No. 3 News Story of the Year: Eureka wins school millage funds suit against state
EUREKA SPRINGS -- The county's No. 3 News Story of the Year came in late November, with good news for the Eureka Springs School District.
On Nov. 29, it was announced the Arkansas Supreme Court had declared the district the winner in a lawsuit with the Arkansas Department of Education over $824,914 in contested school millage funds.
The lawsuit stems back to the 2010-2011 school year, when the school district's millage income exceeded the $6,023 allocated to each student by the state, meaning the school district had brought in more money than the state says it needs to education the number of students enrolled. The state said at the time the school district must pay back the "overpayment" funds and would have to do so every year as long as Eureka remains a "property-rich" district.
At issue for Eureka Springs, however, is the fact that while the district's property valuations may be considered "wealthy," in actual fact, 77 percent of the elementary school children in the district qualify for the Free and Reduced Lunch program, i.e., poverty level.
In February 2011, then-state Rep. Bryan King, R-Berryville, filed House Bill 1435. Sponsored by nine other legislators from around the state, the bill was intended to keep the excess funds in the districts that generate them, as is stated in the enacting state code language in 1999.
"It isn't as if Eureka Springs is the land of milk and honey, despite the extra funding," King said after the Supreme Court handed down its ruling. "Having said that, the school has just built a multi-million-dollar high school on their own, without state funding. And it's certainly not as if the excess money would help neighboring Green Forest or Berryville in any way. The school deserves to keep its own money."
State Attorney General Dustin McDaniel, on behalf of the Department of Education, has appealed the decision back to the Supreme Court, asking it to reconsider. No decision has been announced yet on that appeal request.
Citing Dupree v. Alma School District in 1983, McDaniel has argued that "basing educational funding upon disparities in tax revenues between property-rich and property-poor school districts is inconsistent with the constitutional requirements of equal protection ... and of adequacy and equity in education" and said that such disparities "widen the gap."
He said what the court defined as the "main issue" was that "when all counties are assessed at the proper level, the gap will still exist between the poor and wealthy districts and the mandate of the constitution will remain unfulfilled."
He did not define or make reference to a definition of "the proper level," however.
In February, the ADE informed the Eureka Springs School District it would not approve this year's school budget, because the district refused to remove the contested funds from its income line.
In an exclusive interview with CCN, Eureka Springs School District Superintendent Curtis Turner expressed relief at the decision.
"The court affirmed we had won on every point of our lawsuit," Turner said. "Obviously we feel local money should stay local. We feel we are entitled to these funds. We don't get state funding anyway, other than some specific restricted entitlement programs, so yes, we feel whatever we generate should be used to operate our schools here locally."
Turner said he had been "floating in the air" from the good news. "It's so premature that everything hasn't soaked in yet," he said. "It's a good feeling. Had we lost the lawsuit and been forced to return the money, it would have made things pretty thin here. A tough situation. Fortunately that didn't happen."