A divided Arkansas Supreme Court has ruled in a school district funding case that could throw the landmark Lake View decision out the window and roil public education funding in Arkansas.

On Thursday, Justice Paul Danielson wrote for the majority opinion that a case (Kimbrell v. McCleskey) involving the collection of property taxes in excess of state requirements for school funding had been improperly administered in accordance with the state constitution.

The crux of the complaint – brought by representatives from the Eureka Springs and Fountain Lake school districts – suggested that additional monies collected through property taxes above a state minimum for school districts should not be redistributed to other school districts, but should be kept in the district from which it was collected.

Danielson and a majority of justices agreed.

Amendment 74 to the state constitution established the uniform rate of taxation of 25 mills for each school district to be levied on the assessed value of property and “to be used solely for the maintenance and operation of the schools.” Those revenues are sent to the state, which then redistributes funds back to the school districts and then supplements that funding with additional state general revenue to ensure that all school districts receive a uniform “foundation” amount of per-student funding.

In the case of these districts, their revenue from the uniform rate of tax exceeded the per-pupil “foundation” amount, and the state claimed that the excess funds must be returned to the state for distribution to other, less-wealthy school districts. State officials argued that the return of these excess dollars was required to maintain an “equitable” school funding formula under the 2009 Lake View decision and an earlier case upon which the Lake View decision relied.

But in dissenting opinions, Justices Jim Hannah and Robert Brown and Special Justice George Ellis disagreed with today's majority ruling.

“The General Assembly’s school-funding system was approved by this court as constitutional,” said Hannah in reference to the long-running Lake View case. “The majority decision is contrary to law and precedent.”

Hannah added, “The majority nullifies ten 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.  The state’s carefully crafted constitutional system of state-funded public education is obliterated by the majority’s decision.”

“Today’s decision takes us back 29 years to a time when a student’s public education was based on the property wealth of that student’s school district,” said Justice Brown. “Under that system, students in wealthier school districts fared much better with respect to the educational opportunities available to them, because the property wealth of those districts generated more tax revenue for school operations. This court expressly held in a landmark decision in 1983 that a school-funding system based on property wealth was inherently discriminatory and violated the Arkansas Constitution.”

Gov. Mike Beebe was scheduled to speak to reporters later today on the topic.

Said one former legislator instrumental in the Lake View decision and the legislative actions taken by the General Assembly in its wake, “It's an equity issue and equity just walked out the door.”

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Roby Brock
Roby Brock is the Editor-in-Chief and Host of Talk Business & Politics. He can be reached by e-mail at Roby@TalkBusiness.net. Follow him on Twitter: @RobyBrock.