Three area school system leaders endorsed a ballot proposal to require Alabama counties to establish a minimum level of property taxes to fund schools.Amendment Two, which goes before voters in the November general election, is a constitutional amendment that would require every city and county school system in Alabama to have at least 10 mills of property taxes allocated for public education. About one-fourth of Alabama’s school systems fall below 10 mills.
For a homeowner with a $100,000 house, each mill of property taxes means an additional $10 in taxes annually. In the systems with the lowest property taxes of 7 mills, the owner of a $100,000 house would be looking at an additional $30 per year.
Residents of Talladega and St. Clair counties would not be affected by a tax increase. All local school systems already receive at least 10 mills, with some also drawing from additional funding sources.
Pell City Schools Superintendent Bobby Hathcock said while local taxes won’t be increased, area school systems could benefit if the measure passes. If other counties are forced to raise their taxes, that will create greater funding overall for state schools, meaning local systems could draw more state money.
“It will generate more money for the state of Alabama, and it should help us in that regard,” Hathcock said. “We could get more money out of this.”
Sylacauga City Schools Superintendent Jane Cobia echoed that point.
“It will not affect us, except that if it does pass, the total pot of money from the State Department of Education will be divided more equitably, and we could lose money if it does not pass,” Cobia said.
A state law enacted in 1995 provides that in order to get state education funds, every city or county school system must have 10 mills of property taxes or have other taxes that raise an equivalent amount of money.
Alabama has 101 city and county school systems with 10 mills or more. But there are 30 systems that have fewer than 10 mills and use other taxes to make up the difference. In most cases, the difference comes from local sales taxes.
Funding a school system with local sales or income taxes can be a dicey situation, Hathcock said. Those revenues are closely linked to the state of the economy from year to year, making income uncertain in downturns.
“Income taxes and sales taxes are the reason we have proration in Alabama,” Hathcock said. “When you’re funded on a property tax, that’s pretty stable.”
Pell City schools receive 13 mills in local taxes, augmented by a 1-cent sales tax earmarked for education. Sylacauga city schools have 28 mills of property taxes, Cobia said. Talladega city schools get the minimum 10 mills.
Talladega County Schools Superintendent Cindy Elsberry was out of town Tuesday and could not be reached for comment.
Talladega Schools Superintendent Lee Messer said funding schools with property taxes is not only more stable, but more “equitable.”
“As budgets get higher and inflation comes on, using a property tax makes for a much more equitable system,” Messer said. “… This would give them more guaranteed funding.”
The proposal has been endorsed by state education Superintendent Joe Morton, the Schools Superintendents of Alabama and the Alabama Education Association, but Lt. Gov. Lucy Baxley, the Democratic nominee to challenge Gov. Bob Riley’s re-election bid, says she plans to vote against it because it’s a tax increase for some Alabamians.
Riley, whose duties as governor include serving as chairman of the State Board of Education, said he has “somewhat of a problem” with the idea of a constitutional amendment where voters statewide can make people in a county “do something they don’t want to do.” But he declined to say how he plans to vote Nov. 7.
The Legislative Fiscal Office estimated Amendment Two would generate about $23 million in the affected school systems. It would start with the tax year beginning Oct. 1, 2007.
To pass, Amendment Two will have to get a majority of the votes statewide. If it does, it will take effect even if voters in the 30 affected counties reject it.
— The Associated Press contributed to this report.
