A state lawsuit which was holding up progress on building a new Fulton County Jail has been resolved.
On Thursday, June 23, the Arkansas Supreme Court ruled that Constitutional Amendment 89, which was passed by voters last year, was legally written and approved.
As The News reported last week, the Amendment removed a cap on consumer interest rates and removed an interest limit on government bonds.
Had the amendment been stuck down, a USDA loan to build the $1.7 million dollar Fulton County Jail would have been in jeopardy, since the interest rate exceeds the cap set under an old Arkansas law.
A Jacksonville woman filed suit claiming the amendment was illegal, since it included three items in one amendment.
Six of seven Justices ruled that Amendment 89 did not "constitute a manifest fraud upon the public," in that all three items dealt with the general subject of economic development and debt obligations.
One justice dissented claiming the "Legislature engaged in the prohibited practice of logrolling," by putting three issues on one amendment.
The Supreme Court just heard arguments in the lawsuit on June 16, and it usually takes months for a final ruling to be issued.
Little Rock Attorney Heartsill Ragon, who is handling jail financing matters for Fulton County, had predicted the court would issue a quick ruling, before its summer recess.
Ragon told The News a prompt ruling was needed because cities and counties all over the state had put sales tax and construction issues on hold until the challenge to the constitutional amendment was settled.
While the ruling is favorable to jail project financing, a final hurdle remains before construction can begin.
Fulton County voters must approve an agreement to reallocate a sales tax which is currently being collected.
Under the agreement, all cities in Fulton County have agreed to give part of their revenue from a one percent sales tax to the county, to help with payments on the jail construction loan.
A vote on that issue may take place by late summer or early fall.
County Judge Charles Willett worries that a $300,000 grant, which is part of the jail financing package, will be lost if the project is not approved and construction ready to begin by fall.