In 2000, a similar ballot initiative was passed to allow annual increases to education funding consistent with inflation. However, inflationary funding was not upheld in practice during the recession, and a lawsuit was filed against the state, claiming that the failure to fund inflation was in violation of the Voter Protection Act.

A settlement was reached in 2015 that would allow the Legislature to implement a new funding plan (now known as Prop. 123) to address the state’s evolving economic conditions and meet critical education funding requirements.

Funds for Prop. 123 would be allocated from the State Land Trust, a mechanism that generates revenue through the sale and use of land in Arizona.

With the passage of Prop. 123, $3.5 billion was provided to K-12 education within the first ten years of its enactment, including an additional $625 million in funds over the same period. Inflation adjustments outlined in the original 2000 legislation were also reinstated to maintain the constitutionally-required funding levels.