Dallas County half-cent sales tax bill loses support

Published 10:03 pm Wednesday, March 21, 2018

A bill in the Alabama Legislature to replace one half-cent sales tax in Dallas County with another one to benefit the county school system appears to be dead.

State Rep. Prince Chestnut has decided not to support the bill after the Selma City School Board passed a resolution earlier this month opposing the bill.

“As long as there wasn’t an issue, I was prepared to vote for it, but when I saw that one board took official action to be in opposition to it, I said I can’t support it,” Chestnut said.

Senate Bill 372, which was written by Sen. Hank Sanders, would rescind and replace a half-cent sales tax already on the books that was passed by the Dallas County Commission in September 2012. Sanders said he “strongly” supports the bill, but he said bills levying a tax must go through the House of Representatives first.

“I support this strongly because we started out trying to solve a problem,” Sanders said. “We all met months ago to try to work through it and thought it was worked out, but everybody does what they think they ought to do.”

The Dallas County Commission passed the tax to help the Dallas County School System meet a state requirement to have at least one month’s operating expenses in its reserves. At the time, according to Sanders, the school system was facing the possibility of a state takeover, so the county stepped in and passed the tax to help build a reserve.

“Dallas County’s finances were so bad because they had so much less money coming in,” Sanders said.

“Both the Selma and Dallas County school systems have roughly the same amount of students, but the city of Selma had at that time a million dollars more than Dallas County, and they did not have all of the transportation that had to be done.”

Around two years after the tax was passed, an audit by the Alabama Department of Examiners of Public Accounts discovered there was an illegal distribution of the tax. The county school system was receiving 100 percent of the revenue, but by law, the revenue was supposed to be split between school systems equitably. That resulted in the county system owing the city system around $1 million. From that point on, the tax has been split based on student population, which results in the city system receiving more of the revenue than the county.

Senate Bill 372 would restore the original intent of the tax and split the revenue 80-20 with the majority going to the county.

Dallas County Probate Judge and Commission Chairman Kim Ballard is disappointed in Chestnut’s decision to not support the bill.

“It’s very disappointing,” Ballard said. “We met back in October, and Prince voiced his support for the bill and indicated all along that he supported it until the last week, then he flip-flopped.”

Chestnut said he did not want to be put in a position of choosing one side over the other.

“I don’t want to be in a position of choosing. I have to represent everybody. I can’t represent one group over the other,” he said.

Hattie Shelton, superintendent of Dallas County Schools, said the school system has been trying to meet the reserve requirement since 2011 and have yet to reach that goal. She estimated one month’s operating expenses to be around $2.22 million.

“We’re still struggling just to have that one month’s reserve,” Shelton said. “Right now, we just are not there. We are close, but it’s come at a cost of the minimum of everything, just doing what we are required to do. We can’t do extra resources for our students or extra resources for the schools.”

Johnny Moss, president of the Selma City School Board, said they opposed the bill because losing the funding would hurt the city system’s finances. He said the city school system is about to lose 17 teacher units and one or more principal units due to a decline in student population, which is an estimated $1.2 million in funding.

“We can’t afford to lose that money as well,” Moss said.

At this point, Ballard said there is only one option the commission has, which is to rescind the tax and put it to a vote of the people in a referendum.

“That’s the only choice we’ve got,” Ballard said. “We can recall the entire bill that would punish the city and the county and put it up for a vote by the people for 100 percent of it to go to the county.”