Arkansas Supreme Court: Local Grant System Unconstitutional

Arkansas Supreme Court: Local Grant System Unconstitutional

LITTLE ROCK — A system of grants Arkansas lawmakers used to fund local projects violated a constitutional requirement that budget measures distinctly state their purpose, the state Supreme Court ruled Thursday, but justices declined to say whether the grants also defied a ban on strictly local legislation.

Justices overturned a lower court ruling in favor of $2.9 million that was awarded to the Central Arkansas Planning and Development District, one of eight regional districts appropriated surplus money to pay for various projects around Arkansas in 2015. The Supreme Court sided with a former state representative who said the constitution requires details of how the money would be spent.

"The plain language of (Arkansas' constitution) requires the purpose of the appropriation to be distinctly stated in the bill itself," Justice Robin Wynne wrote in the ruling.

More: Read the entire ruling.

Former Rep. Mike Wilson, who challenged the measures, was also behind a lawsuit that prompted the court in 2006 to bar the Legislature from directly funding local projects around the state with surplus money. Wilson had also argued the grants violated the state constitution banning legislation that singles out a city or county, but justices on Thursday did not rule on that issue.

Wilson said the grant system was an end-run around the previous rulings on local projects and said the lack of details on the spending provided no accountability.

"If no specific purpose is contained in an appropriation, then the taxpayers don't have any yardstick to measure the result by," he said.

The court sent the case back to Pulaski County Circuit Court and did not say what should happen with the money.

A spokesman for Attorney General Leslie Rutledge said she'll work with the governor and lawmakers to ensure the ruling is implemented.

Justice Shawn Womack, a former state legislator, disagreed and said the bills provided details on how the money would be spent.

"When looking at the entire act, the two sections can be read together to suggest that the General Assembly appropriated funds to planning and development districts to be distributed as grants to finance the cost of its individual projects," Womack wrote in a dissent.

The ruling comes as the Legislature's handling of local project money faces scrutiny from federal investigators.

Former state Sen. Jon Woods and two others have pleaded not guilty to corruption charges after prosecutors said they participated in a scheme under which Woods allegedly directed money to Ecclesia College in return for kickbacks. Republican former state Rep. Micah Neal pleaded guilty in January to one count of fraud related to the case. Separately, federal court documents show that a search warrant seeking material from Sen. Jake Files involves $46,500 in money for work at a Fort Smith sports complex. Files has not been charged with a crime and says he is cooperating with law enforcement.

Earlier this year, Gov. Asa Hutchinson and lawmakers agreed to not direct any surplus money toward legislative projects. Instead, the money went toward a rainy day fund that could be tapped for emergency needs.

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