In full disclosure, as the State Senator for District 2, I represent portions of Limestone and Madison Counties, to include a majority of the City of Madison. As a representative of the people it is my singular goal in this matter to derive a fair and equitable long term solution for all parties.
A note on annexation: Madison City long ago annexed into Limestone County (as did Huntsville and Decatur). It is important to note that a city simply can not do a “land grab” to claim property in Limestone County, rather the property owner requests to have their land annexed into a city. A property owner would choose to do so for commercial or residential development as often times these land parcels were agricultural prior to being annexed into a city. I am not aware of a single incident where some form of imminent domain was used to annex land in Limestone County. State law requires that annexation of land be contiguous and it is a property owner’s right to request to be annexed into an adjoining municipality, regardless of county lines.
The Numbers – What Changed?
Until this year the children on the Limestone County side from Madison City were counted in the Madison County apportionment letters from the State Board of Education. I remain at a loss – and no one has been able to inform me – as to why this was the year to make this change. Children from the Limestone County side of Madison City have been attending Madison City Schools for years and James Clemens High School has been open for three years now. Everyone recognizes the change eventually needed to happen but why not allow for a transition period in order to prevent the crisis mode we find ourselves in? You can read the letters from the State Board of Education to Madison County here; note the drop in Madison City students occurring from July 2015 to September 2015. How did a mutual agreement that had been in place for many years seemingly expire in a 60 day period? Where is the documentation and discussion leading to this decision and why was the change not adequately publicized. I literally had to request these letters from the State Board of Education and received them in March of this year, six months after the change took affect.
The Boardroom Rather Than a Courtroom
I do not believe that litigation is the path forward. For many months now I have championed with all parties that this matter be resolved in the boardroom rather than a courtroom. There will be winners and losers should a court decide this matter, however – while everyone may not be entirely happy, everyone will get something if a negotiated agreement is reached in the boardroom. I am aware of more than one settlement agreement that has been offered by opposing sides to resolve this decades old tax distribution issue. I do not know many details beyond that, other than the opposing sides have “lawyer’d up” and at this time open communication has become challenging. I share more about one such promising agreement in discussions below.
No Silver Bullet
To say that the legislature could simply pass a state law to resolve the ongoing lawsuit is disingenuous at best. The current lawsuit is centered on a property tax established through a constitutional amendment. A general bill, passed by the legislature, cannot override a constitutional amendment – a vote of the people. A court might rule against the constitutional amendment but that decision would be appealed. Even if a general law were to pass we would transfer from one lawsuit to another; accomplishing nothing and extending the legal battle even farther.
The Student and Taxpayer Fairness Act is an example. This bill was introduced in the 2016 Legislative Session as a General Bill and assigned to the Ways and Means Education Committee in the House but did not move forward beyond that point. It was basically stranded on First Base. I was informed by legal staff in Montgomery that this bill, in its current form, is unconstitutional because the property taxes collected for the Foundation Fund were passed via constitutional amendments across the state and a general law, passed by the legislature cannot supersede a vote of the people - a constitutional amendment.
The current countywide property tax (a portion of which is the subject of the ongoing lawsuit) totaling 8.5 mils was last renewed in a special school tax election in a countywide vote occurring on 15 February 2005. You can view a copy of the ballots here (County and Athens City). Note in the county ballot language under the 3 mil school district tax the cities of Athens, Huntsville, Decatur and Madison are excluded from this tax being levied. This 3 mil tax is not included in the lawsuit as it is not collected on these municipalities.
Surprisingly only 5,906 people voted in this countywide election held eleven years ago. The results of that election are linked here.
The most promising development to date - I have had discussions with several sources close to this matter and am aware of a recent agreement that has been offered on the 4.5 and 1 mil (5.5 mil total) countywide property tax that could end the lawsuit and result in approximately $480,000 to Madison City Schools. However, there may be some strings attached regarding other taxes that are preventing this agreement from moving forward at this point. I’m not giving up hope though and continue to encourage school leadership to close this deal and end the property tax lawsuit. The only ones benefiting right now are the lawyers. Settle this in the boardroom and not the courtroom!
Sales and Use Tax – Why is Madison City Not Included?
Some people have stated that Limestone County is "stealing" tax money. Fact is, current law is being followed to include a Constitutional Amendment voted on by the people of Limestone County decades ago, before Madison City Schools existed. This tax is not currently being contested in court.
Background on the Limestone County Sales Tax collection and distribution can be found in Section 7 of Constitutional Amendment # 546. The amendment states: The State Comptroller shall issue a warrant each month payable to the County Treasurer of Limestone County in an amount equal to the certified amount which shall be paid into the county general fund to be divided between the Athens City Board of Education and the Limestone County Board of Education based on the average daily attendance of the two school systems. To view this amendment, click on this link, scroll down and click on Amendment 546.
Act 1999-173 addresses proceeds of a license tax collected in Limestone County. Page 1 Lines 18-21 stipulates– "The custodian of the county school funds of Limestone County shall apportion such proceeds between the county board of education of Limestone County and the city board of education of the City of Athens...”
Of course Madison City Schools continues to receive the portion of a Madison City sales tax collected in portions of Madison City located in Limestone County.
A third tax apportioned in Limestone County for education is the TVA in lieu of Property Tax, commonly referred to as TVA Tax. It is a rather complex formula but essentially this tax is paid by the Tennessee Valley Authority to the State of Alabama based on property occupied by their equipment, buildings, etc as that land cannot be used for anything else and is essentially removed from the property tax rolls for the state. A portion of this tax is returned to the counties where TVA has a presence and distributed by the local legislative delegations to support various functions of the county including municipal governments and schools within the county. The local legislative delegations allocate a portion annually to local schools. In Limestone County approximately $1.1M is currently divided between Limestone County and Athens City School Systems based on attendance at each system.
Until this year the children on the Limestone County side from Madison City were counted in the Madison County apportionment for TVA distribution. As stated earlier, the State Board of Education sets these numbers each year and I remain at a loss – and no one has been able to inform me – as to why this was the year to make this change without advance notice allowing the legislature an opportunity to proactively address the pending shortfall from the TVA funding. Because of this, the Madison City children living in Limestone County were not included in any TVA apportionment and everyone agrees that is not fair.
I am currently working with fellow legislators from the Limestone County Delegation to include the Madison City children living in Limestone County in the Limestone County apportionment of TVA funding for next year. Based on calculations and the most current numbers available to me this could result in approximately $140,000 to Madison City Schools. But a word of caution; this will require a legislative act in the 2017 Legislative Session and may have some opposition. Stay tuned.
Again, my singular goal in this matter is to derive a fair and equitable long term solution for all parties and I am committed to working towards that end. I am honored to represent the people of Alabama's 2nd Senate District and know that we will work together for what is best for our community of communities.
Semper Fi - Bill