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A school bond plan 

Gov. Huckabee may have hatched the worst idea of the year when legislators asked him to budget for a statewide school construction program, but it’s not the time to condemn him. Sure, nothing could be more irresponsible than slashing $80 million a year from the operating aid to school districts in order to finance a school construction bond issue of $1 billion or so. The four justices of the Arkansas Supreme Court who voted in the spring to close the books on the Lake View school case must have rued that poor day’s work when they read that any responsible state official was contemplating undoing the minimal school reforms enacted last winter. The state would immediately and obviously be in violation of the court’s order to provide a suitable and equal education to every child in the state. The state would be back in court before summer and this time on a fast track to a contempt citation. But look at it this way. The governor should have ignored the lawmakers’ request for a budget that included $80 billion of school construction funding, but, since he complied, his plan was hardly more unworkable than any other. The Legislative Council, which asked for the budget, has no better plan to finance the construction from current revenues and won’t have. The fall budget work before legislative sessions is supposed to be based on current law. Governors and legislators never budget for prospective services for which no law exists. In this case, the legislature has enacted no law to finance the construction of schools, and until today no one had a reliable idea about what it would cost. Here is a charitable and fetching way to look at Huckabee’s budget: By substituting school buildings for preschool education and teacher salaries he was illustrating the absurdity, or at least the implausibility, of the legislators’ situation. They expect to pay for the modernization of school facilities, which was mandated by the Supreme Court when it was in its unanimous mood, from current revenues. Carving away $80 million a year from the operating funds for the schools would mean teachers’ salaries would slump again (many districts have not given the raises that were calculated last spring) and the state would renege on its commitment to the court to provide pre-kindergarten programs for all the poor children in the state — a price calculated at $60 million more than the legislature allotted for this year. How better could he have made the point? Roll back health services for children or free a couple thousand prisoners? If the legislature is to comply with the mandate for good school facilities without raising taxes $50 million or so, it will take more ingenuity than it has demonstrated in a while. There is some hope. Sen. Dave Bisbee, who ought to be the Republican candidate for governor in 2006 if the party had any honor, has proposed telescoping the state’s ancient system of assessing and collecting local school taxes from 22 months to 10 months. That would stop tax scofflaws who move before paying the taxes on property they assessed and produce perhaps a few million dollars more a year. Gov. Winthrop Rockefeller wanted to do it 38 years ago but he had to abandon it because of a weird feature of school finance called the 40 percent pullback. School districts can book 40 percent of their base ad valorem revenue in the following year as a receivable to finance current year programs if they need it. It would have required a big one-time appropriation to get into the new program and the state couldn’t afford it. State officials think they can get around this accounting maze. Here is an even more promising idea that suits the state’s pro-business mood. Arkansas amended the Constitution last month to skip the required statewide election to go into debt if the money would benefit a Fortune 500 company. To issue bonds for school buildings and retire them with tax receipts will still require a statewide election. But perhaps by forming a quasi-private corporation to oversee the school-building program, the school facilities would qualify for about $250 billion of bonds under the new law. The capital investment and the job creation would meet the law’s requirement and the long-term benefit for people would far exceed that of an assembly plant. If Mitsubishi or Wal-Mart or even Enron wanted the money, naturally they would get it ahead of school kids. But the schools will never pick up and leave.
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