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NLR hardball 

North Little Rock Mayor Pat Hays simply won't quit trying to raid school taxes to pay for downtown development projects.

Latest development: City Attorney Jason Carter has drawn up a proposed settlement of the North Little Rock School Board's lawsuit challenging an illegal deal done by the City Council in the waning minutes of 2008 so the city could capture 6 mills in school property taxes on a new $25-$30 million apartment complex, the Enclave, before it went on the school district's tax rolls.

The settlement, in its current form, gives the School Board little. It doesn't revoke the illegally established and illegally gerrymandered tax increment finance district that Carter and Hays concocted to pilfer the school tax money. It talks of some unspecified amendment to that ordinance and school officials hope maybe Boss Hays will cut them in for a little taste of the loot.

Carter is supposed to talk specifics at a School Board work session soon. But it's a given that Boss Hays wants the maximum he can get to build a parking deck.

I hope the School District hangs tough. Constitutional questions remain about TIF districts, a legislative creation of developers to steal school taxes. But even if the city can grab the money, it must abide by statutory time lines and also the requirement that districts contain contiguous tracts of land. Hays and Carter dreamed up an artifice by which disconnected tracts are connected by public streets, like charms on a bracelet. Under their theory, North Little Rock could put downtown and Maumelle Boulevard in the same TIF district.

Given the procedural shortcomings, the city can't win the lawsuit. So why would the School District take a settlement that provides no cure to the illegal money grab?

Simple answer: Coercion. Boss Hays has already threatened to withhold police officers and other city help to schools if the district continues to stand in the way of his school tax raids. Three separate school officials tell me of new talk (all of the whispered variety) that downtown powers will seek to establish a state-financed charter school or private school downtown if things don't go well in the lawsuit. Such schools would drain students from the district, a financial body blow.

The city is threatening the school district in genteel terms. Carter's settlement talks of the city and school district's need to “preserve their cooperation relationship and mitigate the potential for future conflicts.”
In other words, the school district resists Boss Hays' tax raids at its peril. In return, the school district, gets, well, not much. Hays would create a new bureaucracy — a six-member advisory board on which he'd control two members and his pals in county government would control two more — to review proposed tax districts and pronounce them good. Should Boss Hays happen to lack a majority vote on a specific scheme, no matter. The board's decisions would be only advisory.

The settlement also gives the school district another sop — an ownership stake in any public facilities built with tax money. Big deal. Parking decks are a poor investment for cash flow. See those in downtown Little Rock.

The school district is in a sensitive spot, given the mayor's pressure. Superintendent Ken Kirspel defers to the board on this specific city raid, but he is willing to speak the larger truth about the legislation that invented a way to capture school taxes for private development capital. “There's no doubt we don't agree with the TIF law,” he said, “but it's the law. But no matter what other people say, it does take money away from schools.”

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