PHOENIX — The Arizona Legislature violated the state constitution’s Gift Clause when it earmarked $15.3 million for the nonprofit foundation that runs the Prescott Frontier Days rodeo, a judge has ruled.
The decision from Maricopa County Superior Court Judge Scott Blaney permanently bars state Treasurer Kimberly Yee from sending the money to the group. He wrote in the new ruling that it was unconstitutional to give the money to the Prescott Frontier Days group because the 2023 appropriation “fails to require any consideration whatsoever in return for the public’s $15.3 million.’’
The money was included in the state budget at the behest of two Republicans who represent the area, Reps. Quang Nguyen of Prescott Valley and Selina Bliss of Prescott.
They intended the foundation to use the money to help kick-start a $40 million plan to repair and renovate major parts of the rodeo grounds at the Yavapai County Fairgrounds. But there was nothing in the appropriation saying that — or any other specifics on how the rodeo group should use the money — and no language laying out how taxpayers benefited from the spending.
The rodeo site dates to 1913, and the current grandstand for what is billed as the “World’s Oldest Rodeo’’ was built in 1933. The foundation wanted to rebuild it and add a host of improvements, including modernized water, sewer and communications infrastructure.
But the money has been sitting in the treasurer’s account since the lawsuit was filed shortly after the Legislature and Gov. Katie Hobbs included it in the state budget passed in 2023. Last year, the Legislature directed it to be returned to the general fund if the state lost the lawsuit.
The suit was filed by two taxpayers who live in Prescott, Howard Mechanic and Ralph Hess, who is a retired Yavapai County Superior Court judge. They charged it violated the Gift Clause because it “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.’’
Mechanic and Hess were represented by Nicholas Ansel, an attorney with the Arizona Center for Law in the Public Interest. Their lawsuit also alleged the earmark violated the constitution’s appropriation clause, which says the main budget bill can only fund state departments.
Blaney said he didn’t even have to consider the appropriations clause argument because the proposed spending clearly violated the Gift Clause — and in two separate ways.
Courts use a two-part test to determine if there is a violation, the judge wrote.
The Prescott rodeo.
First, the spending must serve a public purpose. Second, Arizona government entities can’t give money to anyone or any group if the value the state, city or town gets in return is less than what they pay.
“Indeed, although an expenditure need only fail one prong of the Gift Clause test to constitute a Gift Clause violation, the Rodeo Appropriation fails both prongs,’’ Blaney wrote.
The ruling wasn’t unexpected.
Nguyen and state Sen. Mark Finchem, R-Prescott, have been working this legislative session on competing versions of a measure to sidestep the Gift Clause issue and again earmark the cash for the rodeo grounds renovation. But the proposal has stalled over the same concerns — how to legally appropriate the money.
Nguyen told Capitol Media Services he accepts Blaney’s decision but still wants to try to find a way to get the state to pay for some of the renovations.
“Maybe drafting better language,’’ he said. “Maybe actually being very clear about the fact that we are going to use it for the rodeo grounds to improve the infrastructure, to improve the bathrooms, to improve the parking areas. There are a lot of things. So maybe we need to spell it out.”
But as far as this year, he seemed resigned that it won’t happen.
A new state budget must be enacted before the start of the 2026 fiscal year on July 1. And this year, there’s very little surplus, so finding votes for the rodeo grounds upgrade money will be difficult.
“I think it’s too late,’’ Nguyen said. “We’re talking about a brand new budget. But I’m not bitter. I’m not angry.”
This all came about because the 2023 legislative session saw state coffers flush with cash.
Each of the 60 representatives and 30 senators was given between $20 million and $30 million to allocate as they wished.
Minority Democrats joined with Hobbs to spend most of their part of the surplus on K-12 schools. Some Republicans used theirs to fund a tax rebate for parents.
Bliss and Nguyen, however, did as many other Republicans — used their money for local projects.
