Sharp division in court ruling raises new question about school funding
By Roy Ockert Jr.
Dec. 4, 2012
Once again Arkansas’ method of funding its public schools has become muddled. That’s because of a ruling last week by an Arkansas Supreme Court not only sharply divided but which seemed almost bitter in its division.
The majority rules, in this case by a 4-3 vote, but when the minority includes the chief justice and another member of the court also widely respected for his judicial wisdom, we should take notice.
The case, styled as Kimbrell v. McCleskey and others, involved a dispute between the state Department of Education and two school districts which wanted to keep certain revenue raised through district property taxes. Now that may seem like an understandable position, but it runs counter to the state’s practice and, according to the three justices on the losing side, contrary to state law.
The majority, in a decision written by Justice Paul E. Danielson, ruled that the Eureka Springs and Fountain Lake school districts, are entitled to $825,000 and $1.4 million, respectively, that the DOE declined to return to them for the 2010-11 school year. Those are certainly not insignificant numbers.
Chief Justice James Hannah, Associate Justice Robert L. Brown and special Justice George D. Ellis each wrote separate dissenting opinions that said, in effect, the majority’s decision threatens to revert Arkansas’ public school funding system to its chaotic and unconstitutional status prior to the long-running Lake View case that apparently changed things for the better.
Most remarkable about the written opinions was how the various justices sharply criticized each other and their conclusions.
Ellis said, “It is as if the majority has entered a time machine.”
“By ruling as it has, a majority of this court has re-entered a ... world where
the wealth of a school district determines how well a child will be educated,” Brown wrote.
“The majority nullifies 10 years of difficult and painstaking work diligently undertaken by the General Assembly, the Department of Education, the attorney general and the governor, to provide this state with a constitutional school-funding system,” Hannah wrote. “The state’s carefully crafted constitutional system of state-funded public education is obliterated by the majority’s decision.”
Danielson devoted an unusual amount of space to the dissenters’ arguments. “The dissenters’ protestations to our decision today are positively confounding and have absolutely no basis in the law,” he wrote, concluding that the state Legislature could fix the problem without a “time machine.”
The problem is that the state — meaning the high court, DOE, Legislature, various public officials and even we the people — have been trying to fix this system at least since the tiny Lake View district of Phillips County first challenged the constitutionality of the system in 1992. The district won and was rewarded by being legislated out of existence, a victim of having too few students.
We’ve enjoyed a period of relative tranquility since the Supreme Court in 2007 declared that various changes in the system had made it educationally adequate and substantially equitable, as the state Constitution requires.
The bone of contention in the latest case is over revenue raised under the 25-mill property tax that must be imposed in every district for maintenance and operation of the schools. We set that as a minimum with a constitutional amendment in 1996.
Generally, we consider that “rich” school districts like Jonesboro, the ones that have lots of business and industry, raise plenty of revenue with this tax, while “poorer” ones Like Valley View, which is mostly residential, and Westside, mostly rural, don’t.
The truth is that almost no school districts raise enough money on that 25 mills to provide an adequate education — which now by law is defined by the Legislature in terms of dollars per student. For 2010-11 that amount was $6,023.
The law provides that the state must make up the difference through what is called Minimum Foundation Aid. Property tax revenue is collected by county officials, then remitted to the state and distributed back to the districts. Those blessed with huge property-tax-paying entities like utility plants actually can lose money.
But in Eureka Springs, Fountain Lake and four other districts that year the 25 mills raised more than $6,023 per student, and those two challenged the practice, contending that it’s a local tax and therefore the revenue it produces should remain local.
Until this decision a school district wanting to raise more than the minimum had only one choice — pass a tax on top of the 25 mills — and Jonesboro did that in 2010, adding four-tenths of a mill. (The tax for debt service is separate, and all of its revenue stays in the district.)
The issue the Supreme Court now throws back to the Legislature is this: Does the system, as interpreted by the majority, now authorize the state to discriminate in favor of wealthier districts? The three dissenting justices argue strongly that it does, therefore threatening the constitutionality of the system.
Whether that’s true remains to be seen, but the foundation of our school funding system will continue to plague us. Property taxes are confusing and inherently unequal from district to district and county to county, and yet we use them as the basis for financing our public schools.
Roy Ockert is editor emeritus of The Jonesboro Sun. He may be reached by e-mail at royo@suddenlink.net.