Grocery Tax Cut Idea Puts Focus on Little Rock Schools Desegregation Case (AP Analysis)

by Andrew DeMillo, The Associated Press  on Sunday, Dec. 9, 2012 10:14 am  

The Arkansas State Capitol in Little Rock. (Photo by Stephanie Dunn)

LITTLE ROCK — The path to ending Arkansas' long-running and costly desegregation payments to three Little Rock-area school districts has a new light at the end of the tunnel — tax cuts. The only problem is no one knows if the path is getting any shorter.

Gov. Mike Beebe's proposal to cut all but a fraction of the remaining sales tax on groceries depends primarily on the state ending roughly $70 million in payments it makes to the three school districts. It also shows how confident Beebe and other state leaders are that the payments — long derided by legislators — are coming to an end.

"We don't know when the court is going to end this, but we do know it's going to end," Beebe said last month. "All the indications are it's going to end. That money will be freed up. Let's give it back to the taxpayers in the form of getting rid of the rest of the grocery tax."

Arkansas is required by a 1989 settlement to fund magnet schools, transfers among districts and other programs to support desegregation and keep a racial balance in the Little Rock, North Little Rock and Pulaski County school districts. Beebe's proposal follows years of grumbling from legislators that the money for the three districts are no longer necessary and could go toward other needs in the state's budget.

His proposal also shows just how dependent lawmakers will be on the federal court to stop the flow of money to the districts.

Hopes were raised about an end to the payments in 2010, when a federal judge ruled that most of the payments to the districts should end. They were extinguished a year later, when the 8th U.S. Circuit Court of Appeals said the judge was wrong to cut off the payments since the state had not formally requested their end.

Attorney General Dustin McDaniel in March asked a judge to end the payments and has requested that a hearing be scheduled on the matter. McDaniel, a Democrat running for governor in 2014, declined to weigh in on Beebe's proposal to base his tax cut on the possibility of the desegregation funds ending.

"I'm going to handle the litigation, which may still be going on when I'm out of office. I hope not," McDaniel said. "I really, really want to have this in a much more definite posture when I hand over the keys to this office to my successor. That's where my focus will be, not on the policy of what this General Assembly or a future General Assembly might do with the money."

McDaniel has often vented frustration about the payments and once made an offer to the districts to phase out the funding. He says there are hopeful signs that an end is near, pointing to rulings finding the Little Rock and North Little Rock districts unitary, or substantially desegregated. Pulaski County schools have asked to be found unitary as well.

McDaniel has long sought a definitive date for when the settlement will end, but said that doesn't mean the money will be cut off immediately.

"Will it be over by the time I leave office such that the state's no longer paying these three districts any money? Probably not," McDaniel said. "Can it be over in such a way that we have a date certain and a dollar amount certain for a time in the future so that everybody can go on with educating our kids and being our partners rather than adversaries in court? I would very much like to see that."

It's not clear how much Beebe's proposal — if approved by a Republican-controlled Legislature that has its eye on other tax cuts — could spur a conclusion to the case. Beebe said his desire wasn't to influence the courts or the districts with a proposal that could win public support. Instead, he said it's the only way he could find to phase out the tax in a budget where the state's Medicaid program faces cuts to its services for the elderly and disabled.

"The idea behind this was I wanted to do what I said I was going to do," Beebe said. "I can't in good conscience lop it off right now with the Medicaid shortfall. I can't in good conscience do it the way we have done it."

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, rewritten, broadcast or distributed.) 

 

 

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