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Ark. Voters Consider Finance Fix Amid Full Court Pressure

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In 1994, an Arkansas judge gave the state's lawmakers two years to come up with a more equitable school finance plan. But it will be the state's voters who decide next week if the new plan goes into effect.

The final chapter in Arkansas' 2-year-old finance overhaul could end if voters approve a constitutional amendment that would allow the state to redistribute local property taxes from wealthy districts to poorer ones.

Amendment 1's supporters--including Gov. Mike Huckabee, the state's largest teachers' union, and the state chamber of commerce--see no organized opposition, but worry Arkansans may find the school finance plan too complex to cast a vote for.

"Initial polling shows those who've decided are two-to-one in favor of it," Sen. Mike Beebe said last week. "The problem is there is a huge group--52 to 53 percent--who haven't decided because they don't understand it."

If passed, the amendment would have little net effect because it would essentially endorse a plan that lawmakers passed last year to reduce the inequities in what districts around the state spend on students.

But that legislation is only a short-term fix, Amendment 1 supporters say. Fluctuations in property values across the state will inevitably change how much districts raise from property taxes, eventually creating more inequities.

Under Amendment 1, districts where property values produce enough funds to create an inequity would have to kick some of their local property tax revenue into a statewide pool for redistribution. Only two of Arkansas' 311 school districts will find themselves in that situation this year, Mr. Beebe said.

Court Order Feared

But if Amendment 1 doesn't pass, Mr. Beebe, a Democrat, fears the court will write its own solution. Hearings are set for mid-November to determine if the state has done enough to reduce its inequities.

"The court said, 'I give you two years to fix this problem, and if you don't fix this, then I'm going to,'" Mr. Beebe said. "I don't know how a court would fix it. One thing it could do is mandate a tax increase or order consolidating the schools."

The clock started ticking back in November 1994, when Pulaski County Chancellor Annabelle Clinton Imber ruled the state's school-funding practices caused inequities that were unconstitutional. ("Judge Gives Ark. Lawmakers 2 Years To Fix Formula," Nov. 23, 1994.)

A contentious debate over the remedy dominated the legislature's 1995 session, with lawmakers eventually approving a new finance formula that directed more money to poor districts.

The legislature prodded districts by adding a 10 percent surcharge to state income taxes in districts that didn't voluntarily raise their local tax rates for school maintenance and operation to 25 mills. All but seven of the state's districts now levy at 25 mills or more.

Amendment 1 would mandate the 25-mill minimum throughout the state and allow for redistribution of local property taxes before any district could spend significantly more per pupil than other districts.

Although no formal campaign has been mounted against the proposal, some Arkansans are grumbling about the prospect of state involvement in local property taxes.

"The amendment creates for the first time a new statewide tax for education, and we have not had a new tax in 50 years," said Lamar Pettus, a Fayetteville lawyer and a member of the city's school board.

Hot-Button Topic

One of the amendment's most vocal opponents, Mr. Pettus argues the measure would effectively hold back districts where voters want to spend more on their schools.

"We're doing away with local control and local districts' ability to pay more for the best educational possibilities," he said.

Mr. Huckabee, a Republican, has led the call for Amendment 1 since Democratic Gov. Jim Guy Tucker, who signed the 1995 finance bill, resigned.

The new governor planned to rally support in a helicopter-stop campaign throughout the state this week.

Campaigners are trying to cut through the complicated finance issue by hitting the hot-button topic of court control, a phrase that brings to mind Arkansas schools' tumultuous history with court-ordered desegregation.

"One message, of course, is that if you like the way the courts have run the Little Rock district, then don't vote for Amendment 1," said Rex Nelson, a spokesman for the governor.

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