Updated 

Beebe optimistic as special session begins


LITTLE ROCK — Gov. Mike Beebe expressed confidence early Thursday that measures to address rising teacher health insurance costs would pass in a special session set to begin later in the day.

The governor also expected approval of a bill to give the state control of revenue some districts collect above the statewide property tax, and that the legislation would stand a threatened court challenge.

The General Assembly convenes at 3 p.m. Thursday, with the goal of addressing the two issues in a minimum three-day special session.

Beebe called the special session Wednesday after legislative leaders told him they had reached consensus on a plan to stabilize health insurance premiums for teachers and other public school employees. Absent legislative action, the rates are scheduled to shoot up nearly 50 percent Jan. 1.

Lawmakers will consider a half-dozen bills, four dealing with the teacher health insurance issue. One would repeal Act 954 of 2013, which eased regulatory requirements on municipalities and industries that discharge minerals into Arkansas waterways.

Another would phase out the excess property tax revenue — known as uniformed tax rate (URT) — some school districts have kept and redirect those funds to the state.

Beebe said Wednesday morning that “there is a lot of misinformation out there” about the proposal to phase out the URT.

The proposal is in response to a 2012 Arkansas Supreme Court decision that said district do not have to surrender to the state Department of Education money they collect under the statewide 25-mill property tax that exceeds the state-mandated per-student funding level.

“It’s pretty clear,” Beebe told reporters. “All you have to do is read the opinion. The Supreme Court said if you want to clarify just have the Legislature do a statute on it. That is what they are doing. They are following the Supreme Court.”

Most districts’ collections under the 25-mill tax are below the mandated funding level, so the state provides them funding to make up the difference, but a few districts’ collections under the tax exceed the per-student minimum. Among them are the Fountain Lake and Eureka Springs school districts, which sued the state for the right to keep the excess money and won in the Supreme Court.

“That 25- mill URT is not a local tax,” Beebe said. “It’s just like a sales tax, you know Little Rock collects more in state sales tax than … Lonoke, but the state sales tax is thrown into the pot and distributed to schools.”

Wednesday, Eugene Sayre, lawyer for the school districts that successfully sued the state, said eight school districts that generate excess revenue from the 25-mill tax will be hurt financially if the Legislature approves the measure. He also said he expected a law suit to be challenged if the proposal is passed.

“People are going to sue,” Beebe said Thursday. “You’ve just got to do what the law calls for and what you think is right, that’s all you can do.”

The proposals to address the teacher insurance crisis includes both a short-term and long-term solution. The short-term proposal calls for using $43 million from the state surplus to avert a 50 percent rise in health insurance rates set to go into effect Jan. 1. Another $36 million a year would hold down future increases over the long-term.

That long-term plan would redirect $36 million annually to the school employees’ health insurance system — $10 million from general revenue, $16 million from the school facilities improvement program and $10 million from state funding for teacher professional development.

Another $18 million would be passed on to school employees in the form of premiums, though that amount could be reduced as a result of reforms to be recommended by the task force.

The attorney for the eight school districts that currently keep the excess funds has said he legal challenge is possible if the bill is approved by the legislature.