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Published in Print: June 6, 2001, as Arkansas School Finance System Overturned

Arkansas School Finance System Overturned

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In a ruling that Arkansas officials intend to challenge, a judge has struck down the state's formula for distributing money to schools, saying it is not adequate or fair to poorer districts.

"The governor hopes we can get it turned over on an appeal," Jim Harris, a spokesman for Gov. Mike Huckabee, a Republican, said last week. "The governor has been in favor of improving education, but he just wants to make sure this ruling is correct."

The state has 30 days to appeal the May 25 decision by Pulaski County Chancellor Collins Kilgore. In his trial-level decision in the state chancery court, the judge declared the state's school funding formula unconstitutional for the third time in less than 20 years and directed the legislature to fix the problem. Mr. Harris said the state would appeal to the Arkansas Supreme Court.

Collins Kilgore

Chancellor Kilgore said the state had done little to fix the disparity in resources between the richest and poorest school districts since the state supreme court declared the system unconstitutional in 1983.

"Not much has changed ... except that 19 classes have graduated from our high schools; practically a generation," the judge wrote in his opinion in the case, Lake View School District v. Mike Huckabee. The current system, which distributes money on a per-pupil basis, does not consider that the poorer districts need additional help, he added.

For example, the current system is violating the state constitution by not providing equal buildings in all of its school districts, the judge said. He also cited statistics in which Arkansas ranks near the bottom in some national comparisons in such areas as student performance and teacher pay.

"Too many of our children are leaving school for a life of deprivation," he wrote. "No problem we face as a state needs more immediate attention."

Adequacy and Equity

The decision stems from a 1992 class action filed by the Lake View school district in eastern Arkansas that claimed the way the state financed its 310 school districts was unconstitutional because it provided inadequate funding levels. In 1994, a judge essentially agreed.

In response, the next year, the legislature replaced the old funding system. But the Lake View district argued in court hearings last fall that the changes made by the legislature still did not create a system that provided adequate funding for schools to meet state standards. The districts of Rogers and Bentonville intervened as plaintiffs in the latest chapter of the case.

Because the case was based on the legal argument that the state's system is unconstitutionally inadequate, the lawyer for two of the school districts said he was surprised by Chancellor Kilgore's finding that it created unacceptable disparities between richer and poorer districts.

"The judge felt if it is inadequate, then it is also unequal," said David Matthews, a lawyer based in Lowell, Ark., who represented the Rogers and Bentonville school districts. "It verifies what most of us have intuitively known: We have not funded education to the fullest. Maybe now we will spend what it takes to adequately fund education."

Charles Knox, the assistant director of the Arkansas Association of Educational Administrators, based in Little Rock, also said he was surprised that the system was declared inequitable.

"We felt we were equitable in revenue per child," Mr. Knox said. "But how it was spent was the concern for the judge."

Tax Hikes Predicted

Education experts during the trial placed the price tag of the needed improvements at between $400 million and $900 million, a sum that they predicted would likely require tax increases.

Gov. Mike Huckabee

"I'm assuming they'd have to look at some new property tax, sales tax, or something like that for revenue," Mr. Knox said. "It's going to be so complicated, so agonizing, and so tumultuous."

Rep. M. Olin Cook, a Democrat, said he agrees the state should appeal the decision, if for nothing else than clarification on what needs to be changed in the formula. He said a tax hike would be inevitable if the costs amount to what the experts predict.

"Of course, if we have to fund at that level, a tax hike of some kind would have to happen" said Mr. Cook, the chairman of the House education committee. "I hope the state prevails in its appeal."

The judge did not set a dollar figure for the extra spending that would be required to remedy the problems he cited. But he did award $9.3 million in fees to the lawyers who brought the lawsuit.

Gov. Huckabee has taken steps to improve education, Mr. Harris said, including winning legislative approval this spring of a plan to provide all certified teachers in the state with raises of $3,000 over the next two years.

Nevertheless, the state is in the process of setting up a 25-member commission to look at how education could be improved and to make recommendations by the 2003 legislative session, Mr. Harris said. He said that the panel was in the works before the court decision, but that the job of the panel would be all the more important if the state lost its appeal.

If Arkansas follows the pattern that has emerged in similar school funding cases around the country, state officials may be in for disappointment. Plaintiffs prevailed in about two-thirds of the more than 25 major, high-court rulings that addressed state school finance cases between 1989 and 1999, according to Michael A. Rebell, who heads a New York advocacy group that won a court ruling in January striking down that state's finance system as unfair to students in New York City.

Vol. 20, Issue 39, Pages 14,20

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