Critics: State Supreme Court Ruling on School Property Tax Goes Against Lake View

by Andrew DeMillo, The Associated Press  on Thursday, Nov. 29, 2012 3:41 pm  

The Arkansas Supreme Court building in Little Rock. (Photo by Dustin Nevill)

A 1996 constitutional amendment approved by voters requires each school district to levy no less than 25 mills of property tax for maintenance and operation of schools. Districts are allowed to levy more than 25 mills. A mill produces $1 for every $1,000 of assessed property value.

The state argued it had the authority to withhold the excess money because it would have given the districts more than the per-student funding it receives from the state each year. The four-justice majority said there was no law that allowed the state to redistribute the funds to other schools.

Gene Sayre, an attorney for the districts, said he was pleased with the ruling. He said the state's method for saying the districts' funding levels were in excess only compared them to per-student funding levels, and not other types of funding the schools receive from the state.

"We're saying that the basis of the attack by the Department of Education is shortsighted because it attacks one factor in the formula and doesn't look at the overall formula for public schools," Sayre said.

Attorney General Dustin McDaniel was reviewing the decision and talking with state officials about its impact, a spokesman said. Beebe said he expected the state to ask the court to reconsider its decision.

Hannah, the chief justice, wrote in the dissent that the majority decision tinkered with the state system that was finally deemed constitutional after years of litigation over whether the state's districts received fair and adequate funding. The state Supreme Court addressed school funding cases in the 1980s, 1990s and 2000s.

"The majority nullifies ten years of difficult and painstaking work diligently undertaken by the General Assembly, the Department of Education, the attorney general, and the governor, to provide this state with a constitutional school-funding system," Hannah wrote. "The state's carefully crafted constitutional system of state-funded public education is obliterated by the majority's decision."

Special Justice George Ellis, who was assigned to the case, wrote in a separate dissenting opinion that "it is as if the majority has entered a time machine."

"Under the majority opinion, we will again have a wealth-driven system of public education which was precisely the problem with our system in the first place," Ellis wrote.

The majority, however, suggested that lawmakers can give the state the power to redistribute the excess funds. The Legislature is set to convene in January.

"Should the General Assembly wish to provide a mechanism or procedure by which excess funds may be distributed to other districts, it is certainly within its purview to do so — no time machine required," Danielson wrote.

Beebe said he didn't know yet if he would ask lawmakers to allow the state to redistribute the excess funds, but said that option showed the threat the court's ruling poses to the state's school reforms.

"The mere fact that he suggests the Legislature can by statute alter the constitutional amendment in a way as substantive and as basic as that illustrates really what I think the danger is with future governors and future legislators that want to change the essence of the constitutional mandate the people passed," Beebe said.

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