We continue our crusade on tax increment finance districts. Rogers, Fayetteville, Jonesboro and Little Rock are leading the charge to put big chunks of land (some worth a half-million bucks an acre) into TIF districts. When a TIF district is created, increases in property tax in the district go not to the schools for which millage was voted but to aid private development – a hotel in Fayetteville, a mall in Jonesboro, rich folks’ office buildings in Rogers. The school districts don’t care. A 2003 law replaces their TIF loss with state money that otherwise would be distributed to schools statewide. Several legislators would like to close the loopholes, including Sens. Jim Argue and Percy Malone. Malone says TIF was supposed to prompt investment in blighted areas that wouldn’t occur but for the TIF incentives, “not for those places growing like crazy and taking money that should be going into the pot for our schools statewide.” Malone worries, however, that the legislature won’t have time or will to fix the TIF problem, given other headaches, including school facility repair. Those madly rushing to establish TIFs, thinking a legislative change could end the gravy train, might want to heed Attorney General Mike Beebe. Beebe told me that he stands behind a 2002 opinion of Attorney General Mark Pryor. It defers a firm answer, but suggests that TIF districts are treading on shaky constitutional ground when they capture the rising taxes on the 25-mill maintenance and operation tax mandated by the state for every school district. That uniform 25-mill rate was established by constitutional Amendment 74. Amendment 78, dealing with TIF districts, came later, true. And it apparently did repeal the historic constitutional prohibition against using local school taxes for any purpose other than schools. But the base M&O millage is another matter, arguably a state levy. “It is unclear,” the opinion says, “whether Amendment 78 and its enabling legislation authorize the diversion of the uniform rate of tax as it applies to the increase in assessed value in a redevelopment district.” Echoes Beebe: “There is at least a serious question whether a TIF district can impact that” 25 mills. If it can’t, you can probably say goodbye to the TIF for millionaires in Rogers. That school district assesses only 27.5 mills for maintenance and operation, leaving only 2.5 mills of school taxes, and a scattering of smaller local millages, to assess against property value growth if the base millage has to go exclusively to schools. It will be much harder without that 25 mills to raise corporate welfare required for the Hunts, Waltons and Tysons of blighted Northwest Arkansas. The base millage question isn’t the only complication. The Lake View decision itself, with its call for statewide equity, and decades of desegregation lawsuits raise other questions. Can it really be constitutional for the state to subsidize private development in wealthy, mostly white school districts using state money that otherwise would be shared with Lake View and less fortunate school districts? The do-right rule, at least, says it is not fair. Surely some enterprising lawyer eventually will argue that it is legally wrong, too. We note that the constitutional challenges aren’t resolved by creating TIF districts in advance of any statutory changes the coming legislature might make.