Finally, Arkansas' New Finance Law

In 1995, Arkansas enacted two new bills that changed the way in which schools were financed. Act 916 required all school districts to levy a 25-mill tax based on an assessment ratio of 20 percent of use value on all property for maintenance and operation. The act also revised biennial appropriations for the State Department of Education, transferring several categorical funds to basic school support. Act 917 mandated the distribution of all funds on the basis of average daily membership (ADM) and prioritized certain types of school aid. This paper describes the provisions of Acts 916 and 917 and explains how school districts are to expend funds they receive. A conclusion is that Act 917 is exceedingly complex and difficult to understand. School district superintendents dislike the reform because no district collects 98 percent of its taxes. The law abandons weights and instead specifies real dollars, meaning that there must be regular reviews. The law also abandoned weights for special education, which increases the potential for litigation by parents of special-needs children. In light of these consequences, equity in Arkansas has yet to be solved. One table is included. (LMI)