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President Pro Tempore Sen. Jim Hendren
President Pro Tempore
Arkansas Senate
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Little Rock, AR 72201-1090

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92nd General Assembly
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Senate Committee Assignments

Senate Education Committee Recommends 1 Percent Increase in School Funding

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LITTLE ROCK - The Senate Education Committee voted to recommend an increase in state funding of public schools next year of about 1 percent.
The vote culminated months of work during which the committee met 20 times and staff surveyed administrators of dozens of school districts and conducted on-site interviews with principals. Their purpose was to determine what level of funding is needed to provide an adequate education to each of the 476,000 public school students in Arkansas.
The 1 percent funding increase means that the state would add $45.6 million a year to state aid to local school districts, both in Fiscal Year 2018 and Fiscal Year 2019.
It would increase per pupil funding, in what is known as foundation aid, from $6,646 this year to $6,713 next year and $6,781 the following year.
Arkansas schools received more than $2.9 billion last year from state sources such as the Public School Fund, Educational Excellence Trust Fund, the Educational Adequacy Fund and a facilities and transportation account. They also received more than $500 million in federal funds.
Last year Arkansas schools received a total of $5.4 billion from all sources. About 52 percent of the total is state aid. Also, local property taxes are an important source of school funding. The percentage of revenue that comes from local property taxes varies by district because of the differences in local wealth.
Two districts could levy property taxes at the same rate, but the taxes will generate more revenue in a district with a strong industrial base. In a rural area with relatively few people and few businesses, the tax rate will not generate as much.
State aid equalizes the discrepancies in school funding caused by disparities in local wealth, so a poor district receives more in state aid than a prosperous district.
The minimum rate for local property taxes for schools is 25 mills. For example, the local property taxes in a school district may generate $3,000 per student, so this year the state would provide $3,646 to bring the total to $6,646 per student.
In prosperous school districts, less state aid is needed to meet the standard of $6,646 per pupil. In fact, two years ago there were eight school districts in Arkansas where local property taxes generated more than $6,646 per student, and for that reason they received no state foundation aid.
The Education Committee's adequacy report will be the basis on which the legislature will set school funding when the 91st General Assembly convenes on January 9.
The adequacy report also will be the cornerstone for the entire state budget, because the state Constitution mandates that the state provide an adequate education to all students in Arkansas.
The state Supreme Court has interpreted the constitution to mean that the legislature must first set school funding, based on the amount needed to provide an adequate education. Then legislators should set budgets for the rest of state government.
In 2005 the Supreme Court reopened a long-running school funding lawsuit known as the Lake View case. The court ruled that the legislature had failed to comply with its duty under the constitution to fund education needs first.
It took two more years and legislative approval of hundreds of millions of dollars in additional education funding for the state to be released again from the court's jurisdiction.


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