Fayetteville schools sue over TIF tax grab | Arkansas Blog

Fayetteville schools sue over TIF tax grab

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The Fayetteville School District has sued Washington County officials to stop them from raking a portion of a new school millage into the black hole of dowtown Fayetteville's failed tax increment finance district. Copy of lawsuit here.

The school district says the law, though it allows capture of some school millage for redevelopment schemes in tax increment finance districts, does not allow the taking of any millage pledged to bonds, as it contends county officials are doing in this case. The new millage was passed to finance a new high school. If the money is diverted to the big downtown TIF district in Fayetteville, it will cost the schools $25,000 a year. So far, the TIF district has built a parking lot.

The bad news is that Fayetteville schools still pay a penalty for one of the few tax increment finance districts established in the state. The good news is that, thanks to the Arkansas Constitution's protection of education, poor drafting of the TIF law and the failure of greedy developers to realize that Arkansas was not an appropriate or fertile ground for this type of financing, it hasn't been much used. Though goodness knows several have tried. (Will North Little Rock Mayor Pat Hays ever let go of the illegal midnight TIF district he gerrymandered in downtown to grab taxes on a new apartment complex for his Argenta scheming? A lawsuit pends that he can't win.)

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