LITTLE ROCK — The standard for public school facilities in Arkansas — that they need only be "warm, safe and dry" — is too low, a nonprofit group argued in a report presented Tuesday to a legislative panel.

LITTLE ROCK — The standard for public school facilities in Arkansas — that they need only be "warm, safe and dry" — is too low, a nonprofit group argued in a report presented Tuesday to a legislative panel.

Arkansas Advocates for Children and Families argued in the report, "Why School Facilities Matter," that state funding for school facilities should be increased to meet the needs of all districts and address inequities between districts.

The report comes at a time when lawmakers are considering shifting money away from school facilities to help school employees with skyrocketing health insurance costs. The state also is being sued by a school district that claims that as an isolated district it is not being adequately funded.

The current system of funding school facilities grew out of the Lake View school funding lawsuit. Before that case, funding facilities was the responsibility of local districts, which resulted in significant differences in quality between different districts’ facilities, according to Arkansas Advocates’ report.

Lake View led to sweeping reforms aimed at meeting the state’s constitutional responsibility to provide an adequate education to its citizens. Among them was the creation of the Partnership Program, under which the Division of Public School Academic Facilities and Transportation works with school districts to develop master plans for building needs.

Two types of projects can qualify for Partnership Program funding: "Warm, safe and dry" projects such as new roofs or air, plumbing or electrical systems; and "space" projects such as new schools and building additions. State funding is based on on the need for a facility to meet minimum standards.

"Wealthier districts have more money left over for the bells and whistles," Arkansas Advocates said in the report. "Districts with little property wealth struggle to meet their obligation for the basic building."

Wealthier districts have been able to modernize and maintain older buildings more readily than low-income districts, and low-income districts seldom are able to build new facilities, according to the report.

The group noted in the report that the Partnership Fund for school facilities received a $501.1 million infusion of cash in 2008, most of it in one-time surplus money, but every year since then a smaller amount has been invested — ranging from $34.5 million to $59.7 million — and expenditures have exceeded revenue.

The fund is almost depleted, and without additional state funding Arkansas will be unable to meet its public school facility needs, according to the report.

"I just think that this is a time when we need to evaluate where we are with facilities and how we go forward from here," Jerri Derlikowski, director of education policy and finance for Arkansas Advocates and the author of the report, said in testimony Tuesday before the House and Senate education committees.

Rep. Kim Hammer, R-Benton, asked about the impact a proposal to help teachers and other school employees with rising health insurance costs would have on school facilities. Among other things, the proposal being circulated among legislators would divert $16 million from the Partnership Fund to school employees’ insurance each year starting in the 2014-15 fiscal year.

"On who does it fall to replace it?" Hammer asked.

Tony Wood, a deputy state education commissioner, answered that it would be up to the Legislature to replace the money if it chooses to do so. He said one idea under discussion is to change the law so that the state could collect excess money from districts whose revenue from a statewide property tax exceeds the mandated per-student funding level and to put some of that money into the Partnership Fund.

The state Supreme Court ruled last year that as the law reads now, districts with excess revenue from the statewide property tax do not have to turn it over to the state.

The state currently is being sued by the Deer-Mount Judea School District in Newton County, which alleges that certain of its needs, including facilities funding, are not being adequately met.

Assistant Attorney General Scott Richardson updated the education committees Tuesday on the case, which was dismissed by a Pulaski County circuit judge in 2011 but was partially revived last week by the state Supreme Court.

"The gist of the claim was that they need additional money to provide an adequate education," Richardson said, noting that the Supreme Court did not rule on the merits of the district’s claims.