Those on either side of Baldwin County’s millage renewal debate are trying to determine their next steps following the March 1 primary, in which voters renewed a three-mill property tax but rejected a one-mill tax which would have provided $4 million in funding for the county school system.
According to Baldwin County Schools Chief Financial Officer John Wilson, the one-mill property tax, expiring in 2018, is valued at $3,996,853. While the tax won the popular vote with 33,851 in favor to 22,873 against, it did not pass because it did not cross the 60 percent threshold to win a supermajority.
The three-mill property tax renewal survived the vote with a simple majority, 31,269 yes votes to 24,798 no votes. Wilson said the one-mill tax required 60 percent because it was first levied and ratified in the original Alabama Constitution of 1901.
“It was actually the very first statewide tax for education and required a supermajority of 60 percent,” Wilson said. “The three-mill tax district was first ratified in 1916 and only required a majority vote.”
As a result, when the one-mill tax expires in 2018 the county will levy just 11 mills for schools, which Wilson said will place it 104th of 135 systems in the state for ad valorem mills collected for education.
One mill is equal to $1 for every $1,000 in property value. Residents in incorporated areas pay 28 mills in state, county and school taxes in addition to municipal ad valorem rates.
While $4 million may not seem like much in a $300 million budget, Baldwin County Superintendent Eddie Tyler recently told Lagniappe funds from the one-mill tax pay teacher salaries, bus drivers, cafeteria workers and other services.
“Naturally, losing about $4 million in funding isn’t chump change,” he said.
Cuts will be debated by the Baldwin County Board of Education and superintendent but according to Wilson, the expiration of the one-mill tax and the potential expiration of the 1-percent penny sales tax in the same year could spell a “dire financial situation” for the system.
The penny tax, the county’s one-cent sales tax earmarked for education, was approved in 2010 and renewed by voters in 2012. An effort to make the tax permanent failed in 2012 and it will also expire in 2018 unless the state legislature acts to renew it.
According to the school system, the penny tax provided $35 million in revenue this year. The money allowed the system to budget for 518 employees it otherwise would not have, including 151 teachers, 88 bookkeepers, 73 maintenance custodians and 72 bus drivers.
“Salaries and benefits make up over 70 percent of our annual budget, so difficult decisions will have to be made,” Wilson said. “The system generates almost all of its operating funds from sales tax revenue.”
David Peterson, chairman of the Citizens for Government Accountability PAC which opposed the millage renewals, said the school system’s local funding has increased from $112 million in 2013 to $143 million in 2016 and the system should be able to make up for potential funding losses with increases in sales tax revenue and growth in the real estate market contributing additional ad valorem revenues.
Documents provided by Wilson showed the system’s local funding in its general fund had increased from $112 million in 2012 to just $113.4 million in the 2016 budget. He said the general fund includes local tax revenues used for operational needs.
“2016 sales tax revenue collected is currently estimated to exceed budgeted figures and we hope that trend will continue throughout this fiscal year,” Wilson said.
The PAC will meet later this month to determine how to move forward, whether it should focus on advocating for issues or endorsing candidates for county and municipal office.
Going forward, Peterson said, the PAC is concerned the county’s local delegation will feel pressure to lift the “sunset provision” on the penny tax and make it permanent without a vote of the people.
“I didn’t personally oppose the penny tax before and I haven’t seen much opposition to it elsewhere,” Peterson said. “But the people voted to renew it the last time and the people ought to be able to vote on it again. I’m asking the local delegation to let the people decide; don’t take it out of the people’s hands.”
Before the primary, the school system feared a loss of all four millage renewals would drop its tax support below the level needed to participate in the state’s equity funding program. Wilson said the passage of the three-mill tax will keep it above the necessary 10 mills, but the school system will have to operate on a limited budget to provide the necessary local resources to its 31,000 students.
“We are talking about baseline operational funding here; we still lack the resources to properly address our rapid growth,” Wilson said. “We have seen countywide school enrollment grow by 95 percent since the last time these mills were renewed in the 1980s and we haven’t built a new school in Baldwin County since 2009.”
According to Peterson, his PAC’s goal is to involve the public in the political process.
“All these taxes chip away at the budgets of regular people,” he said. “The ad valorem taxes, the sales tax, the penny tax and the potential hike in the gas tax make an impact on the taxpayers.”
The PAC is connected to the Citizens for Government Accountability Facebook page, which has grown to more than 700 members in the last few months. Peterson said he has asked some of the page’s members to tone down their rhetoric following the primary.
“We need to get better organized there and really focus on posts that educate, not posts that name-call and spread rumors about people,” Peterson said. “Some of the posts there have gotten out of hand and we need to calm it down. I’ve asked people to get back to posting facts that will advance the debate.”
While the PAC and Facebook page have been accused by some of having nefarious intentions, Peterson said it is committed to transparency.
“It is always better to do things in the open when you have nothing to hide, and we want people to know who is funding us and what we are doing,” he said.
Edited on March 10, 2016 to clarify the school system’s general fund local revenues from 2012-2016.