Jackson says tax reform is key to school reform issue

Monday, November 24, 2003

As the debates over education reform twist and turn almost daily, new plans are constantly emerging.

With the Jan. 1 deadline approaching, there are at least five proposals coming from state lawmakers, and the governor's own reform plan is evolving as he tries to gather legislative support before the upcoming special session.

Other reform packages are being pushed by the public-driven Save Our Schools organization, school administrators, educational experts and others.

The plans are many and varied, and local Rep. Phil Jackson (R-Carroll County) is one of the leading lawmakers in the thick of the battle.

Jackson was appointed to the school reform team as a member of the technology and school facilities committees, and is also a member of the House education committee.

He has been working on school reform, visiting school sites to assess needs for new facilities, and working in Little Rock almost weekly in dozens of meetings, while the Legislature is awaiting the governor's call for a special session in December.

While many in the reform debate are suggesting a sales tax to solve the problem, and the governor fights for his school consolidation plans, Jackson is opposed to both, for several reasons.

The fiscally conservative Jackson seems to be more concerned about how to pay for any reform package than he is about which plan will emerge from the pack.

Jackson is suggesting that the matter could be solved without a major new sales tax.

"If we are to achieve real education reform, total tax reform must be addressed as well," Jackson emphasized.

He said in an interview last week that the reforms available are many, but he is focused on closing tax loopholes, where, for instance, large corporations take profitable trademarked items to other states that do not charge corporate income tax.

An example to the above, he said, is "the guy who buys the recreational vehicle and then gets it licensed in Oregon," where there is no tax on such vehicles.

"The corporations are the biggest users of these loopholes, but there are many others which can be cut."

Jackson said he believes tax reform could save the state $100 million a year to use for schools, and he has said in the past that state government downsizing, and restructuring for more efficiency, could save millions more.

Also, he's not a fan of the governor's current consolidation plan, and rural educators such as those in Carroll County and across the state are also against consolidation, and most rural legislators are in the same anti-consolidation camp.

Closing a small high school and sending students to a larger school "is completely inefficient," Jackson said. "You'll have empty classrooms on one campus, and you'll be building more classrooms on another," he said.

The Arkansas Supreme Court drew the legal line last November, ruling that the entire state school system was unconstitutional because of "unfair" distribution" of $1.7 billion a year in state general revenue and $1 billion in local property taxes to all school districts.

That order, Jackson explained, means that the problem must be addressed because the state constitution requires that all students have a legal guarantee of a "general, suitable and efficient" education, interpreted by lawmakers and educational experts to mean an "adequate and equal" education.

All agree that the ruling is a huge order, but one of the biggest kickers is that the court also said the total of $2.7 billion is not enough money for the state and its taxpayers to meet the demand.

The court implied in simple terms that it is time to stoke the fires of educational reform, and the state is discovering that there isn't enough fuel in the woodpile to stoke much ---- except, perhaps, a taxpayer revolt.

When Carroll County went to the voters this month to ask for a one-cent local sales tax to save the local government from painful service and job cuts, part of the reason for the sound defeat the voters gave to the proposal was that they are taxed enough already, and many believed they would see another tax coming down the line to pay for the school reform mandate.

But Jackson, who served as county judge here for a decade before winning his seat in the state House of Representatives, believes that there are ways to reform the school system without a major new tax, and the reason he is against the governor's plan to consolidate school districts is because it is based on a"arbitrary" student enrollment numbers.

Gov. Mike Huckabee believes his plan to create fewer districts, and therefore lower administrative and building costs, is the best way to meet the court's orders.

But Jackson said, "Many of the news articles and discussions have focused on school consolidation, with rural legislators often being portrayed as giving in to local school superintendents whose only motivation is saving their particular school. Like many legislators, I have spent considerable time meeting with local school administrators and teachers. Based on that research, I feel that there will be some school consolidation, but that consolidation must be based on measurable performance and an efficiency model that is balanced," not just on the size of a school's enrollment

"For example," Jackson said, "the state shouldn't determine that rural schools (such as those in Carroll County) are less efficient than large schools when transportation is in the formula. When an urban (large city) school only transports perhaps 20 percent of its students and the rural school buses (up to) 90 percent, the transportation costs would not be decreased as a result of consolidation ---- actually there would be a significant increase.

"I also feel that any school, large or small, must meet a stringent performance test which includes all curriculum offerings. An urban school that does not meet the standards should not be treated any less harsh than a rural school that is failing. To me, it would make little sense to take a school that didn't meet a certain student enrollment number, but meets both the efficiency and performance standards, and consolidate those students with a large school which is failing in both categories. That type of forced consolidation would not produce the desired results."

Jackson explained that some Carroll County students would surely face increased hours on the bus, and said, "I think the schools in our districts can meet the test standards and all the course offerings on an annual basis. I just don't see any need for consolidation here."

Berryville School District is the only one, so far, in Carroll County that would be exempt from high-school consolidation because of its large number of students, but Eureka Springs, Green Forest and Alpena would be vulnerable to consolidation under the governor's and several other plans.

But Berryville could have to absorb Green Forest or Eureka students, and Berryville is already full and in need of more classroom space. Alpena could be absorbed in Boone County, or Eureka could even be forced to merge in Berryville or Madison County. No one has the answer yet.

Testing for the past few years has consistently shown that local schools are scoring well or at least on course when it comes to meeting state and national standards, though they are not doing quite as well as students in many other states. But they are scoring "adequately," and in some cases students are doing exceptionally well.

Jackson explained that the court's ruling, called the Lake View decision because that is the school that won the case in the Supreme Court when it proved it wasn't being funded as well as other districts, contains two key issues.

The issues are whether the state's current system offers equitable education among all school districts, and whether the funding for that system is adequate.

"The Supreme Court said the education system was unconstitutional under both counts," Jackson said.

He said the Legislature over the years has tried "time and again" to improve the system.

"Most recently, in 1996, voters approved a constitutional amendment setting a minimum of 25 mils in property taxes (for maintenance and operation) in all school districts.

"Money raised locally through property taxes is spent locally," he said.

For example, of the more than $9.3 million in local real estate and personal property taxes collected in Carroll County in 2002, 70 percent of the money went to local schools, while 24 percent went to run county government. The rest went to cities and other agencies.

Jackson said, "A major contributing factor to our funding problems (state-wide) is the disparity in land values among the public school districts. A tax of one mil in West Memphis raises much less money than one mil in Northwest Arkansas."

Amendment 74 set up a system by which the state would provide additional general revenues to those poorer districts, but that didn't satisfy the court in the Lake View decision.

Among the other problems cited by the court were:

  • Low teacher salaries (among the lowest in the nation).

  • Poor test scores, also among the lowest in the nation (but some schools both small and large performed better than the national average).

  • Dilapidated and structurally poor school buildings. (Jackson said the court did not address the shortage of buildings in areas that are experiencing population growth. "Addressing this issue will be just as costly as maintenance," he said.)

  • Big disparities in what various districts offer to students. ("I feel that some schools will be able to offer the core curriculum on an annual basis by block scheduling, sharing teaching and more efficient use of modern technology, such as interactive distance learning via computer," Jackson said.)

  • Arkansas ranks 50th in the nation in school spending. ("Even though Arkansas ranks 50th in per-student spending, we are in the top 10 percent of states when the study includes (average) personal income in the formula," he said.)

    To tie this all together, Jackson said, the court cited three elements for an adequate school system: the state must clearly specify its expectations of students; the state must have an effective accountability system; and the state must provide adequate funding to meet the two above elements.

    "The equally important issue of financing an approved plan will be challenging," Jackson said. "District 93 (which includes Carroll County) borders Missouri, so I am extremely concerned about the ability of local businesses to compete with our neighbors to the north (if) we increase our sales tax. If Arkansas utilized a sales tax to fund the entire education reform plan, we would rank near the top in sales taxes."

    Jackson said he is firm in his belief that, "We must close loopholes and broaden the tax base before we ever consider a sales tax. Myself and a few other legislators are in the process of drafting legislation that could result in approximately $100 million in revenue. We are also re-evaluating potential savings opportunities.

    "If we are to achieve real education reform, total tax reform must be addressed as well."

    He said there will be some difficult challenges which must be overcome during a legislative special session.

    "But the goal is clear," Jackson said. "We must provide the best educational opportunities to our students as possible."

    With all the different reform plans being drafted and floated around while the legislature isn't even in session yet, clearly the planners are not yet close to a meeting of the minds.

    But when a Supreme Court makes such a ruling, the order will be carried out, no matter how any expert or lawmaker or governor says it must be done.

    To meet the court's demand, all the educational, legal, and political minds must agree on a plan by Jan. 1, and that plan must be acceptable to the court, and defensible in any court.

    Huckabee said that he may call the special session for Dec. 8, but he has also been reluctant to make the call, perhaps because he's not getting as much support from legislators, yet, as he had hoped.

    Huckabee's plan includes a lot more than consolidation. It also includes teacher salary increases, teacher bonuses tied to school performance, combining several state educational departments to save money, and more standardized testing, among other things.

    Other legislators are working on plans that include a wide variety of issues, from consolidation of districts with fewer than 500 students from Kindergarten through 12th grade, regardless of whether they meet standards; to other plans such as cutting preschools, and a host of other options.

    The blue-ribbon panel of educational consultants that was paid to offer a reform package early this year did not emphasize consolidation, but recommended reducing student-teacher ratios from 20:1 to 15:1; $45 million to pay teachers for five additional days of work; $30 million bonuses for teachers that would be tied to student performance; and a 15 percent increase in teacher salaries. Few of the legislative leaders with plans have been able to come up with cost estimates yet, but it is estimated Huckabee's plan will cost an additional $362 million in its first year.

    The legislative Joint Committee on Educational Adequacy has recommended an $847 million per year increase in school funding. If the special session produces a plan all can agree on, the state doesn't have to implement it by Jan. 1, but it must be a plan acceptable to the court.

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