As state legislators begin to meet in Montgomery next week to discuss the merits of raising the gas tax, two Eastern Shore cities are likely to schedule separate referendums to allow voters to decide whether to raise their property tax to benefit local schools.
The city councils of both Spanish Fort and Fairhope will likely pass resolutions in support of the referendums at their next scheduled meetings, setting a process in motion to schedule special elections before Oct. 1. Each city is considering a referendum for an additional 3 mill property tax within its feeder patterns.
In Spanish Fort, Mayor Mike McMillan said if voters approve, 3 mills will raise $850,000 per year from its feeder pattern, which includes portions of Daphne, Loxley and unincorporated areas of the county.
“The way the council is looking at it, and the way we intend it to be structured, is this is strictly to enhance arts and academics in our schools — not athletics,” McMillan said. “We don’t feel the Baldwin County School System is broke, but we feel like we can enhance what they provide and support our teachers and administrators in providing the programs and materials they want to a greater degree than we are.”
Except for a small portion of northern Baldwin County comprising mostly timberland, the majority of property owners in the county pay a base rate of 28 mills of property tax to the state and county. Municipalities then add their own rates. Spanish Fort is one of the lowest at 5 mills; Fairhope is tied with Daphne for the highest at 15 mills.
In 2015, a countywide referendum for an additional 8 mills ad valorem tax (5 mills in the extreme northern portion of the county) was defeated by nearly 70 percent of voters, while they also used the opportunity to eliminate tax renewals. At the time, the increase was projected to raise $28.5 million in annual revenue.
In its first meeting of 2017 the Baldwin County Commission voted unilaterally to renew a 1-cent sales tax in perpetuity, structuring it to split with the school system, which allowed the school board to borrow $60 million for a capital campaign. In December of that year, voters also approved a 1 mill tax in 2017 with the issue piggybacked on the ballot for the special election for U.S. Senate.
Still, as Baldwin County remains the state’s fastest-growing county and Gulf Shores recently voted to break off and form its own school system, funding challenges remain.
“I understand any time you ask for more revenue people tend to react that they don’t want to do it, but we think the payback here is a real value,” McMillan offered.
The general sales tax rate of Fairhope is 9 percent, while those in Spanish Fort range from 8.5 percent to 10.5 percent; there are special sales tax districts in the Eastern Shore Centre and Spanish Fort Town Center.
“Population-wise we’re growing, we’re double digits every year and one of the major drawing cards are our schools,” McMillan said. “We have outstanding principals and administrative staff that have driven [schools] to a high level, and with a referendum we aren’t trying to force this on anyone, but we want them to come and ask questions and hopefully see it the way we do.”
In Fairhope, the City Council will likely pass its own resolution in support of the 3 mill referendum at its next meeting March 7. But on Monday, Mayor Karin Wilson also proposed a separate plan to provide schools additional revenue from a variety of existing funding sources, “at no additional cost to taxpayers,” she claimed.
Noting the city already charges the highest municipal tax rate in the county, Wilson suggested first, the Baldwin County Board of Education reimburse the city for $530,000 it spends every year in support of athletic programs — money she claims no other city in the county pays.
Next, once the city fully completes its debt service in June, she suggested using 10 percent of the 25 percent of sales tax currently obligated for debt toward schools instead.
Combined, those two sources would provide an estimated $1.4 million annually for schools, while the 3 mill tax district is estimated to provide $1.8 million.
To raise the other $400,000, Wilson suggested using a small portion of utility revenue, plus urging the Baldwin County Commission to pass impact fees on developers to put some of the burden of growth on the people moving into Fairhope’s feeder pattern, rather than those who are already there.
“What I’m describing are ideas that are more equitable to everyone concerned, especially constituents who right now are paying 4 mills that no one else is paying,” Wilson said at the council work session Monday, referencing the 4 mill equivalent of the city’s $530,000 athletic subsidy. “No special election would be needed … it would raise $1.35 million by vote of the council and would not prevent consideration for a tax overlay after the equitable sources have been put in place first.”
With the exception of Council President Jack Burrell, other councilmen seemed receptive to portions of Wilson’s proposal, although they noted the special tax district would be desirable because it would provide reliable income over 30 years, whereas Wilson’s proposals could be amended or rescinded by elected officials in the future.
One mill equals one dollar on every $1,000 worth of assessed property value. In Fairhope, where property values average $300,000, the average property owner would pay about $90 per year if the referendum passes. In Spanish Fort, it would be slightly lower at around $78 per year.
If the city councils pass resolutions, a petition of 200 qualified electors would also have to be submitted to the school board, which would then pass its own resolution and send it to the County Commission to schedule the special election. The school board’s fiscal year begins Oct. 1, and in an attempt to collect the resulting funding by 2020, both cities are expediting the proposals to hold the election beforehand.
Fairhope City Councilman Robert Brown, who introduced the proposed resolution following the recommendation of the Education Advisory Committee, is optimistic about its approval.
“There’s a lot of excitement within the education community about what this will do,” he said.
The print version of this article incorrectly stated the date of the Fairhope City Council’s next meeting. It is March 7.
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