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Local and special acts still in jeopardy 

Another lawsuit is a possibility.

OZARK PROJECT: State support vetoed.
  • OZARK PROJECT: State support vetoed.

More litigation challenging use of state funds for local projects is possible, according to Mike Wilson of Jacksonville, whose previous lawsuit led the Arkansas Supreme Court to require new procedures for spending state money on such projects.

The legislature’s new arrangements for spending money from the state General Improvement Fund are being closely watched by Wilson, a former state representative, and by Gov. Mike Beebe.

“A lot of people are very much concerned that this method not be used as a subterfuge,” Wilson said.

While mentioning the possibility of a new lawsuit, Wilson also said that he though Beebe had made an effort to keep GIF appropriations within the law. Beebe vetoed six GIF appropriation bills from the recent legislative session.

The General Improvement Fund comes from the interest on state deposits and historically was used for the benefit of state colleges and universities and for capital projects, according to Wilson. In the 2005 legislative session, a new procedure was adopted, under which each legislator was allotted a certain amount of GIF money for projects in his or her district. Wilson filed suit challenging the expenditure of state money for several of these projects, arguing that they violated Amendment 14 of the state Constitution. Adopted by voters in 1926, Amendment 14 says, “The General Assembly shall not pass any local or special act.”

One of the bills targeted by Wilson was Act 1898 of 2005, which appropriated $400,000 to the city of Bigelow (Perry County) for “infrastructure, sewer and streets.” Wilson said there was no legitimate reason to give Bigelow a special appropriation for these purposes while other cities received no such special assistance. The Supreme Court agreed and struck down Act 1898. The legislation was sponsored by Sen. Bob Johnson of Bigelow.

In response to the Supreme Court decision, the 2007 legislature adopted new ways of distributing money from the General Improvement Fund. The House of Representatives mostly abandoned the concept of dividing GIF money among the individual House members, according to Rep. Chris Thyer of Jonesboro, co-chairman of the legislature’s Joint Budget Committee. Instead, the House appropriated money to classes of beneficiaries. A $4 million appropriation was made for all fire departments in the state. Two million dollars went to domestic violence shelters, another $2 million to planning and development districts. That money will be distributed according to existing formulas. The House also gave $100,000 to each state institution of higher learning.

The Senate continued to divide GIF money among individual senators, but changed the way the appropriation bills were written. In some cases, rather than give the money directly to a local project or agency, the appropriation bill channeled the money through a state agency. SB 761, for example, designated $200,000 for “support” of the Riverfront Development Project in Ozark, but channeled the money through the state Department of Economic Development. Wilson said he was curious to see how this idea plays out. Without any direct order from the legislature in the appropriation bill, how could the legislators be sure the state agency would spend the money in the way the legislators intended? On the other hand, a bill that designated GIF money for a specific local project would again run afoul of Amendment 14, he said, unless the project could be shown to have some statewide benefit.

SB 761, by Sen. Ruth Whitaker of Cedarville, says in its title that the money is for the Riverfront Development Project and includes a section that says:

“It is the intent of the General Assembly that any funds disbursed under the authority of the appropriations contained in this act shall be in compliance with the stated reasons for which this act was adopted, as evidenced by the Agency Requests, Executive Recommendations and Legislative Recommendations contained in the budget manuals prepared by the Department of Finance and Administration, letters, or summarized oral testimony in the official minutes of the Arkansas Legislative Council or Joint Budget Committee which relate to its passage and adoption.”

Whether that language would satisfy the Supreme Court is uncertain. SB 761 and similar bills containing similar language haven’t made it that far. They’ve been vetoed by Beebe. In each veto message, he’s said:

“I believe the bill, if enacted, would violate Amendment 14 to our Constitution, which prohibits the passage of local or special acts, particularly in light of the Arkansas Supreme Court’s recent interpretation of Amendment 14 in the case of Wilson v. Weiss … ”

Wilson, who served with Beebe in the legislature, said this was what he expected from Beebe. “I can’t believe the governor would allow money to be routed to special projects if he knew that’s what was happening,” Wilson said. “He’s held pretty tight to what the court said last time.”

The Supreme Court still has more to say. Although the court in December ruled only on the Bigelow appropriation, Wilson’s lawsuit also challenged appropriations for libraries at Jacksonville and Heber Springs, a Boys Club at Jacksonville, and $20,000 to the city of Jacksonville for no specified purpose. The court is expected to rule on those questions soon. That ruling will shed more light on what is permissible, Wilson said.

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