Key says tax increase would help schools

Published 12:00 am Wednesday, May 30, 2001

Staff Writer

Alabama’s funding for education has "never" been at the national average and school leaders are feeling the pinch now more than ever.

John Key, superintendent of the Pike County Schools, spoke to the Troy Rotary Club about this issue on Tuesday and left club members considering an increase in taxes.

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The national average is 43 percent and Alabama is known to put 23 percent toward educating the youth.

As schools face problems with proration, many have been talking about increasing property taxes.

Key said even if the state’s ad valorem taxes were tripled, they would still not be at the national average. He pointed out Alabama’s property tax is "60 percent below the national average" and six states poorer than Alabama collect more in taxes.

Key said one of the problems with ad valorem taxes is 45 percent of all property in the state is assessed as residential or agriculture, which is 10 percent of the value. Automobiles are assessed at 15 percent, commercial at 20 percent and utilities at 30 percent.

"All these things help the rich systems get richer and the poor systems get poorer," Key said.

According to Key, Alabama generates the lowest per capita tax revenues in the United States.

The state’s tax base (per capita) is $23,000, 79 percent of the national average.

"No other state is below Alabama in both taxable resources and tax revenue," Key said.

"If Alabama is going to grow, we have to do something."

Key points to the Legislature’s "unwillingness to approach this problem" because many do not want to pay more taxes.

Another problem is local funding, which is approximately 15 to 19 percent of total funding for schools.

"The last time we got an increase in local funds was 1978," Key told Rotary Club members, adding a temporary increase was made several years ago.

"All county government and school systems lack a stable base of funding," Key said. "Counties don’t have home rule, so they can’t raise revenue."

Since county school systems have to go through the county commission and the legislature to levy a tax, they often have little chance.

"We are not a local school system anymore…essentially, we are dictated by the state," Key said.

Each school system must collect 10 mills of property tax or it doesn’t get its share of state monies.

"Essentially, its taken, by the state, off the top of local systems’ resources," Key said of that money.

Pike County collects 9.7 mills plus the one-cent sales tax Key calls the "lifeblood" of schools. Troy City Schools collect 10.7 mills plus sales tax.

But, sales tax money is being lost every day to Internet sales and catalog sales.

And, as happened this year, state officials can make a quick call.

"Proration is bad enough, but it is usually not declared until mid year," Key said. "If someone cut your paycheck overnight, how would you survive?"

The answer, he said, is finding additional local resources for money and having the Alabama Legislature reform funding for schools.

He pointed out an estimated $250 million to $500 million of the Education Trust Fund goes to non-educational programs.