By JOHN HOFHEIMER
Leader senior staff writer
Thursday, in the first case argued after summer recess, Arkansas Supreme Court justices grilled former Jacksonville state Rep. Mike Wilson and three other attorneys as the court ponders the constitutionality of using “surplus” general improvement funds to fund local projects.
Wilson’s appeal was of a narrow November ruling by Circuit Judge Chris Piazza, which found that making GIF grants to local organizations through planning and development districts was constitutional.
The points of contention in Wilson’s appeal were whether or not the GIF grants were unconstitutional as local legislation, whether or not Wilson had standing to bring the suit and if so, if it were a moot point because the money was all spent.
Going to the issue of constitutionality, according to Wilson and his attorney John Ogles, is the planning and development district’s lack of accountability regarding the grants. Plus, Ogles noted, the district itself received $119,000.
Piazza didn’t rule on findings of fact in Wilson’s suit, so they weren’t part of the appeal.
At least two justices suggested that an option might be to remand the case to Piazza for a finding of fact.
“Sam (Jones, attorney for the Central Arkansas Planning and Development District) and I agreed that remanding the case to Piazza would be a proper remedy, as suggested by Justice Robin Wynne,” Ogles said on Friday.
The $15 million distributed through Central Arkansas Planning and Development District and each of the seven other planning and development districts was from estate taxes and some carryover, and Wilson conceded he did not pay any estate taxes in that time frame.
But Justice Josephine L. Hart asked Assistant Attorney General Jennifer Merritt if the record showed where the carryover money came from originally. She said it didn’t, but that the onus to identify the source was on Wilson.
Merritt and Wilson, himself a former state representative and an attorney, answered questions well beyond their allotted 15 minutes, as did Jones and Wilson’s attorney John Ogles of Jacksonville, each of whom was allotted five minutes.
Wilson had thought the matter settled when, in 2007, Circuit Judge Willard Proctor ruled in his favor, finding the GIF grants unconstitutional and upon appeal, the state Supreme Court upheld that ruling unanimously.
But by 2014, legislators believed that they found a way around the rule against local legislation by channeling the money through the state’s eight planning and development districts, then enacting the will of the individual legislators, instead of the old way — direct appropriation.
Planning and development district boards, made up of mayors and county judges, made the final decisions, but acceded to the wishes of legislators. State representatives were allowed to designate $70,000 worth of grants each and $285,000 for state senators.
Wilson calls the workaround essentially a money-laundering scheme.
Grant applications are made from, for instance, volunteer fire departments, libraries, community centers, softball complexes and church colleges.
“Nobody’s against Meals on Wheels,” Wilson has said, “but GIF grants are not the way to do it.”
Wilson argued for restitution to the state treasury if the court rules the grants unconstitutional.
Merritt argued that restitution is not an available remedy if state agencies and officials acted in good faith in making those grants.
In most instances, the court will rule in about two weeks, according to Jones.
“It was one of the most extensive oral arguments I’ve ever seen,” Jones said. “They went well beyond the allotted time.”
He suggested a ruling may take longer than usual.