Nevada County Picayune and Gurdon Times Newspaper Archive

Amendments To Affect Schools If Passed

Voters in Arkansas will be asked to choose between two amendments concerning property taxes in the November General Election.

These will be listed as amendments 2 and 4. They are as different as day and night, according to Charles Knox, assistant director of the Arkansas Association of Educational Administrators.

Knox spoke to a group of administrators from the area in Hope Tuesday, April 25, outlining the differences and letting the school officials know neither of the proposed amendments will be good for schools in Arkansas.

However, he said, Amendment 2 isn't as bad as Amendment 4, and urged all to let the parents in their districts know the difference.

Under proposed Amendment 2 property taxes would still exist, with reappraisals not to increase in assessed value of more than 10 percent on land not a taxpayer's homestead. For homes, this increase would be limited to 5 percent a year.

It does not address "newly discovered real property" and how it will be taxed, along with improvements to existing property.

For those who are 65 or older or disabled, their assessments would basically be frozen as of Jan. 1, 2001.

However, for those counties not having been reassessed between Jan. 1, 1986 and Dec. 31, 2000, this does not apply.

Residents in those counties would be assessed by having 1/3 the amount of the last assessment, with the third added for the next two years.

Additionally, to help the poor, disabled and elderly, there would be a $300 tax credit, starting in 2001.

In many instances, Knox said, this will mean people won't pay any property tax.

Proposed Amendment 4 calls for the abolishment of property taxes, with the closing of the offices of tax assessor and collector.

In part, the amendment reads, "However, abolishing "assessments" broadens the impact when we note that improvement districts, fire ... or service districts" are included."

Property taxes also help fund them as well.

Under the proposal, all personnel involved in the collection of property taxes, except those necessary for the collection of delinquent taxes, would be terminated no later than April 1, 2001.

This, according to the amendment, would save the state $43,500,000 a year.

In place of property taxes, Amendment 4 calls for an increase in the state sales tax of 1 7/8 percent to offset the loss of revenue.

In 1999, the assessments for 1998 were $971,000,000, and are projected to be $1,031,000,000 for 2000 taxes to be collected in 2001.

The amendment also requires a 3/4 vote of the house and senate before any sales tax could be approved, and this, in turn, would have to be voted on again by the people.

Arkansas' sales tax is currently 4 5/8 percent. Under this provision, it would be raised to 6.5 percent, and this increase would reportedly produce $727,000,000 in 2001.

This would leave a revenue shortfall of $300,000,000.

Two years ago a similar property tax amendment was stricken from the ballot by the court system because signatures on the petitions had been illegally collected.

Knox said he hopes this proposal remains on the ballot so the people can vote on it. "I want it to stay on the ballot and beat it like a yard dog. Until it's beaten at the polls, it will keep coming back."

Amendment 2 was proposed by the Arkansas General Assembly during the regular legislative session as an alternative to Amendment 4.

In discussing what the passage of Amendment 4 would mean, Knox said fire and improvement districts would lose $55 million, and these entities are unable to collect other taxes.

Schools, he said, could be devastated. The language in Amendment 4 doesn't address the bonded indebtedness of school districts. These bonds are legal, binding contracts and are based on the collection of ad valorem taxes.

The end result for school districts in Arkansas, should Amendment 4 pass, would be the creation of a fully state funded educational system.

Under this system, Knox said, the state would take all the money, divide it by the number of students in public schools and dole out the funds based on the final figure. This would reduce revenue to schools by roughly $440 per student.

"Some districts would lose big," Knox said, adding consolidations would occur regardless of what the people wanted.

"Arkansas' existence is based on the three legged stool," he said. These legs are sales tax, property tax and the state's income tax system. "The loss of any one affects everything else."

He told the administrators their school boards need to take a long, hard look at their budgets and figure out where they could make cuts to offset the loss of $440 per student.

The first thing to go, he said, would be transportation. Public schools in Arkansas are not bound by law to transport students to and from school.

Next would be school standards, followed by athletics. This would mean an increase in the student-teacher ratio without the necessary supplies to teach properly.

One of the final steps would be laying people off and not renewing contracts.

"Schools would survive," he said, but at the expense of cities and counties. Tax is the price we pay for civilization."

Larry Teague, state representative from Nashville, said Arkansas's tax base is low in all aspects but the sales tax. Arkansas, he told the gathering, has one of the lowest property taxes in the nation.

"If we've got to pass one (of the amendments), pass Amendment 2. I don't like either one, but it would be irresponsible to take the ability to pass taxes away."

Teague said people will still want and need the same services they get now, but this couldn't be done should Amendment 4 be approved.

Currently, he said, the tax on groceries is the only stable sales tax in the state. This is because people always need to eat, but they don't always need to buy a new car, furniture or appliances.

If Amendment 4 passes, he added, the legislature would do everything it could to keep schools going. However, other services would have to be cut or eliminated.

Russ Bennett, the representative from Lewisville, agreed, saying he doesn't want to raise taxes.

The passage of Amendment 4, he said, would allow the state to provide basic services only, with cuts being made in the funding of infrastructure and other areas.

"We can't afford to allow Amendment 4 to pass," Bennett said. "It's important for it to be voted on and knocked down by a vote of the people."

Knox doesn't think Amendment 4 will pass if it remains on the ballot. The proposal could be challenged before the November General Election.

The damage it would cause to the educational system in the state would be devastating, he said. All new building projects would have to be approved and funded by the state.

The state would also have to assume the more than $900,000,000 districts in Arkansas owe from bonded indebtedness.

More government bureaucracy would have to be created to oversee the funding of schools, and, worst of all, local school districts would not be allowed to decide how to spend the money they got.

"I predict it will result in a massive consolidation of districts if Amendment 4 passes," Knox said. "There would be no other choice but to close some of the smaller schools."

Knox said Arkansas Gov. Mike Huckabee is also strongly opposed to Amendment 4.