LITTLE ROCK — Attorney General Dustin McDaniel asked the Arkansas Supreme Court on Monday whether the state still must provide all schools with equal funding, now that it’s been prevented from taking wealthy school districts’ property-tax revenue.
McDaniel wants the court to reconsider its Nov. 29 decision in favor of the Fountain Lake and Eureka Springs school districts.
The court won’t take action on McDaniel’s request until it reconvenes in January, court spokesman Stephanie Harris said.
All Arkansas school districts are required, by Amendment 74 to the Arkansas Constitution, to levy a property tax of at least 25 mills for maintenance and operation. This property-tax money, along with supplemental state funds,helps to provide all school districts with what the state calls “foundation funding.” The goal is to ensure that all districts receive enough money to provide students with an adequate education.
In 2012-13, each district receives $6,267 per pupil in foundation funding.
In most districts, the 25 mills raise less than $6,267 per student, and state funds are allocated to make up the difference.
But, in a handful of districts, the 25 mills produce more than $6,267 per student.
It’s the millage revenue in excess of $6,267 that the state tried to keep. The court said such a redistribution is not legal.
The state had argued that it was required by state law to provide equal funding to all school districts. But Fountain Lake and Eureka Springs argued in a court filing Friday that education funding has never been equal because districts receive tens of millions of dollars of state and federal “categorical funding” above the amount the state considers necessary to provide an adequate education.
Categorical funding is directed to “socioeconomically disadvantaged districts,” according to the 2012 adequacy study produced by the Legislature.
The average Arkansas school district received $8,215.84 per student from categorical and foundation funding in Fiscal Year 2011, according to study.
When all revenue sources are counted, Arkansas education spending reached $11,056 per student for the 2010-2011 school year, according to the Office for Education Policy at the University of Arkansas.
The attorney general’s brief does not address the two districts’ latest filing.
The districts have until Dec. 26 to respond to McDaniel’s motion. Gene Sayre, the attorney for the districts, said he will likely file something by the end of the week.
“It seems to me to be the same argument, maybe a little bit more intense, they made before,” Sayre said. “We’ll discuss it this week. My clients feel that this is the correct decision.”
In his petition for rehearing, the attorney general states that “until the decision in this case, education funding provided by the state has been subject to the two controls of adequacy and equity ... with adequacy meaning that the state had to identify the amount of money necessary to fund an adequate education ... and equity meaning that substantial differences in funding for school districts must have a rational basis.”
In its opinion the court’s majority wrote that “the court has made it abundantly clear that it is not concerned solely with whether revenues are doled out equally to the districts.”
The attorney general’s brief questions whether the court has now determined that as long as districts receive an adequate amount of funding, they’ve also received an equitable amount.
The attorney general’s petition also asked the court to clarify what it meant when it called the state-mandated 25 mills a special tax. It states that the tax was approved by legislators and then by voters statewide. The revenue is remitted to the state, and the state constitution defines how the money is to be spent.
The court held that Constitutional Amendment 47 prevents the state from levying ad valorem taxes, including property taxes. The attorney general argues that Amendment 74, passed later, supersedes it.
Gov. Mike Beebe also sought to weigh in on the case Monday, asking the court to allow him to file an amicus (or Friend of the Court) brief, when a concerned party presents information for the court to consider.
“It’s a big serious issue and frankly the court got it wrong,” he told reporters.
He asked to get involved because of his history with the issue.
Beebe was the lead sponsor of the 1995 constitutional amendment that changed how education is funded in the state. He was attorney general during earlier litigation that led to much of the current funding structure for school districts.
“The ‘big deal’ is that the Court now seems to say that part of our Constitution - the equality provisions of Article 2 - simply no longer apply to the public school funding system,” Beebe’s brief says.
It states that the court misinterpreted the two parts of Amendment 74: the portion allowing for variance in funding, and that the 25 mills do not constitute a state property tax.
“The intent was to establish a new statewide, state property tax and state revenue source that would serve as one of the primary components the state might distribute to meet its requirement to ensure the state had an equitable and adequate school funding system,” Beebe’s brief says.
Sayre said Monday that he had not read the governor’s amicus brief but is aware of his position on the ruling based on what Beebe has said publicly.
“As an attorney, he’s shown a little disrespect for the court by some of his comments,” he said.
Beebe spokesman Matt DeCample said the ruling is too important not to comment on.
“With a topic and a ruling this important, the governor felt it necessary to fully respond and will continue to do so,” he said.
Front Section, Pages 1 on 12/18/2012