LITTLE ROCK — The state Supreme Court said Thursday that it won’t reconsider its Nov. 29 ruling that prevents state officials from redistributing property-tax revenue from wealthier school districts to poorer ones.
State officials, including Gov. Mike Beebe and Attorney General Dustin McDaniel, have denounced the decision, warning that it could lead to the unraveling of the school-funding system.
In the Fountain Lake case, the court said that property taxes raised by school districts are not state funds and can’t be taken under current law. But it noted that lawmakers could change the law if they were unhappy with the decision.
So far, legislators say, there has been little discussion of the court’s ruling during the 2013 session.
Gene Sayre, who represented the Fountain Lake and Eureka Springs school districts in the case, said he was pleased with the outcome.
“I think they made the right decision to start with when they correctly interpreted the constitution and the statutes,” Sayre said.
McDaniel petitioned the court Dec. 17 for a rehearing of its 4-3 Fountain Lake decision.
But the court Thursday denied the rehearing request in a 4-3 vote, with Justices Paul Danielson, Donald Corbin, Courtney Hudson Goodson and Karen Baker making up the majority.
Chief Justice Jim Hannah, Justice Cliff Hoofman and Special Justice George “Bucky” Ellis would have granted a rehearing, according to a court order.
Justice Jo Hart, who joined the court earlier this month, did not participate.
The court did not explain why it had denied the rehearing request.
In an interview, McDaniel said the court’s decision Thursday left his questions unanswered about equity in public education funding.He said the November ruling could cause neighboring districts to have large funding disparities.
“We have made real strides in our public education [system] and have done a good job of staying out of litigation because in Lake View the court gave us very clear direction,” McDaniel said.
In that 2002 case, the court ruled that Arkansas’ funding of the public-school system was unconstitutionally inadequate and inequitable, pressing the Legislature to respond.
According to Amendment 74 to the Arkansas Constitution, every school district in Arkansas is required to levy a property tax of at least 25 mills for maintenance and operation. In most districts, the property-tax revenue is augmented with state funds to provide school districts with equal “foundation funding.”
Those funds are supposed to help ensure that all of Arkansas’ school districts receive enough money to provide an adequate education for all schoolchildren. That dollar figure, in the 2012-13 school year, is $6,267 per student.
But a handful of school districts collect more than $6,267 per student in property taxes through the mandated 25-mill property tax. State officials wanted to take that money away. The court stopped them from doing so.
“Foundation funding” is the largest source of revenue for most Arkansas school districts, but there are several other revenue sources for schools. As a result, overall per-student spending varies - sometimes dramatically - from district to district.
Critics of the ruling say the Fountain Lake decision could lead to greater disparities.
Asked to comment, a spokesman for the Department of Education deferred to the attorney general’s office.
Beebe said he had concerns with the court’s ruling from the outset and continued to be wary of the implications of the court’s decision.
“We’ll see if people start chipping away at Lake View,” Beebe said.
Later in the day, Beebe said there were no more judicial steps to take in the case. And he said filing new legislation would just rehash what had already been decided.
“The big issue is what have they done to the amendment, what have they done to Lake View, what have they done to the intent of the people, and you can’t fix that with a statute,” Beebe said.
Senate Education Committee Chairman Johnny Key, R-Mountain Home, said he would not support legislation to allow the state to keep the excess funds, but said he would defend the Legislature’s school-funding decisions that followed Lake View.
“Anything that would chip away at what we worked so hard to get to after Lake View, I am going to fight tooth and nail,” Key said.
Key said there was no need for a legislative fix after the court’s decision in the Fountain Lake case.
“Based on the ruling and based on my reading of the Lake View decision, I don’t see that as being critical to funding of education in Arkansas. No district is going to lose money,” he said.
Senate President Pro Tempore Michael Lamoureux, R-Russellville, said there was still a lot of confusion on the meaning of the ruling and how it would affect the state.
“Some people think it is a disaster. Some people think it is limited to specific districts and it is not as big a deal, so I think there still is probably more education that needs to be done on what the effect of the ruling is,” Lamoureux said.
House Education Committee Chairman James McLean, D-Batesville, said he doesn’t think any legislator currently has a plan to address the court’s decision.
“We have a very delicate balance in terms of how we fund our schools, and I think anything that occurs to disrupt that can really upset the apple cart completely all the way back to Lake View, so I think we need to take a wait and-see approach, see how this all shakes out. I think we need to have a lot of discussion before we start talking about filing bills to try to correct this,” McLean said.
House Education Committee Vice Chairman Ann Clemmer, R-Benton, said she agrees with McLean. She said she hasn’t heard anyone propose a change to the school-funding system.
“I also would like to just point out that our schools don’t really get equal funding as it is because excess funding goes to schools with poverty designations, and I’m not saying that is inappropriate, but to assume that every school gets the same amount of money per student is not really the case as it is,” Clemmer said.
Front Section, Pages 1 on 01/18/2013