The Pulaski County Quorum Court approved Tuesday night appropriating $2.7 million from Little Rock for the refunding of illegally collected property taxes in 2008 that benefited the Central Arkansas Library System.
The funds represent the amount overcollected in 2008 that taxpayers were eligible to claim for a refund.
The actual overpayment was about $3.2 million, but a Pulaski County Circuit Court ruling determined that refunds less than $5 were a wash because of the costs of administering them. Taxpayers will receive their claims, adding interest amounts yet to be determined but subtracting administrative costs.
What isn't spent repaying claims will be returned to the library system, Pulaski County Attorney Amanda Mitchell said.
Justices of the peace approved the appropriation by a vote of 15-0 with no discussion.
In 2007, voters approved a 1.5-mill property tax increase for improvement to the library system that was to go into effect in 2009.
But property tax bills in Little Rock included the increase in 2008, and taxes were collected at that rate from May 14, 2008, until Dec. 31, 2008, according to a 2009 lawsuit from Little Rock residents. The suit followed Arkansas Democrat-Gazette reporting that raised questions about the timing of the tax collection.
Little Rock set aside the $2.7 million after the suit was filed.
Per Circuit Judge Tim Fox's order earlier this year, Little Rock residents who paid the 1.5-mill increase in 2008 had until May 4 to return a postcard with a claim.
A mill is one-tenth of 1 cent. To determine how much is collected in tax dollars, 20 percent of a property's assessed value is multiplied by the millage rate.
Taxpayers made 8,193 claims of more than $5, which totaled $588,547.07.
Plaintiff attorneys -- Gene Sayre, who died in March, and Christopher Brockett -- and the defense attorneys, Little Rock City Attorney Tom Carpenter and Greg Campbell for Central Arkansas Library System, will receive $487,549.52.
Other costs, such as postage and notices in the Democrat-Gazette, will raise the cost of administering the refunds to about $535,000, Mitchell said.
Claims on more than 11,000 pieces of property were submitted, but many were below the $5 threshold, Mitchell said.
Others never bothered to file claims either because they wanted the money to go back to the library system or because they did not meet the $5 threshold.
Some people overpaid by less than $1, with several overpaying by less than a quarter.
Businesses made more significant claims, such as Stephens Inc., which filed a claim for $16,728.31.
Owners of about 70,000 pieces of property were eligible for the refund. About 10,000 notices were returned for a lack of a current address.
Metro on 06/24/2015