LITTLE ROCK — An effort to reverse a state Supreme Court ruling on a tax increase for Little Rock libraries threatens to delay the repayment of millions of dollars to city taxpayers, the lawyer whose side won the case has told the court.
The Central Arkansas Library System and its director, Bobby Roberts, have asked the court to reconsider its unanimous Dec. 17 ruling, which said a 2007 tax increase was applied one year too soon and that the money must be repaid.
A notice of reconsideration is seldom granted by the high court and often isn’t sought in cases in which the ruling was unanimous.
The library filed its request on Dec. 31, contending that the court’s decision is inconsistent both with earlier decisions and the state motto, a Latin phrase that translates to “The People Rule.” But if that request is not disposed of quickly, the repayment method favored by the taxpayers who sued over the timing could be in jeopardy, their lawyer told the court in a Tuesday request for a quick decision.
Even if the court does not change its mind, the library system is hoping the court will let it off the hook and apply the decision to future cases.
“It’s a legitimate request to ask the court to reconsider,” Roberts said Wednesday, adding that the filing is not intended to delay any repayment, which he said would likely take several months in any case. “At some point, if we don’t get some relief in the court or something, we’re going to end up paying it.”
He added: “But I’m not in any hurry to get it paid back.”
The library system, now faced with the prospect of cutting hours and staff salaries, has a meeting set for tonight for patrons to weigh in on the potential budget impact of the court loss. If it loses its second effort before the Supreme Court, it will have to scrape together $1.5 million. Already, it has proposed cutting the Aerospace Library in east Little Rock. The public meeting is scheduled for 6:30 p.m. at the Main Library’s Darragh Center in Little Rock.
Roberts said any mandate to repay taxpayers within a few months could mean even more cuts to the system. That issue, should the Supreme Court maintain its December ruling, would be settled in Pulaski County Circuit Court.
“It’s a lot more complicated than just handing money back to people,” he said. “I don’t think the intent of the court would be to bankrupt a library.”
Planning for two new Little Rock libraries and an expansion of other services, the library system sought a 2007 special election to ask city taxpayers to raise their property taxes. The request passed with 65 percent of the vote, and the overall increase amounted to about $3.2 million a year, paid only by Little Rock taxpayers.
But the Pulaski County Quorum Court had set property-tax rates before that special election. And because county leaders did not approve a change in the rates before the deadline required by law, the Supreme Court ruled that the overall 1.5-mill increase should not have applied until the 2008 tax year.
Now, the group of taxpayers who sued hope to get the money as a credit applied to the Little Rock property-tax bills set to go out in March. The refund could amount to more than $4 million, divided among those who paid 2007 city property taxes. The tax has subsequently been levied legally.
The lawsuit was filed against the library system and the county and city, all of which had roles in administering the election and the tax increase, after a story in the Arkansas Democrat-Gazette explored whether the tax was properly applied. Though county officials were involved in the legal processes, the tax applied only to property in Little Rock.
Eugene Sayre, the lawyer representing the taxpayers group, said that the tax-credit plan is the best way to ensure the refund gets paid to the most taxpayers. He said having the county send a check to taxpayers would be expensive. He added that if taxpayers are required to take the initiative, some might not bother, given the size of the increase compared with overall tax bills, and those that do could encounter administrative hurdles.
“You’re not going to get many people to ask for $45,” he said, noting in that case the money would wind up back with the library system. “We’re not trying to be obstructive in any manner, but to work within the system.”
In its effort to reverse the court ruling, the library system is contending that the court is now treating a legally created tax as an “illegal exaction” merely because of a “ministerial shortcoming in the assessment and collection of the tax.”
Its lawyers also wrote in their Dec. 31 filing that the decision unfairly overlooks the role of the voters who approved the tax increase. They wrote, “The Court’s decision is contrary to the Arkansas state motto: Regnant Populus, which means, ‘the people rule.’”
Had Roberts and the library not sought a reconsideration, the Supreme Court would have officially ordered the case last week back to circuit court to hash out the refund issue, Sayre wrote in a Tuesday court filing. The refund issue would then have likely been settled in time to arrange for the credit on this year’s tax bills, he wrote.
But without the court moving unusually quickly on the library’s request, the timeline wouldn’t be favorable to a credit, he wrote. Sayre added in an interview, however, that the court could force the county to delay the mailing of the tax bills in order to squeeze in the credit.
Arkansas, Pages 9 on 01/14/2010