A lack of consensus regarding inflation back pay for teachers at Arizona’s schools has brought the state and the various school districts into formal mediation to attempt a settlement. The state has set aside $74 million to settle a lawsuit regarding inflation back pay. The districts have complained that this is less than one-third what the judge ordered at the resolution of that lawsuit. The school districts claim at least $250 million is owed for this year alone.

The dispute results from a referendum in 2000 that passed requiring the state to increase funding for grammar schools every year. Last year six school districts as well as the state school board association and the Arizona Education Association filed a lawsuit alleging that the state had failed to do so for several years.

The state lost the lawsuit and was ordered to fully fund the back pay, including inflation increases to compensate for the changing value of the dollar. However, both sides continue to disagree on what the actual amount of the settlement ought to be. In order to avoid further litigation, the state and the districts agreed to enter mediation in an attempt to settle these issues. However, observers believe the difference between the amounts estimated by each side could be insurmountable, as they are more than $150 million apart as mediation begins in earnest. No job actions or strikes are expected as a result of this disagreement, though further litigation is certainly possible.