LITTLE ROCK — The Fountain Lake School District is struggling with school property-tax funding on multiple fronts.
The district that straddles Saline and Garland counties is about $35,000 short on its millage collections this year because of an error in rolling back its millage rate.
The school district is also joining the Eureka Springs School District in suing the Arkansas Department of Education in a case filed over an error in determining how much millage collection should be sent back to those districts.
Pulaski County Circuit Judge Tim Fox is scheduled today to hear a motion by the state attorney general’s office to dismiss the school districts’ lawsuit.
Every school district is required to collect 25 mills for operation and maintenance, and send that money to the state. The state then returns funds to school districts under a per-pupil funding formula that ensures every district gets a minimum of funding necessary to provide an adequate education.
In the lawsuit, the state is saying that less money than what was collected from the 25-mill levy should havegone back to the districts, which the state says have smaller student counts and high property taxes.
The districts are suing to keep the full amount of millage and to prevent having to pay back money to taxpayers - $1,387,567 in Fountain Lake’s case - that the department said the districts were overpaid over the past four fiscal years.
The latest problem with millage collection at the Fountain Lake district is a mistake made somewhere between the county clerks and the Arkansas Assessment Coordination Department.
Over the years in the Fountain Lake district, voters have approved increases in the millage rate for construction and other concerns, bringing the rate on the 2010 school elections ballot to 34.8 mills.
Millage rollbacks, or reductions, are required by state law if property values have increased more than 10 percent and the amount of millage returned to a district stands to increase by at least 10 percent.
The state Assessment Coordination Department helped Fountain Lake officials fill out a worksheet todetermine if a rollback from 34.8 mills to 34.7 mills was needed because of an increase in property values.
That determination resulted in a loss of about $35,000 because property values had actually not grown enough to make up the difference.
Fountain Lake School Board President Bob McCleskey, who discovered the error, said he believes that the state should foot the bill.
State Assessment Coordination Department Deputy Director Faye Tate disagrees.
“The funds should have come from taxpayers in those counties, and the taxpayers would be responsible to make them up. The state has no burden to do that and no liability in the mistake because state statute mandates that the county clerks are responsible for those calculations.”
Saline County AttorneyJonathan Greer and Garland County Judge Rick Davis said the counties are negotiating options, including sending out new tax bills.
“In some cases, the cost of the stamp would be more than the additional taxes, and there might be some people who get a bill for 5 cents and choose to ignore it,” Greer said. “That would raise a whole new set of problems.”
Greer said the Saline County Quorum Court’s finance committee will meet tonight to discuss options to make up the county taxpayers’ portion of that $35,000.
Fountain Lake district representatives have suggested that the district would accept what it would cost to mail out the corrected tax bills, which would be roughly $10,000 for each county.
Another idea being discussed is whether it’s legal to add the missing taxes to next year’s bills, Greer and Davis said.
Arkansas, Pages 9 on 09/12/2011