Shutting off the tap

Lawsuit, changing attitudes signal end of cash handouts

Once again, the Arkansas Supreme Court has necessarily corrected the state’s Legislature.

The court ruled last week that a controversial grant system lawmakers used to funnel state money to local projects violates the state Constitution.

Why should you care?

It may sound like a subject of little interest, but it impacts all state taxpayers. It is your money that is in the mix.

The problem, according to the court, is that the laws appropriating this particular money didn’t spell out the purpose of the funding.

The issue here is accountability on the part of state lawmakers as they direct where these tax dollars, called general improvement funds (or GIF), go.

You should know that this is just the latest iteration of a long-running argument.

Former Rep. Mike Wilson, D-Jacksonville, brought the lawsuit. He lost in a lower court but prevailed on appeal to the state’s high court, which has sent the case back to the Pulaski Circuit Court for further action.

While the case isn’t over, it is clear that the Legislature cannot proceed as it has in the past. How it handles this money must change.

Wilson, a lawyer, had similarly sued the state in 2006, winning a Supreme Court decision to bar the Legislature from funding local projects directly with general improvement dollars.

This is money that collects in state accounts as surplus revenue and gets batched and designated for general improvement spending in a later session.

Its dispersal has always been popular with lawmakers and welcomed by communities that might get a roof for a public building, a park or a ball field, maybe even some street lights out of the deal. The money has been used for all sorts of local projects.

The home districts would ask. Lawmakers would oblige, then remind voters in the next election how they brought home the bacon.

To be sure, some of these communities had nowhere else to turn for help. Many are poor and without the means to tax their own to raise money for such projects. The better angels among the lawmakers helped them out without reciprocal expectations.

Anyway, lawmakers found what they thought was a way to work around any legal constraints after the 2006 lawsuit.

The latest variation had the Legislature making grants to regional entities like the Central Arkansas Planning and Development District. It was that specific appropriation that Wilson challenged in court this year.

Similar appropriations to the agency’s Northwest Arkansas counterpart have resulted in serious federal criminal charges against a former state senator and a former House member. The latter pleaded guilty. The senator and two others — neither of them lawmakers — have pleaded not guilty to corruption charges.

The regional entity passed on grants earmarked to Decision Point Inc. in Bentonville and to Ecclesia College in Springdale, where an administrator is also charged with having given kickbacks to the lawmakers. Decision Point paid back its grant after its parent company decided not to move forward with the program it was intended to fund.

Both examples are part of this year’s criminal investigations that have deepened the controversy over general improvement funds.

But there have long been problems.

Over the years, major political fights developed over who gets to decide where surplus funds will be spent. There were tussles between lawmakers and former governors over who should control how much of the money — not to mention questions about some of the spending choices individual legislators have made.

So now we have these criminal cases yet to be decided and more charges are possible, maybe even likely, related to the most recent round of general improvement funding.

Remember, every planning agency in the state got money for local project grants, each of which needed some legislator’s nod of approval. They’re all getting reviewed.

At least the Legislature held off this past session, declining to appropriate any funds for regional grants. The unspent money will instead stay in a rainy-day fund.

For his part, Gov. Asa Hutchinson has said he would support legislation to end the practice of letting lawmakers direct where surplus funds will go.

The need for a helping hand from the state to local projects will definitely continue, and lawmakers will most likely try to respond.

But something clearly needs to be done to make whatever system replaces this one accountable and transparent — and free of corruption.