SEARCY, Ark.—Part of a lawsuit that accuses the city of Searcy of improperly providing economic support to Harding University has been moved to federal court. The lawsuit, before U.S. District Judge Susan Webber Wright, says the city has issued low-interest, tax-exempt bonds so the city could loan the revenues to Harding, a Christian college. The lawsuit says that violates the separation of church and state. The lawsuit argues that the loans stemming from the bond issue have paid for various capital improvements at the university—providing a direct economic benefit to Harding. The lawsuit was filed by Dennis Gillam of White County and Billy Pruitt of Searcy.

Attorney Marty Bowen told the Arkansas Democrat-Gazette that the suit was filed after Gillam saw a small notice in a local newspaper about the issuance of revenue bonds for a joint project between White County Medical Center and Harding University.

Gillam hired Bowen, a longtime friend, to examine why a public entity would finance a project between the hospital and a private university.

“I’m a fan of the Constitution,” Bowen said. “The city has no business loaning money to Harding University so Harding can continue its Christian mission.”

Searcy’s city attorney, Buck Gibson, refused to comment on the lawsuit because the litigation was ongoing.

Harding spokesman David Crouch also declined to comment specifically on the lawsuit but said Harding “has acted appropriately and within Arkansas and federal statutes governing the sale of these bonds, and we’re confident that when the university’s position is presented in court, the lawsuit will be deemed to have no merit.”