Siloam Springs, Bentonville on right side in road-tax suit
Posted on Friday, May 9, 2008
BENTONVILLE - The Arkansas Supreme Court upheld a 1963 law that allows Bentonville and Siloam Springs to receive a larger portion of road taxes than other municipalities in Benton County.
The court issued its opinion Thursday, affirming Circuit Judge Tom Keith's decision when he found that Benton County failed to meet its burden of proof in the case.
The state Supreme Court justices listened to oral arguments last month during a session in the Wal-Mart Auditorium at the Shewmaker Center for Workforce Technologies at Northwest Arkansas Community College in Bentonville.
The suit dates back to 1999, when Benton County sued the cities of Rogers, Bentonville and Siloam Springs. The three cities each received 90 percent of the county's 3-mill road tax collected within their city limits. Meanwhile, other municipalities evenly split the taxes with the county.
The suit challenged the constitutionality of a 1920 state law that allotted 90 percent of certain road taxes to the cities. The suit claimed that another tax act - Act 219 of 1963, which affects agreements with the cities of Bentonville and Siloam Springs - is also unconstitutional. The county's argument is that Amendment 14 to the state constitution invalidates any special or local acts that had been commonplace in past years.
The city of Rogers was dismissed from the suit.
The case had already been heard once by the state Supreme Court. Keith previously decided on a motion for summary judgment in the county's favor; however, Siloam Springs appealed the decision, and the higher court remanded the case back to Keith.
Last year, Keith ruled in favor of Bentonville and Siloam Springs after finding that the county did not meet its burden of proof.
His decision was again appealed to the higher court.
Benton County Attorney Robin Green told justices during oral arguments that Act 219 enabled the cities to use a smaller percentage of their budgets while receiving 90 percent of the road tax to build "Cadillac"roads. Bentonville and Siloam Springs were arbitrarily selected to receive preferential treatment to build county roads, and there is no state interest for them to receive the 90 percent of the taxes, Green told the justices.
Bentonville City Attorney George Spence told justices during his oral arguments that there was a rationale for the passage of the act based on the population, commerce and main thoroughfares of the cities.
Springdale attorney Tom Kieklak, who represents Siloam Springs, described the cities as distinct areas within a distinct county as a result of growth in the area.
Chief Justice Jim Hannah wrote an opinion finding that Act 219 is constitutional and Benton County did not present evidence challenging that the act is not rationally related to a legitimate government interest. There was evidence to show that other cities in Benton County are treated differently under Act 219 than Bentonville and Siloam Springs, but no evidence was offered to show that Bentonville and Siloam Springs were treated differently than other cities in the state, according to the opinion.
Since the suit, Bentonville and Siloam Springs have been splitting collected road taxes on a 50-50 basis with the county. The disputed 40 percent is being kept in an account.
Benton County Comptroller Richard McComas said that as of the end of April, the account had $ 3, 157, 988 - $ 2, 395, 075 for Bentonville and $ 762, 914 for Siloam Springs.
Spence said he is pleased with the court's decision. He said the reason for the successful appeal is the work Kieklak and the city's staff attorney, Camille Thompson, did in the lower court.
Spence said the state Supreme Court will issue a mandate in about 18 days, and once that mandate is received, he will file a motion seeking the release of the money.
"It was important that the Arkansas Supreme Court make this decision, and now the county and cities know how the money should be legally appropriated," Green said.
"The decision clearly legitimized the distribution process for Siloam (Springs ) and the other cities," Kieklak said. "The city and its citizens are pleased to recover the money and receive the 90 percent again."
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