The Baldwin County Public School system receives 100% of the education portion of a one-cent sales tax that the state legislature levied in 2017.
The education portion of the tax is 40%. The other 60% is split between Juvenile Court for Baldwin County, the Baldwin County District Attorney's Office, Coastal Alabama Community College and a general fund for road and bridge construction and maintenance overseen by the Baldwin County Commission.
However, State Sen. Chris Elliott (R-Josephine) said that the 40% that goes to public schools should be shared with the two new school systems within the county.
The Gulf Shores City School System separated from the county in 2019, and the Orange Beach City School System followed in 2022.
Elliott said the systems should get their share similarly to how the Baldwin County Commission's penny tax is allocated. However, since the legislature enacted the tax through Title 45, the rules are very specific and must be changed by the legislature.
"As a matter of fact, the city of Gulf Shores and their school system sued the County Board of Education and took it all the way to the Supreme Court," Elliott told 1819 News. "The Supreme Court, I think correctly, decided that the law is specific. It says it goes to the County Board of Education. And so, what we have is two new school systems that have come on the scene with no clarification in that state law."
"Currently, the money in Orange Beach and Gulf Shores that is being collected is going to the county school system and Orange Beach and Gulf Shores kids are getting nothing, even though that money is collected in Orange Beach and Gulf Shores," Elliott added.
Elliott says the matter is controversial because the county school system would lose about $5 million annually. However, he said that is a small amount compared to the system's half-a-billion-dollar budget.
Further, when the school systems pulled out of the Baldwin County Public School system, Elliott said the county system benefited financially due to the formula the Alabama Foundation Program uses to determine funding for each school district. While student population is considered, real estate wealth is also considered, meaning communities with less wealth rely on the state for a larger share.
"The foundation program subtracts what we call the '10 mil match," Elliott explained. "So, it subtracts the value of 10 mils of property tax from whatever that teacher unit calculation is. So, the poorer an area is, the more state money they receive per teacher unit."
"Orange Beach and Gulf Shores are the two wealthiest districts in the state," he said. "As a matter of fact, Gulf Shores is last on the list and Orange Beach doesn't even make the list. They receive no money from the state foundation program."
Elliott said once the real estate value decreased for county schools, their state share increased significantly.
"The amount of money coming to the Baldwin County School System went through the roof to the tune of $40 to $45 million every single year – more than what they were getting before," said Elliott. "And so, while this change in the law will result in a $5 million or so or less, the county board of education is still $40 million ahead by these two systems leaving."
There are two options for determining each school system's funding. The tax could be split by the location where the tax dollars are collected. An estimated $2 million would go to Orange Beach and $3.1 million to Gulf Shores.
The other option would be to collect the tax countywide and split the funds by student population. An estimated $1.2 million would go to Orange Beach and $2.5 million to Gulf Shores.
Elliott has drafted a bill and will continue to hear from local constituents before pre-filing for the 2025 Legislative Session.
"It's tough when you represent three different school systems and they have very different needs," Elliott added. "And everybody looks at Orange Beach and Gulf Shores and says, 'Hey, we're wealthy areas here. Well, if you look at Gulf Shores in particular, all its schools are Title I schools; They have 50% or more free and reduced lunches in Gulf Shores. Orange Beach is around 30%."
"So, there may be big houses down here and there may be second homes and all these types of things, but at the end of the day, the folks that live here are just regular, just like the rest of the county."
The law requires the tax money to be spent on capital improvements, capital construction and maintenance purposes.
To connect with the author of this story or to comment, email erica.thomas@1819news.com.
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