LITTLE ROCK — The state Supreme Court dismissed the Eureka Springs Carnegie Library’s challenge to Carroll County’s tax collections Thursday, ruling that the library should have brought its suit in county court rather than circuit court.
The library had argued that an 1883 law creating two judicial districts in Carroll County also required that any tax revenue only be spent in the district in which it was raised.
Right now, the roughly $500,000 to $700,000 generated by a 2-mill ad valorem tax is split three ways between the Eureka Springs library and public libraries in Berryville and Green Forest.
Eureka Springs has the only library in the county’s Western Judicial District, and it argues that under the law, it should get all the tax proceeds collected in that district, and the other two libraries should split the rest.
Act 74 of 1883 states that “all revenue accruing to the county of Carroll from the sale of forfeited lands of the state, and county, liquor and ferry license, and from all other sources whatsoever, shall be used for the exclusive benefit of the District in which such revenue may arise.”
The Carroll County Circuit Court ruled that the law just created two judicial districts and was referring to judicial revenue. But if it did require the library tax to be distributed only in the judicial district in which it was collected, the circuit court ruled that would be unconstitutional.
The library said the county was unlawfully diverting library tax funds and sought damages for all years in which the taxes had been split three ways and an injunction requiring the county to stop dividing the tax revenue that way.
The Supreme Court ruled that the question involved a county tax and should have been brought in county court instead of the Carroll County Circuit Court.
Article 7, Section 28 of the Arkansas Constitution states that county courts shall have “exclusive original jurisdiction” over all matters relating to county taxes. Arkansas Code Annotated 14-14-1105 also states that county taxes are to be considered by county courts.
The decision was unanimous, but Justice Paul Danielson did not participate.
Tim Parker, an attorney for the library, said he had cited cases in which the court has said county courts do not have exclusive jurisdiction over county tax cases.
Parker said he will likely try again in county court.
At the Supreme Court, the case is 11-784, Carnegie Public Library of Eureka Springs, Eureka Springs Library Board, Lucilla Garrett and David Zimmerman, v. Carroll County, Arkansas; the Carroll County Quorum Court; Sam Barr, County Judge; The Carroll County Library Board, Bill Brown, President; the Berryville Public Library and the Green Forest Public Library.
Arkansas, Pages 11 on 03/30/2012