Arkansas School Funding Re-Emerges as Issue (AP Analysis)

by Andrew DeMillo, The Associated Press  on Sunday, Dec. 2, 2012 5:03 pm  

The state Supreme Court's ruling on Thursday throws a new element of uncertainty into a contentious legislative session where lawmakers planned to wrangle over the state's Medicaid program and adjust to a new Republican majority. (Photo by Dustin Nevill)

LITTLE ROCK, Ark. (AP) — The Lake View school funding case is like the ultimate horror movie monster. Try as you might, you just can't kill it.

Twenty years after the first filing in the lawsuit that ultimately transformed the way Arkansas funds its schools — and five years after it appeared to finally be over — the sequel is now in the works. A sharply divided state Supreme Court decided last week that school districts that collect more in property taxes than the state's per-student funding amount can keep the excess money — drawing warnings that it may upend reforms enacted to end the long-running case and reviving a debate that most state leaders believed was settled.

It also throws a new element of uncertainty into a contentious legislative session where lawmakers planned to wrangle over the state's Medicaid program and adjust to a new Republican majority.

Financially, the court's 4-3 ruling won't make a major difference. Only six of Arkansas' 239 school districts collected more in property taxes under the required 25 mills than the per-student funding amount set by the state. But the court's decision that those collections aren't state revenues showed just how raw the emotions are from a case that seemed to have ended five years ago.

Three dissenting justices — including two of the key voices on the court during Lake View — painted the ruling as a step backward from the reforms the state has enacted over the years. The Supreme Court ruled in 2007 that that Arkansas had adequately and equitably funded its school districts.

"A signal has now been sent that the constitutional principles fixed in those cases are not inviolate and, indeed, can be watered down and marginalized," Justice Robert Brown wrote.

Or, as Special Justice George Ellis put it: "It is as if the majority has entered a time machine."

The four judges who ruled in favor of the two districts that objected to the state withholding the excess money pushed back against that criticism, noting that schools throughout the state are receiving the same per-student foundation funding amount from the state.

"No one in the instant case alleges any inadequacy or inequality in the education being received by Arkansas students today, but for the dissenters' machinations," Justice Paul Danielson wrote in the majority opinion.

But the instant case isn't the problem, critics of this ruling say. The problem is that it opens the door for others to challenge the way Arkansas pays to educate 468,000 public school students in a system built on the idea of equity among rich and poor school districts. They also argue that it could prompt lawmakers in the future to tinker with a system that has kept the state out of court for several years.

Last week's ruling is the latest wrinkle in a school funding fight that goes back nearly 30 years. After the state Supreme Court found the school system unconstitutional in 1983, the Legislature devised a system in which money followed the child. A new school funding formula based on per-student expenditures was established in 1996 after the now-defunct Lake View School District and others sued the state.

The court ruled in 2002 that school districts were underfunded and that the money spent was distributed unevenly. Legislators approved a number of reforms in 2003 and 2004 that, after a review by court-appointed masters, appeared fine, according to the court.



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