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Remedy for Aid Glitch in Ark. Pondered

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The Arkansas state board of education has been misallocating state education funds to districts for the past 10 years, and likely will pay more than $3 million this year to districts that have missed out on funds as a result, state officials say.

Legislators, who were not scheduled to convene until next year, are meeting this week to investigate the misappropriation. They are also likely to hold a special session sometime before the middle of next month to correct the legislative glitch that led to the department's practice of ignoring a provision of the funding formula.

A lawyer, who is also a state representative, discovered the practice while researching the funding system on behalf of some of the districts.

Although districts that were illegally denied funds probably will get the funds for the remainder of the year, districts that gained funds likely will be held harmless.

Behind the Provision

The controversy centers on one sentence in the state's 1983 school-finance law that effectively removes districts' incentives to increase their millage rates because it reduces state funding to districts when their tax revenues increase.

Legislators had designed the provision to compensate for differences between counties that had been reassessed and those that had not. The effect of the provision changed, however, after all of the counties had been reassessed and property values adjusted.

To counter the provision, the state education department "left out that part of local wealth that was the result of the millage increase'' when allocating state education funds, said Robert Shaver, the department's associate director for finance and administration.

The department contends that it was following the intent, if not the letter, of the law.

But Tony Minicozzi, an aide to the Senate and House Education committees, calls the misapplication "misguided and arrogant.''

Mr. Minicozzi said the education department should have brought the problem to lawmakers' attention. Because of the misapplication, he said, some wealthier districts received more than their share of funds, while some poorer, rural districts got shortchanged.

Kellar Noggle, the executive director of the Arkansas Association of Educational Administrators, said the uproar has "totally divided'' districts. "We've never seen anything like it,'' he added.

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