Special School Tax Will Need Council's Blessing (Updated)

Fairhope, Alabama

Education Committee  chairman Ken Cole at center

VOTER REFERENDUM PROPOSED

During the last city council work session Ken Cole, chairman of the city's Educational Advisory Committee, reported it is recommending to proceed with a voter referendum to form a special school overlay tax district ... to add another 3 mils to the local school property tax.

Fairhope District 6

The new district would substantially follow current boundaries of the Fairhope school feeder pattern (District 6) and only residents within would be able to participate.

All proceeds from the new tax, about $1.8 million annually, would be earmarked and spent on the five schools in the district: $365K per school.

(Three mils would add about $80 to the annual property tax for a typical Fairhope home.)


STUDY'S RECOMMENDATION FOR TOP 10

Cole said a special district was one of the five scenarios recommended by a study commissioned by the city council in 2016 (Akribos Consulting Group's study - click) to determine what it would take to put the five Fairhope area schools among the top ten in the state.

The tax revenue should be directed to math and reading instructional support since those areas were of most concern according to the 2016 study; property taxes are preferred because of their relative stability (vs. other types of taxes or fees).

Cole: "The referendum will give voters a chance to decide ... what type of schools they want for Fairhope. A special tax district will give principals what they need (for top ten)."


NECESSARY DOCUMENTS BEING PREPARED BY COUNTY

Current tax districts

Cole said the School Board's legal department is currently preparing the necessary documentation for the referendum (90% completed) ... but warned its passage may not "be be an easy task ... or popular."

Council president Burrell said he would vote to hold a referendum and asked if any council members opposed holding one, and none did; but Cole added that may not be enough. 

Cole: "The documents will require more (of the council) ... not just approving a referendum ... the council must support the new tax too."

Burrell objected: "I don't buy that. We don't have to tell the people how to vote. I'd like to say this to the Board of Education ... give our citizens the right to decide for themselves."

Cole replied quoting Winston Churchill: "Politicians are only concerned about the next election; statesmen about the next generation."

(Publisher's note: So far, no members of the council have taken a public position on the tax itself ... as far as we know.)


SCHOOL BOARD'S  APPROVAL NEEDED TOO

City EAC

School Board Representative Cecil Christenberry told the Times later that he had met with Cole, councilman Brown, and other EAC members ... and that the School Board supports the proposal to hold a referendum ... but only if the city council votes in favor of the 3 mil tax too: just voting in favor of holding a referendum will not be enough.

Christenberry said the necessary paperwork is being prepared to hold the referendum, in Fairhope and other communities in the county that have expressed interest (Spanish Fort, Daphne).

The School Board will have to vote as a body to approve the tax district and referendum too.

(Dates for when the referendum may be held were not mentioned; city clerk Lisa Hanks said she thought it it would have to coincide with a regular election cycle. )


MAYOR'S ALTERNATE PROPOSAL (UPDATE)

Mayor Wilson has been circulating an alternate proposal for about the same amount of additional funding that would not require a special election; she authorized its release.

Mayor Wilson:

"Fairhope High is ranked #3 in the State for County Schools (excluding one magnet school), however it’s ranked #20 out of the 30 top high schools in the state when city schools are included.  I think we can all agree that the City plays a big role in the quality of schools. 

As a business owner and through my foundation, funding schools has been a priority with close to $400k donated over the last 12 years. I understand how our quality of life is tied directly to the quality of our schools.  As Mayor, I want the City to do more by coming up with fair ways to better fund each school.  Council and I work for the voters of Fairhope, and since the City donates in money and appropriation a little over $1M a year, they are the ones who’ve been disproportionately responsible for the funding.   

The following funding opportunities should be considered first before we start a campaign for a 3-mill overlay.  These are much more equitable and do not need a special election. Not to mention there has been no research or plan to determine how much our schools actually need to become the #1 schools in the state.  Without this, how do we know what is the appropriate mileage? 

• City Reimbursed by BCBE: We should ask BCBE to reimburse Fairhope for the recreational expense it pays for every other school in the county. Attached is the very conservative breakdown from 2018.   should be paying = $530k. 
• County Impact Fees for Schools:  I believe the BCBE and County Commissioners would agree that imposing an impact fee for schools is the right decision now with Baldwin County being the fastest growing county ranked 13^th in the nation.  If the county imposed an impact fee just for schools, the three municipalities currently imposing an impact fee could also collect that same % inside the City limits.  Since this fee only affects new development and remodels which increase capacity (started this year), The most obvious revenue source should come from those who have the immediate impact on our schools.   A new study would better determine an estimate, however, if we just use the revenue collected inside the city limits ~$1M+/annually and only 10% of this would equal $100k/yr and this doesn’t include outside the city limits. The study may come back with a bigger % for impact for schools.  This is our current structure for other impact fees.
• Use a % of Utility Profits:  The only utility paid by most in our feeder pattern would be water.  Because the amount of our utility profits needed to fund government services has been reduced from over 50% to around 5%, the net profit in all utilities will greatly increase and be able to afford infrastructure upgrades without borrowing money.  We could easily afford $100k/year for the next 5 years and a lot more after upgrades and capacity completed.
• Use a % of Sales Tax: City debt required 25% of sales tax to help payoff.  This June all city debt will be paid in full.  If we considered 10% of sales tax to fund schools this would be around $900k/yr.  Sales tax has been steadily increasing every year. Even if levels off or decreases a little, new online taxes are coming to the state which will add to the total every year.  Fairhope’s sales tax comes mostly from shoppers outside our city limits.   
• Continue Appropriation: around $350k

And none of it would require a special election.

After this funding is in place, we can look at the tax overlay to make up an shortage needed to become the #1 schools in the state." 

Mayor's new proposal

City's current school expenses (Mayor)