Baldwin County Schools saw its local sales tax revenues “explode” during the previous fiscal year, a reflection of a significant spike in local spending countywide.
According to a Fiscal Year 2021 report made to the Baldwin County Board of Education on Tuesday night in Loxley, the system experienced a $10.3 million increase in sales tax generated through the county’s penny education tax. The 2021 financial term ended Sept. 30, 2021, and saw a total sales tax revenue of $52.7 million.
Countywide, sales taxes generated $144,806,049 million in FY 2021, according to Mobile County Commission Budget Director Ron Clink. This was a 23 percent growth from the previous year when $117,759,724 million was collected. Use taxes were up nearly 34 percent to about $22,957,414; lease taxes increased 28 percent to $5,054,580; and simplified seller use tax was up 39 percent to $3,919,917.
Education penny taxes took a brief hit during the pandemic shutdowns of 2020, according to Chief School Financial Officer John Wilson, decreasing from $42.6 million in FY 2019 to $42.4 in FY 2020. But the increase experienced in FY 2021 represents 24 percent more sales tax revenues.
“It exceeded all of my greatest expectations,” Wilson said, adding the current income from the penny tax has enabled the system to fund 847 staff positions.
The school district should not expect this type of growth in next year’s financial report, Wilson said, noting several “anomalies” which likely boosted local spending, such as hurricane repair expenses, stimulus checks, a post-shutdown bloom in vacations and even recent inflation.
In September, Gulf Shores City Schools filed a lawsuit against the Baldwin County school system, seeking a proportionate share of Baldwin County’s one-cent sales tax. Gulf Shores education officials argue the city, which is a tourism destination, generates 15 percent of the countywide sales taxes but only collects about 6.2 percent of the penny tax while Baldwin County Schools garners 93.8 percent. This distribution is based on average daily enrollment at both systems.
A hearing is scheduled for Dec. 8 to consider motions to dismiss the lawsuit.
The Baldwin County system finished the fiscal year with $74.2 million in its general fund, an $8.2 million increase from the beginning of the term, which began Oct. 1, 2020.
“That is factoring in a $10 million transfer from the general fund to the Capital Projects Fund,” Wilson said. The transfer was done as a cushion for when the system begins paying for its new Career Tech High School in Loxley.
The Board of Education voted Nov. 8 to award Triptek Construction of Atmore the contract to prepare the 58.8-acre site for construction. Baldwin County Schools Superintendent of Education Eddie Tyler said he expects bidding for the construction of the Career Tech facility to begin in the spring of 2022.
In addition to boosted sales tax revenues, the district collected 3 percent more in ad valorem taxes than budgeted, providing an additional $1.2 million to the total revenue from taxable property of $58.7 million.
Wilson said he anticipated the shutdowns to adversely affect property evaluations more than they did. Revenues from probate and vehicle taxes were also higher than in previous years.
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