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Grants for Local Projects Are Ruled Illegally Vague.

Grants that state lawmakers used to fund local projects violate a constitutional requirement that budget measures distinctly state their purpose, the Arkansas Supreme Court ruled Thursday, but it issued no ruling on whether the grants also defy a ban on strictly local legislation.

Justices overturned a lower court ruling in favor of $2.9 million that was awarded to the Central Arkansas Planning & Development District, one of eight regional districts appropriated surplus money to pay for various projects around Arkansas in 2015. The Supreme Court sided with a former state representative who said the Constitution requires details of how the money would be spent.

"The plain language of [the Arkansas' Constitution] requires the purpose of the appropriation to be distinctly stated in the bill itself," Justice Robin Wynne wrote.

Former Rep. Mike Wilson, who challenged the grants, was also behind a suit that prompted the court in 2006 to bar the Legislature from directly funding local projects with surplus money. Wilson had also argued the grants violate a constitutional ban on legislation singling out a city or county, but Thursday's ruling did not address the issue.

Wilson said the grant system was an end-run around previous rulings on local projects and said the lack of details on spending provided no accountability.

The court sent the case back to Pulaski County Circuit Court and did not say what should happen with the money.

A spokesman for Attorney General Leslie Rutledge said she'll work with the governor and lawmakers to ensure the ruling is implemented.

Justice Shawn Womack, a former state legislator, disagreed and said the bills provided sufficient details on spending.

"When looking at the entire act, the two sections can be read together to suggest that the General Assembly appropriated funds to planning and development districts to be distributed as grants to finance the cost of its individual projects," Womack wrote in a dissent.

The ruling comes as the Legislature's handling of local project money faces scrutiny from federal investigators.

Former state Sen. Jon Woods and two others have pleaded not guilty to corruption charges after prosecutors said they participated in a scheme under which Woods allegedly directed money to Ecclesia College in return for kickbacks. Republican former state Rep. Micah Neal pleaded guilty in January to one count of fraud related to the case. Separately, federal court documents show that a search warrant seeking material from Sen. Jake Files on $46,500 earmarked for work at a Fort Smith sports complex. Files has not been charged with a crime.

Earlier this year, Gov. Asa Hutchinson and lawmakers agreed not to direct any surplus money toward legislative projects. Instead, the money went toward a rainy day fund that could be tapped for emergency needs.

--The Associated Press

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Title Annotation:Legal
Publication:Arkansas Business
Geographic Code:1U7AR
Date:Oct 9, 2017
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