The Arkansas Supreme Court today affirmed a Garland Circuit Court ruling that investment property owned by the Arkansas Teacher Retirement System — in this case a Hot Springs shopping center— is not exempt from the property tax.

The retirement system argued that it should be exempt because proceeds supported what is essentially a tax-exempt government entity, the agency that manages teacher retirement. It argued the property was used “exclusively for public purposes” — paying public retirement benefits.

The court didn’t buy it. It cited a line of cases — investments by a public hospital and school district, for example — in which it had said the beneficiaries of the investment weren’t sufficient ground for a tax-exemption. The court rejected an argument that the system investment was analagous to land purchased under constitutionally authorized industrial development bond schemes, where the land is owned by the public and exempt from taxes. This case did not involve such bonds, the court said. The court also dismissed an argument that a state statute prohibited taxation of teacher retirement property investments. The statute “must yield to the Constitution,” the court said.

The retirement system has had disputes on other parcels of Arkansas land on the taxing issue, now resolved in favor of those seeking property taxes.


ALSO AT THE SUPREME COURT TODAY: Little Rock lawyer Gene Sayre made oral arguments today on the lawsuit challenging the constitutional amendment — since approved by voters — that raised the consumer interest limit, took off a limit on government bonds and provided for bond finanacing of energy projects. Sayre has argued that the legislature rolled up too many unrelated subjects in one proposal, but a lower court rejected the argument. If practical politics matter with this court, hard to see this one getting overturned. But who knows?