The Arkansas Supreme Court says it won’t reconsider its November ruling that lets school districts keep excess property-tax revenue if they raise more money than that set under the state’s funding formula.

Attorney General Dustin McDaniel sought the rehearing after the court, which split 4-3 on the case, said school districts in Eureka Springs and Fountain Lake could hold onto the revenue.

In four districts, the statewide 25 mill property tax generated more than the $6,023-per-student pledge from the state. The Arkansas Department of Education withheld state and federal funding from the districts over the dispute.

A lower court said in September 2011 that the revenues belonged to the state and not the local district. However, the court said the state could not withhold funds from the recalcitrant school districts.

Gov. Mike Beebe said the Legislature should try to resolve the dispute during its current session.

Eugene Sayre, an attorney for the school districts, said the court was correct last week when it rejected McDaniel’s request for a rehearing.

“The administration will now go to the Legislature and will move the battle from the Supreme Court to the General Assembly,” Sayre said.

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