State’s millage case a rehash, brief says

LITTLE ROCK — Two school districts that recently won a funding case against the state asked the Arkansas Supreme Court on Friday to reject the state’s request for a rehearing.

Eugene Sayre of Little Rock, the attorney representing the two districts, argued in a brief that the state did not cite any specific errors in the court’s Nov. 29 decision. The court ruled that the state cannot force wealthier school districts to surrender property-tax revenue to poor districts.

Sayre, who said he filed the brief Friday, also argued that two judges whom Gov. Mike Beebe has appointed to the bench should disqualify themselves from considering the state’s petition for rehearing.

In mid-December, Attorney General Dustin McDaniel asked the court to reconsider its decision in favor of the Fountain Lake and Eureka Springs school districts.

In his brief, McDaniel asked the Supreme Court whether the state must still provide all schools with equal funding, now that it has been prevented from taking wealthy school districts’ property-tax revenue.

The court won’t take up whether to reconsider the case until it reconvenes in January. The court rarely rehears a case.

Spokesman Aaron Sadler said Friday evening that the attorney general’s office had received the brief and would review it before commenting.

All Arkansas school districts are required by Amendment 74 to the Arkansas Constitution to levy a property tax of at least 25 mills for maintenance and operation.

This property-tax money, along with supplemental state funds, helps to provide all school districts with what the state calls “foundation funding.” The goal is to ensure that all districts receive enough money to provide students with an adequate education.

In 2012-13, each district received $6,267 per pupil in foundation funding.

In most districts, the 25 mills raise less than $6,267 per student, and state funds are allocated to make up the difference.

But in a handful of districts, the 25 mills produce more than the mandated funding.

It’s the excess millage revenue that the state tried to keep and give to other districts. The court said such redistribution is not legal.

The state had argued that it was required to provide equal funding to all school districts. But Fountain Lake and Eureka Springs argued in a court filing before Christmas that education funding has never been equal because districts receive tens of millions of dollars of state and federal “categorical funding” above the amount the state considers necessary to provide an adequate education.

The court also found that the 25 mills is a “special tax,” not a state tax.

The court held that Amendment 47 prevents the state from levying ad valorem taxes, including property taxes. The attorney general argues that Amendment 74, passed later, supersedes it.

Sayre wrote in the brief that the attorney general’s office had reargued its position instead of showing the court how it erred.

Sayre also stated that Special Justice George Ellis and Court of Appeals Judge Cliff Hoofman, who joins the bench at the beginning of the year, should recuse themselves from the case. Beebe, who has criticized the court’s Nov. 29 ruling, made both appointments.

Sayre wrote that by not recusing themselves, the justices would have the “appearance” of impropriety.