Opinion ID: 1756151
Heading Depth: 3
Heading Rank: 2

Heading: Uniform Rate of Taxation Amendment 74

Text: Amendment 74 established the uniform rate of taxation of twenty-five mills for each school district to be levied on the assessed value of property and to be used solely for the maintenance and operation of the schools. The revenues collected are sent to the State, and the State later distributes the total funds back to the school district. The twenty-five mills uniform rate of taxation and the net revenues it generates are elements of the formula used to determine the amount of state foundation aid. The report says: That amount [foundation aid] is computed as `the difference between the foundation funding amount [which is set at $5,400 per student multiplied by the average daily membership of the school district for the previous school year] . . . and the sum of ninety-eight percent (98%) of the uniform rate of tax multiplied by the property assessment of the school district plus seventy-five percent (75%) of miscellaneous funds of the school district.' See Ark.Code Ann. § 6-20-2305(a)(1) (Supp.2005). The 2% difference between 98% and 100% in § 6-20-2305(a)(1) is said to be the cost of collecting the local tax, although, according to testimony before the Masters, that cost can exceed the two percent figure. In addition, the actual collection of local revenues can be lower than 98% of the uniform rate of tax multiplied by the property assessment for the school district. The uniform rate of taxation is estimated to reflect an increase of $39 million in the 2005-2006 school year from that of the 2004-2005 school year. This potential increase in local revenues results in a corresponding reduction in state foundation aid needed to make up the $5,400 per student.