Court Opinion

ID: 5115222
Source: CourtListenerOpinion
Date Created: 2021-10-02 19:37:03.566293+00
Date Added: 2024-06-11T08:21:49.538583
License: Public Domain

ROBERT L. BROWN, Justice, dissenting. Today’s decision takes us back twenty-nine years to a time when a student’s public education was based on the property wealth of that |26student’s school district. Under that system, students in wealthier school districts fared much better with respect to the educational opportunities available to them, because the property wealth of those districts generated more tax revenue for school operations. This court expressly held in a landmark decision in 1983 that a school-funding system based on property wealth was inherently discriminatory and violated the Arkansas Constitution. DuPree v. Alma Sch. Dist. No. 30, 279 Ark. 340, 651 S.W.2d 90 (1983). In the later Lake View cases, we endorsed and reiterated the DuPree position.1 Those decisions were beacons in this state for the basic precepts of equality. Now, a majority of this court has eroded this fundamental, constitutional principle premised on economic equality and returned this court to a pre-DuPree standard where property wealth can be used by the State of Arkansas to benefit some school districts more than others. I cannot countenance such a sea change in our constitutional law. Under the majority’s decision, the State, by state appropriation, may now allocate URT funds to two school districts in excess of the foundation-funding amounts, which are the state-funding limits established by the General Assembly for all school districts in the state. This overpayment in state funding for these two school districts is based solely on the property wealth of those districts, and the State in the form of the Arkansas Department of ^Education (ADE), according to the majority, cannot recoup the overpayments. Not only is today’s decision out of sync with DuPree and the Lake View cases, it etches in stone a discriminatory policy based on wealth 'that is directly at odds with amendment 74, state statutes, and this court’s case law. Under the majority’s reasoning, if URT funds resulted in education funding that was two or three times that paid to other school districts in the state because of property wealth, that would pass constitutional muster. That, of course, is manifestly wrong. No matter how much the majority would like to believe it, URT funds that are sent to the State and then reallocated by the State Treasurer back to the school districts do not simply “pass' through” the Treasurer’s office. Those funds are returned to the school districts under the authority of a specific state appropriation, a fact the majority opinion never acknowledges.2 Accordingly, this is vastly different from a situation where school districts levy more taxes for school operations- by local ordinance above and beyond what the URT provides, as referenced in Lake View II. Why? Because the State is directly involved in the allocation of funds to the school districts and cannot discriminate against poorer school districts based on property wealth. A school district, on the other hand, has every right to levy a tax for additional revenue to benefit its school. Far from being a distinction without a difference, as the majority puts it, a state appropriation is simply not the same thing as a millage increase levied by a school district. |2RThere is no disagreement on this point by the ADE and the Attorney General. See Op. Ark. .Att’y Gen. No. 094 (2010). Both agree that the School Districts in the instant case are woefully out of constitutional step in seeking to retain URT revenues that exceed the prescribed foundation-funding amounts. This court’s majority, however, has cast that aside and has decided that discriminatory payouts are now the new normal. This, without a doubt, opens a Pandora’s box of practices favoring the state’s wealthier school districts with excessive and disparate URT payouts. The other rationales used to justify the majority’s decision are based on false reasoning. For example, the majority discounts, the plain and simple language in the School District Taxes Code that provides: (B) No portion of the revenues from the uniform rate of tax shall be retained by the State but shall be distributed back tó the school district from which the revenues were received or to other school districts pursuant to subsection (c) of this section. Ark.Code Ann. § 26-80-101(b)(l)(B) (Supp.2009) (emphasis added). This corresponds with amendment 74, which also provides: “The net revenues from the uniform rate of tax shall be remitted to the State Treasurer and distributed by the state to the school districts as provided by law.” Ark. Const, art. 14, § 3 (emphasis added). Clearly, this language authorizes the State to distribute URT funds to “school districts” and does not limit distribution of overpayments to the originating school district. I agree with the majority that the referenced “subsection c” in section 26-80-101(b)(1)(B) does not specifically address what is to be done with excess URT funds, but amendment 74 expressly says that URT funds must be distributed “as provided by law.” And 129the law of Arkansas is clear that educational funding must not be distributed by the State on a discriminatory basis. See Ark. Const, art. 14, § 1 & art. 2, §§ 2, 3, 18; Lake View II, 358 Ark. at 137, 189 S.W.3d at 1; Lake View I, 351 Ark. at 31, 91 S.W.3d at 472; DuPree, 279 Ark. at 340, 651 S.W.2d at 90. The majority opinion either overlooks this or discounts the constitutional law on this point throughout the opinion. Next, the majority misreads amendment 74 and concludes that it authorizes the State to discriminate in URT funding in favor of wealthier school districts. The plain language of this court’s opinion in Lake View II and in amendment 74, however, make it abundantly clear that school districts may only raise additional funds above the URT by local ordinance to enhance their educational systems. Amendment 74 specifically reads, “In addition to the uniform rate of .tax ... school districts are authorized to levy, by a vote of the qualified electors respectively thereof, an annual ad valorem property tax on the assessed value of taxable real, personal, and utility property for the maintenance and operation of schools.” Ark. Const, art. 14, § 3(c)(1) (emphasis added). Hence, any variation for increased school funding above foundation-funding limits must be the result of a local tax levied in addition to the URT funds raised under amendment 74. Amendment 74 manifestly provides school districts with the flexibility to raise more money locally for the maintenance and operation of their schools, but this is done annually in local school elections — not through the URT. The majority goes on to conclude that URT funds distributed by the State in excess of foundation funding for all other school districts is not an overpayment. Specifically, the opinion reads, “it cannot be said that the excess funds constituted an overpayment.” I |sodisagree. Excess URT funds over and above what is owed to a school district in foundation funding is most certainly an overpayment. Moreover, there is authority for the ADE to withhold overpayments from subsequent state funding or request a refund -from the school district for the overpayment. See Ark.Code Ann. § 6-20-2806 (Supp. 2011). The majority, nevertheless, maintains that section 6-20-2306 refers only to overpayments “under any appropriation authorized by this subchapter,” which, it contends, does not embrace URT overpay-ments. But that too is incorrect. The subchapter involved is the Public School Funding Act of 2003, codified at Ark.Code Ann. §§ 6-20-2301 to -2307, which specifically includes the URT in its formula for setting foundation-funding aid. With respect to whether the URT is a state tax, the majority writes that the URT is not a state tax or a local tax but “a breed of [its] own” and “one of a kind.” This “neither fish nor fowl” description of the URT will be news to both the school districts and the ADE. And the conclusion flies in the face of both amendment 74 and our case law. When it reached its decision that the URT is a state tax, the circuit court relied on City of Fayetteville v. Washington County, in which this court said, “The 25 mills under Amendment 74 ... is a tax adopted by the collective voters of the state, who levied the uniform rate of 25 mills as a matter of constitutional law when they approved Amendment 74.” 369 Ark. 455, 473, 255 S.W.3d 844, 856-57 (2007). Prior to City of Fayette-ville, this court noted that the URT was established by, and levied under, amendment 74: Adopted by the people of Arkansas at the 1996 general election, Amendment 74 of the Arkansas Constitution 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. Beebe v. Fountain Lake Sch. Dist., 365 Ark. 536, 545-46, 231 S.W.3d 628, 636 (2006) (relying on Ark. Const, art. 14, § 3(b)(1)). Not only has this court squarely, found that the URT is established and levied under amendment 74 as a uniform tax by the Arkansas people, but the language of amendment 74 supports this court’s interpretation: (b)(1) There is established a uniform rate of ad valorem property tax of twenty-five (25) mills to be levied on the assessed value of all taxable real, personal, and utility, property in the state to be used solely for maintenance and operation of the schools. [[Image here]] (4) The General Assembly may by law propose an increase or decrease in the uniform rate of tax and submit the question to the electors of the state at the next general election. [[Image here]] (c)(1) In addition to the uniform rate of tax provided in subsection (b), school districts are authorized to levy, by a vote of the qualified electors respectively thereof, an annual ad valorem property tax on the assessed value of taxable real, personal, and utility property for the maintenance and operation of' schools and the retirement of indebtedness. Ark. Const, art. 14, § 3(b)(1), (b)(2), (c)(1) (emphasis added). Added to this is the fact that when URT funds are returned to the school districts by the State Treasurer, this is done by state appropriation, as has already been noted. As a result, for the General Assembly to propose an increase in the URT, it must be submitted “to the electors of the state,” not to a local school district. Were the URT not a state tax, local school districts would have the power to increase the URT for their particular districts above the 25 mills established in amendment 74 as a uniform tax. That would shred lS2any notion of equality and strike at the very heart of uniformity. The majority makes a passing reference to amendment 47, which forecloses a state ad valorem tax. Although this argument was not specifically addressed by the circuit court in its order, our law has been clear for more than eighty years that a subsequent amendment to the Arkansas Constitution like amendment 74 necessarily amends a previous provision like amendment 47. See Chesshir v. Copeland, 182 Ark. 425, 32 S.W.2d 301 (1930) (holding that where there is an inconsistency between an earlier amendment to the Arkansas Constitution and a later amendment, the last amendment, being the last expression of the sovereign will of the people, will prevail as an implied repeal of the former to the extent they conflict); Lybrand v. Wafford, 174 Ark. 298, 296 S.W. 729 (1927) (noting the well-founded principle that the last amendment to a constitution adopted by the people must control over earlier provisions or amendments to that constitution where there is irreconcilable conflict). In this case, amendment 74 carves out an exception to amendment 47 as “a uniform rate of ad valorem property tax of twenty-five (25) mills to be levied on the assessed value of all taxable real, personal, and utility property in the state.” Ark. Const, art. 14, § 3. By ruling as it has, a majority of this court has reentered a pre-DuPree world where the wealth of a school district determines how well a child will be educated, and the State allocates funding accordingly. Certainly, the Lake View cases dealt with adequacy in education, but Lake View I and II in particular underscored the constitutional mandate that funding be equal, harking back to the fundamental principles set forth in DuPree. I have no disagreement with the majority’s statement that foundation funding sets a 13Sbenchmark for equality in education. Where the majority runs far afield, however, is in failing to recognize that unlimited URT funding above foundation-funding amounts that is appropriated by the state and based on a school district’s property wealth violates the whole notion of equality. Without question, when our constitution' requires that URT revenues be distributed “as provided by law,” that embraces the state constitution and not merely statutory law. To regress on the progress Arkansas has made in state education on the twin grounds of equality and adequacy — based on this court’s decisions in DuPree and the Lake View cases — is disturbing and a sad commentary. A signal has now been sent that the constitutional principles fixed in those cases are not inviolate and, indeed, can be watered down and marginalized. For all of these reasons, I respectfully dissent. HANNAH, C.J., and Special Justice GEORGE D. ELLIS join this dissent".  . Lake View Sch. Dist. No. 25 of Phillips Cnty. v. Huckabee (Lake View IV), 370 Ark. 139, 257 S.W.3d 879 (2007); Lake View Sch. Dist. No. 25 of Phillips Cnty. v. Huckabee (Lake View III), 364 Ark. 398, 220 S.W.3d 645 (2005); Lake View Sch. Dist. No. 25 of Phillips Cnty. v. Huckabee (Lake View II), 358 Ark. 137, 189 S.W.3d 1 (2004); Lake View Sch. Dist. No. 25 of Phillips Cnty. v. Huckabee (Lake View I), 351 Ark. 31, 91 S.W.3d 472 (2002); Lake View Sch. Dist. No. 25 of Phillips Cnty. v. Huckabee, 340 Ark. 481, 10 S.W.3d 892 (2000); Tucker v. Lake View Sch. Dist. No. 25 of Phillips Cnty., 323 Ark. 693, 917 S.W.2d 530 (1996).   . See Act of Feb. 12, 2009, No. 124, 2009 Ark. Acts 489 (appropriation for distribution of Amendment 74 funds for fiscal year 2009-2010).