2) How much will it cost and how will we pay for it?
Dr. Harvey: "Here's what the questions' eventually come down to: Why were so many city school systems able to form in Jefferson County? Their county ad valorem (property tax) for schools is 30.1 mils, yours is 12. The minute you form, the combined district and county milage you're guaranteed is only 3.1 mils . . . in Saraland they were guaranteed 20.5 mils, plus a new half-cent sales tax to begin with at district (city) level. You (would be) starting further behind . . . although there is a new two pennies of sales tax that is available. Vestavia has 52 mils . . . made decision to finance theirs with added ad valorem taxes . . . so it was a tax decision. We will look at resources to come your way as rollover . . . consider what cost of administration might look like . . . you can be dirt cheap on administration but you get what you pay for.
"You'll be getting property taxes on (kids) that live here, but if you bring in folks from the outside you would not normally get a local tax revenue to follow those kids in, except via negotiation with the county Board. Let me modify that . . . a deep concern of yours . . . you have 12 mils of ad valorem tax, 9 mils of it are county-wide . . . county taxes follow the kid, period . . . so every kid that comes to you from outside your taxing authority . . . they're going to be counted . . . its called the county-wide Foundation Program cost ratio. In short, its your kid count . . . we're going to add up numbers of kids you get . . . and if you get, say 10% of school children in the entire county, than you're going to get 10% of that (9 mils) and 10% of any other county excise, franchise, privilege, license, sales, etc. You are advantaged because when you become a district, you'll be carved out of county (tax) district 2. . . get the money that's raised here, 3 out of total 12 mils. If you have more kids coming in from outside, you're still going to get the yield average county-wide coming in . . . now, should they bring more? Yes they should bring in addition at least the average yield of the 3 mil district tax on a per child basis. Can you make them (county Board) give that money to you? . . . have to negotiate with them to get it."
"I will be able to give you your tax revenues per child vs Baldwin County . . . see where you're going to fall. The chargeback, I guess, is going to hit you a little harder than the county as a whole. What's chargeback? When you get state money, you have to ante-up to play in the state school funding system (equivalent amount of money that 10 mils of ad valorem tax will generate in the school tax district) . . . you have to put that amount forward . . . then the state calculates how much they feel (according to state law) should be spent (Foundation Program). A bad situation in this regard . . . (state) tells you how many teachers, what salaries, fringe benefits, how many text books, etc.--and requires you to budget that money . . . then may turn around, declare proration . . . and don't send you the money!"
Dr. Harvey went on to explain he doesn't include "federal money" the new system could receive is his calculations--because of their uncertainty: "Lord only knows what the Feds are going to do-- its in and out . . . targeted . . . not going to send it to you without (lots of) strings attached."
Mayor Kant asked if referendums (citizens voting for/against) were always required.
Dr. Harvey: "No new property tax can be levied in Alabama without authorization. You can do the first 5 mils on Council action alone . . . do the next 7.5 mils on a referendum (city voters) you call. To go beyond that will take constitutional authorization (State Legislature).
If there's a desire for added excise, franchise, privilege, license, etc., taxes . . . city councils can do anything they want to . . . just a matter of you doing it.
Are there any school sales taxes? No; but there are sales taxes for schools.
(It) puts you in a position a lot of city councils don't like to find themselves in. . . want to provide funding for a (quality) system . . . in top 10 in state . . . then find out on basis of the 12 mils (county ad valorem tax) . . . (Its) hard to do.
Baldwin county is probably the 5th richest county in the state . . . you shouldn't have a money problem . . . if you folks had 30 mils of property tax . . . that's why we have the state revenue department working with your Revenue Commissioner right now. So that might be a very difficult thing, but . . . may very well be something you have to consider doing (raise property taxes)."
Harvey went on to talk about the benefits of annexation for bringing in more revenue: "Annexation brings in revenue but also brings in more kids. Political boundaries affect a school system . . . a balancing act . . . quickest way to get resources . . . annex valuable property that has no kids. Its a cold (financial) fact . . . but the more able students . . . fewer with learning disabilities . . . key to having a better system. . . stay away from (annexing) apartment complexes . . . valuable commercial property better . . . get tax revenues but don't bring in more kids . . . a cold hearted situation.
Homewood . . . annexed a valuable commercial/industrial corridor . . . down Lakeshore Dr. (a Wal Mart, Sam's Club, etc.) . . . get money with no new kids . . . have gotten much wealthier by picking up huge tracts of commercial and industrial property . . . you all know . . . homes are taxed at 10% (rate of total assessed value) and bring in kids . . . commercial is 20% and brings no kids (when annexed) . . . may get more sales tax out of them too."
Bob Callahan observed: "Most of the growth is occurring to the east and south of town," and promised to get Harvey the population data he needs.
Dr. Harvey: "Its a complicated situation."
[Publisher's Notes: No mention was made how the proposed new 1 cent county sales tax would affect a new city system (should voters approve it Mar. 23rd)]
to be continued
2) How much will it cost and how will we pay for it?
Dr. Harvey: "Here's what the questions' eventually come down to: Why were so many city school systems able to form in Jefferson County? Their county ad valorem (property tax) for schools is 30.1 mils, yours is 12. The minute you form, the combined district and county milage you're guaranteed is only 3.1 mils . . . in Saraland they were guaranteed 20.5 mils, plus a new half-cent sales tax to begin with at district (city) level. You (would be) starting further behind . . . although there is a new two pennies of sales tax that is available. Vestavia has 52 mils . . . made decision to finance theirs with added ad valorem taxes . . . so it was a tax decision. We will look at resources to come your way as rollover . . . consider what cost of administration might look like . . . you can be dirt cheap on administration but you get what you pay for.
"You'll be getting property taxes on (kids) that live here, but if you bring in folks from the outside you would not normally get a local tax revenue to follow those kids in, except via negotiation with the county Board. Let me modify that . . . a deep concern of yours . . . you have 12 mils of ad valorem tax, 9 mils of it are county-wide . . . county taxes follow the kid, period . . . so every kid that comes to you from outside your taxing authority . . . they're going to be counted . . . its called the county-wide Foundation Program cost ratio. In short, its your kid count . . . we're going to add up numbers of kids you get . . . and if you get, say 10% of school children in the entire county, than you're going to get 10% of that (9 mils) and 10% of any other county excise, franchise, privilege, license, sales, etc. You are advantaged because when you become a district, you'll be carved out of county (tax) district 2. . . get the money that's raised here, 3 out of total 12 mils. If you have more kids coming in from outside, you're still going to get the yield average county-wide coming in . . . now, should they bring more? Yes they should bring in addition at least the average yield of the 3 mil district tax on a per child basis. Can you make them (county Board) give that money to you? . . . have to negotiate with them to get it."
"I will be able to give you your tax revenues per child vs Baldwin County . . . see where you're going to fall. The chargeback, I guess, is going to hit you a little harder than the county as a whole. What's chargeback? When you get state money, you have to ante-up to play in the state school funding system (equivalent amount of money that 10 mils of ad valorem tax will generate in the school tax district) . . . you have to put that amount forward . . . then the state calculates how much they feel (according to state law) should be spent (Foundation Program). A bad situation in this regard . . . (state) tells you how many teachers, what salaries, fringe benefits, how many text books, etc.--and requires you to budget that money . . . then may turn around, declare proration . . . and don't send you the money!"
Dr. Harvey went on to explain he doesn't include "federal money" the new system could receive is his calculations--because of their uncertainty: "Lord only knows what the Feds are going to do-- its in and out . . . targeted . . . not going to send it to you without (lots of) strings attached."
Mayor Kant asked if referendums (citizens voting for/against) were always required.
Dr. Harvey: "No new property tax can be levied in Alabama without authorization. You can do the first 5 mils on Council action alone . . . do the next 7.5 mils on a referendum (city voters) you call. To go beyond that will take constitutional authorization (State Legislature).
If there's a desire for added excise, franchise, privilege, license, etc., taxes . . . city councils can do anything they want to . . . just a matter of you doing it.
Are there any school sales taxes? No; but there are sales taxes for schools.
(It) puts you in a position a lot of city councils don't like to find themselves in. . . want to provide funding for a (quality) system . . . in top 10 in state . . . then find out on basis of the 12 mils (county ad valorem tax) . . . (Its) hard to do.
Baldwin county is probably the 5th richest county in the state . . . you shouldn't have a money problem . . . if you folks had 30 mils of property tax . . . that's why we have the state revenue department working with your Revenue Commissioner right now. So that might be a very difficult thing, but . . . may very well be something you have to consider doing (raise property taxes)."
Harvey went on to talk about the benefits of annexation for bringing in more revenue: "Annexation brings in revenue but also brings in more kids. Political boundaries affect a school system . . . a balancing act . . . quickest way to get resources . . . annex valuable property that has no kids. Its a cold (financial) fact . . . but the more able students . . . fewer with learning disabilities . . . key to having a better system. . . stay away from (annexing) apartment complexes . . . valuable commercial property better . . . get tax revenues but don't bring in more kids . . . a cold hearted situation.
Homewood . . . annexed a valuable commercial/industrial corridor . . . down Lakeshore Dr. (a Wal Mart, Sam's Club, etc.) . . . get money with no new kids . . . have gotten much wealthier by picking up huge tracts of commercial and industrial property . . . you all know . . . homes are taxed at 10% (rate of total assessed value) and bring in kids . . . commercial is 20% and brings no kids (when annexed) . . . may get more sales tax out of them too."
Bob Callahan observed: "Most of the growth is occurring to the east and south of town," and promised to get Harvey the population data he needs.
Dr. Harvey: "Its a complicated situation."
[Publisher's Notes: No mention was made how the proposed new 1 cent county sales tax would affect a new city system (should voters approve it Mar. 23rd)]
to be continued