Fayetteville Schools Join Lawsuit Against University of Arkansas

The University of Arkansas filed a lawsuit against Washington County, and the Fayetteville School District joined the suit Thursday night.

"You have to prove that you have a right to a tax exemption beyond a reasonable doubt, so it's a very high burden of proof," said Washington County Attorney George Butler.

Butler said Washington County's Assesor decided to review all tax exemptions last summer. During his evaluation, he decided to deny several University of Arkansas' tax exemptions. Now the university has filed suit.

"They're claiming that they are immune from taxes because they are an entity of the state," said Butler.

In the lawsuit, the school claims several pieces of property they own, while not currently being used for educational purposes, are part of a master plan so they should not have to pay property taxes. But Butler believes UA should have to pay.

"The Supreme Court has said that you can't rent out property and maintain your tax exempt status, they are renting some of their property out to private vendors which is clearly prohibited."

According to Alan Wilbourn with Fayetteville Public Schools, the district has a lot to lose in this case.

"On an average year, it would impact us to about $165,000 a year, which basically equates to three full time teachers."

Butler said money collected through property taxes is alloted by the county, and the Fayetteville School District receives the majority of those dollars. Thursday night, the school board unanimously decided to join the lawsuit. Now, it is Washington County and Fayetteville Schools versus the University of Arkansas. But Wilbourn said the district respects the intent of UA's suit, and does not want this one disagreement to tarnish their relationship.

"Trying to be good stewards of the tax dollars, we decided that the sensible thing to do was to ask the court if we could intervene," said Wilbourn.

The board also unanimously approved the hiring of Jack Butt, of the Davis, Clark, Butt, Carithers & Taylor Law Firm to serve as legal counsel for the itnervention litigation.

According to the Washington County assessor, the university has been paying property taxes on certain parcels of land but is now asking to be exempt from all property taxes. He also said the last two years, the school has paid its taxes under protest meaning if they win the case they would get that money back.

Attorney Butler said a judge will hear the case in 2013, but he believes it will ultimately end up in front of the Arkansas Supreme Court. He said the final ruling will probably be made in about two years.

Our crews reached out to the University of Arkansas, and were not able to get an interview on Thursday.