Student Well-Being

Financial Dispute

By Vaishali Honawar — May 03, 2005 2 min read
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An Arkansas lawmaker says the state will not ask 10 school districts to return the $11 million they were overpaid in state aid in the 2004-05 school year.

But that’s not the story.

Sen. Jim Argue, a Democrat, contends that the districts had used a federal free and reduced-price lunch formula to count all of their students as eligible for state poverty funding, regardless of family income.

The provision allowed the 10 districts to take advantage of a state funding formula passed last year that gave millions of dollars more to districts with large numbers of students in the subsidized-lunch program.

Mr. Argue said that, thanks to the loophole, a district that claimed all its students were participating in the program could get nearly $1,000 more in state aid per child.

He spearheaded budget changes in the 2005 legislative session to reduce state aid for some districts under a new formula and close the loophole.

Arkansas has been grappling with how to meet its education funding needs since the state supreme court ruled in 2002 that its system of financing schools was unconstitutional.

Budget estimates showed that $13 million more than anticipated would have gone to schools in the 10 districts in the 2005-06 school year and $22 million in the following year unless the loophole was closed.

Lee Vent, the superintendent of the 4,000–student Forrest City school district, which expects to receive $2.6 million less next year under the new formula, said he believed the district received the additional funds from the state “in the good spirit of the [supreme court] decision because the 10 original school districts are in higher-poverty areas.”

He said it was unfair that his district, which has a budget of $24 million, and others should suffer as a result of the state’s budget crunch. He said that besides the $2.6 million lost because of the change in the funding formula, the district would lose $2.5 million more as a result of other unfunded mandates in the budget.

“The budget crunch was not caused by us,” he said. “We will welcome additional monies to implement programs, to try to reach an equal playing field.”

As a result of the reduction in state aid, Mr. Vent said, the school district on April 25 joined 45 other low-income districts in petitioning the Arkansas Supreme Court to reopen the Lake View School District v. Huckabee school finance case because, they say, the legislature failed to fund them adequately this year under changes adopted in fiscal 2004.


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