Enter the lawyers 

We continue our crusade on tax increment finance districts. Rogers, Fayetteville, Jonesboro and Little Rock are leading the charge to put big chunks of land (some worth a half-million bucks an acre) into TIF districts. When a TIF district is created, increases in property tax in the district go not to the schools for which millage was voted but to aid private development – a hotel in Fayetteville, a mall in Jonesboro, rich folks’ office buildings in Rogers. The school districts don’t care. A 2003 law replaces their TIF loss with state money that otherwise would be distributed to schools statewide. Several legislators would like to close the loopholes, including Sens. Jim Argue and Percy Malone. Malone says TIF was supposed to prompt investment in blighted areas that wouldn’t occur but for the TIF incentives, “not for those places growing like crazy and taking money that should be going into the pot for our schools statewide.” Malone worries, however, that the legislature won’t have time or will to fix the TIF problem, given other headaches, including school facility repair. Those madly rushing to establish TIFs, thinking a legislative change could end the gravy train, might want to heed Attorney General Mike Beebe. Beebe told me that he stands behind a 2002 opinion of Attorney General Mark Pryor. It defers a firm answer, but suggests that TIF districts are treading on shaky constitutional ground when they capture the rising taxes on the 25-mill maintenance and operation tax mandated by the state for every school district. That uniform 25-mill rate was established by constitutional Amendment 74. Amendment 78, dealing with TIF districts, came later, true. And it apparently did repeal the historic constitutional prohibition against using local school taxes for any purpose other than schools. But the base M&O millage is another matter, arguably a state levy. “It is unclear,” the opinion says, “whether Amendment 78 and its enabling legislation authorize the diversion of the uniform rate of tax as it applies to the increase in assessed value in a redevelopment district.” Echoes Beebe: “There is at least a serious question whether a TIF district can impact that” 25 mills. If it can’t, you can probably say goodbye to the TIF for millionaires in Rogers. That school district assesses only 27.5 mills for maintenance and operation, leaving only 2.5 mills of school taxes, and a scattering of smaller local millages, to assess against property value growth if the base millage has to go exclusively to schools. It will be much harder without that 25 mills to raise corporate welfare required for the Hunts, Waltons and Tysons of blighted Northwest Arkansas. The base millage question isn’t the only complication. The Lake View decision itself, with its call for statewide equity, and decades of desegregation lawsuits raise other questions. Can it really be constitutional for the state to subsidize private development in wealthy, mostly white school districts using state money that otherwise would be shared with Lake View and less fortunate school districts? The do-right rule, at least, says it is not fair. Surely some enterprising lawyer eventually will argue that it is legally wrong, too. We note that the constitutional challenges aren’t resolved by creating TIF districts in advance of any statutory changes the coming legislature might make.


Subscribe to this thread:

Add a comment

More by Max Brantley

  • Special master clears minimum wage initiative

    Special Master Sam Bird said today that the proposed minimum wage initiated act had sufficient valid signatures to qualify for the November ballot. The Arkansas Supreme Court will review the decision and make the final call.
    • Sep 24, 2018
  • Monday: Open line and the news

    The open line and today's headlines.
    • Sep 24, 2018
  • Special master finds term limits signatures insufficient

    A special master has concluded that petitions to put a term limits amendment on the November ballot were insufficient because 14,810 signatures shouldn't be counted, mostly for discrepancies in complying with a law that applies to paid canvassers.
    • Sep 24, 2018
  • More »

Readers also liked…

  • Double-talk

    A couple of instances of doublespeak cropped up in Little Rock over the weekend.
    • Jun 29, 2017
  • Along the civil rights trail

    A convergence of events in recent days signaled again how far we have come and how far we have yet to go in civil rights.
    • Jan 18, 2018
  • The Oval outhouse

    One thing all Americans finally can agree upon is that public discourse has coarsened irretrievably in the era of Donald Trump and largely at his instance.
    • Jan 18, 2018

Latest in Max Brantley

  • Moving deck chairs

    Governor Hutchinson has promised to soon reveal his ideas for "transforming government" — a reorganization aimed at reducing the number of departments that report to the governor.
    • Sep 20, 2018
  • Throw the bums in the legislature out

    Jon Woods, the former state senator, got a whopping 18-year federal prison sentence last week from Judge Timothy Brooks, who described Woods' criminality as "grotesque" and "depraved."
    • Sep 13, 2018
  • Armed teachers

    The Arkansas School Safety Commission heard belatedly last week about ideas to make schools safer that don't put more guns at the top of the list of solutions.
    • Sep 6, 2018
  • More »

Most Recent Comments

  • Re: No sympathy for Sarah Huckabee Sanders

    • I agree with jsb113, but it also sounds like some Democrat's you know are making…

    • on September 24, 2018
  • Re: Dress code bias

    • About the comparison of boys shorts verses girls short shorts in schools is no way…

    • on September 23, 2018
  • Re: Moving deck chairs

    • Outstanding commentary. Excellent points about the efficiency and cost savings of mega agencies. What a…

    • on September 22, 2018

© 2018 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation