlier this year criticizing the move by lawmakers.
"Explain to me how that makes sense,'' she said in an interview with KAET-TV, the Phoenix PBS affiliate, saying state agencies are not getting funds they need. "These were bad choices that they made.''
Mayes said Monday she stands by her assessment.
"Giving money to pork-laden projects when our public schools and law enforcement agencies were underfunded was short-sighted,'' she said. And Mayes said she stands by that criticism now that the state is facing a $400 million deficit.
"However, it is generally my responsibility as attorney general to defend the state when it is sued, as in the Prescott rodeo situation, even when I initially disagree with the policy,'' Mayes said.
No date has been set for a hearing on the challenge to the funding for Prescott Frontier Days.