Vote No on the Sales Tax Increase
Posted by ReactionaryMadison County Tax Assessor Fran Hamilton wants you to know Madison County Property Tax Facts.
Huntsville pays 27.5 mills school tax (Huntsville City Schools); Madison pays 27 mills school tax and Triana pays 25 mills school tax for their combined school system (Madison City Schools). Rural Madison County, Gurley, OXR, and New Hope pay 16 mills school tax for the Madison County School System
The Madison County Schools are the ones pushing for the sales tax hike. I don’t doubt that they need more money for County Schools, but if Madison County School Board members need money so badly, they should look to their own property tax rates before raising Huntsville, Madison, and Triana sales taxes. Note that Madison County (5 1/2 %) also pays less in sales tax than Huntsville or Madison or the other municipalities (8%).
Huntsville City Schools don’t appear to need the sales tax money. IIRC about half of the City schools are at 30% - 50% capacity (although Grissom is at 140%). Huntsville City Schools need to better manage what they’ve got and consolidate / close some underused schools. Note that they’re fixing to think about looking at it.
Madison City Schools may need more money, but they haven’t exhausted other remedies yet. Madison City should get the Legislature to create TIFs to fund their school construction. Plus, they could stop annexing Limestone County land that they can’t support. Planning to build schools in Limestone County with Madison County sales taxes is just wrong.
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May 29th, 2008 at 8:53 am
I just heard the Madison County GOP Executive Committee WVNN sucky radio ad opposing the sales tax increase.
Out of all the reasons to oppose the sales tax, they focus on noting that BRAC people will benefit right off without having paid into the system.
The ad sucks.
Plus, it’s poorly presented - is it a rule that the guy’s name and address are mentioned first? On a bright note, the voice talent sounds like the same girl who did the ‘hard to stop a Trane’ commercials, which I really liked.
May 29th, 2008 at 9:22 am
Mo Brooks on the Sales Tax increase:
There are two sides to most public policy debates. The June 3 half-cent sales tax referendum is no different.
The positives from a sales tax increase are obvious: higher salaries for school personnel and, perhaps, capital improvements, building maintenance, books and supplies, and the like. Not so obvious are some of the negatives.
In my view, a countywide sales tax’s negatives outweigh its positives. Hence, I oppose raising Madison County sales taxes another half cent (to 8.5% in Huntsville and Madison & 6% in rural Madison County). I include fourteen talking points I hope you will ponder as you decide how to vote.
Please forward this memo to whomever you wish.
BACKGROUND
A 1/2 ¢ countywide sales tax increase will take $21+ million from Madison County families and transfer it to the Huntsville Board of Education, Madison County Board of Education and City of Madison Board of Education. Contrary to what you might hear, the sales tax increase is not restricted by law to capital improvements. It can be used any school purpose (including pay raises).
POINTS TO PONDER
1. Taxes on Madison County Citizens . . . for Limestone County Schools. It used to be that countywide sales taxes were used 100% for Madison County services. That is no longer true. Both Huntsville and Madison have annexed thousands of acres of land in Limestone County (Huntsville now borders both Athens and Decatur). Money obtained by these school boards can be spent anywhere in their municipalities . . . including Limestone County.
The City of Madison has publicly stated that, if this sales tax on Madison County residents passes, Madison will use it to build a $60+ million high school in Limestone County! Similarly, Huntsville will use sales tax proceeds to fulfill commitments to build schools in newly annexed land in Limestone County.
It is neither right nor fair to require Madison County residents to pay taxes to build schools in Limestone County for Limestone County residents who don’t pay the sales tax. Madison County residents should not be forced to subsidize Limestone County education costs.
If Madison or Huntsville need more education money, then the proper tax is a city tax (not a Madison County tax) because a city tax makes city residents living in Limestone County contribute equally for the education services they receive.
2. Sales Taxes Are Unfair.
a. A countywide sales tax discriminates against Huntsville residents. Although Huntsville residents make up more than 50% of Madison County’s population, sales tax distribution formulas dictated by the legislature give Huntsville Schools less than 50% of sales tax collections (roughly $10 million a year on $21 million a year collected). It is not fair to require Huntsville residents to pay most of the sales tax yet get back less half of what is paid in.
b. A citywide sales tax is similarly unfair to rural residents. Huntsville schools do much better by a sales tax passed by the City of Huntsville. A City of Huntsville sales tax generates $16+ million a year for Huntsville Schools (versus $10 million a year from a county-wide sales tax). But a citywide sales tax is unfair to rural residents because they pay the tax (when they shop in Huntsville) but get nothing back in return.
c. Property taxes are fairer than sales taxes. Property taxes are paid exclusively by those who enjoy the services provided from property taxes. Hence, if taxes must be raised (which is another debatable issue), property taxes are a much fairer tax than are sales taxes.
3. A “One Size Fits All” Solution (a Countywide Sales Tax) Does Not Fit All Needs (of three different school systems). Sales tax advocates paint with too broad of a brush. A countywide sales tax assumes one size fits all. It does not.
a. Huntsville Schools. Huntsville schools operate at 60% capacity. Hence, Huntsville schools can (with proper school zone adjustments) absorb 13,000+ students without building a single classroom! That is enough classroom space for every new BRAC student.
Not only are Huntsville schools enjoying record high tax collections, the Madison County Commission and City of Huntsville have chipped in 52% of the cost of new, replacement Lee and Huntsville high schools (which, ironically, collectively reduce school system capacity) and a new Columbia High and Providence K-8.
Notwithstanding the foregoing, some city leaders insist higher taxes for Huntsville schools are needed. If so, Huntsville’s elected leaders can push their own Huntsville-only taxes that specifically meet those needs rather than a countywide sales tax.
b. Madison Schools. Madison has the exact same powers enjoyed by Huntsville. If tax increases are needed, Madison can raise sales or property taxes on Madison residents for Madison schools. Plus, the City of Madison can also seek school construction partnership arrangements with the County Commission (as was done by the City of Huntsville).
c. Madison County School Board. The Madison County School Board has to make do with less revenue for its school children. Hence, they have the best case for higher tax rates. But there is a reason for that. Rural Madison County residents pay substantially lower sales taxes (5.5% versus 8% in Huntsville & Madison) and lower education property taxes (16 mills versus 27 mills, meaning city residents’ education property taxes are 69% higher than what rural residents pay).
If rural residents want more money spent on their schools, they have every right (without burdening the rest of us) to:
(a) raise rural-only sales and/or property taxes (to reduce the gap between what rural residents pay versus what Huntsville and Madison residents pay);
(b) incorporate and form their own municipality (thus giving them the right to have their property and sales taxes at any level they want);
(c) merge into a municipality that has higher taxes;
(d) move into a municipality (where taxes are higher and schools better funded).
It is remarkable people move into rural Madison County for lower tax rates and then complain about the reduced services they get . . . because they refuse to pay higher taxes.
I don’t blame rural residents for trying to get other people to pay for their children’s education (via a countywide sales tax in which Madison and Huntsville residents subsidize the rural school system) but that still does not make it right or fair. If rural residents want more money for their schools, they should pay for them, not others who don’t use their schools.
4. “Those who do not remember history are doomed to repeat it.” Higher tax advocates argue that a catastrophe will ensue if sales taxes are not raised. These are the same people who supported 2003’s $1.4 billion tax increase. Remember their 2003 threats? If we don’t have a $1.4 billion tax increase, children will be illiterate, schools will go bankrupt, schools will close, thousands of teachers will be laid off . . . and (the “worst” threat of all!) there will be no high school football. Did any of those “chicken-little” fears materialize? No, not a single one! Just as pro-tax forces were wrong in 2003, they are wrong now. The key is for the citizenry to remember history . . . and learn from it.
5. Record high tax collections. Local school boards enjoy record-high tax collections. Anyone who looks at their property tax bills knows property taxes are rocketing upward. The first step to understanding the illogic of higher tax proponents is to resolve the conflict between (1) record high tax collections and (2) claims of having insufficient funds to properly educate our children. When cause and effect are understood, truth is revealed.
6. The Cause of the Problem. In light of local schools enjoying record-high revenues, it should be clear to even the most uninformed that funding is not the cause of whatever problem we face. Mismanagement and misallocation of resources is the cause of the problem. And, if we don’t fix the cause of the problem, then you can soon expect another demand for higher taxes. Consider:
a. The Alabama Legislature (the primary cause of the problem, including Madison County’s legislators) simply does not have the public’s interest at heart.
i. Pay Raises versus Classrooms and Teacher/Pupil Ratios. The Legislature lacks the backbone to spend public school funds on what parents want and children need: more schools, more classrooms and more teachers (to lower teacher-pupil ratios). The legislature’s priorities have been to spend record revenue increases on pay raises: 6% in 2005, another 7.5% in 2006, and yet another 7% in 2007. That totals 21.9% in pay raises in three years! I know of no other group of employees in the private or public sector who have done better (excluding, of course, legislators who voted themselves a 62% pay raise in 2007).
While pay raises are good things (my mom is a retired Lee High teacher and my wife is a math teacher Whitesburg Middle School; so we’ve enjoyed them), pay raises are not the only things schools need. Our desire for pay raises must be balanced against our need for more schools, more classrooms and more teachers.
ii. Unfunded Mandates. Without going into all of the details, the Legislature repeatedly mandates larger school system bureaucracies to handle even more red tape and paperwork, but neglects to provide additional funding for the mandates. Hence, tax dollars are diverted from the classroom to central office staffing.
b. Local School Boards waste tax dollars. Employees who should be fired are given leave with pay (meaning they do no work but get full pay for it) or are promoted to the central office. Why are many Huntsville schools substantially below capacity and not closed or consolidated? The list goes on and on. Tax increases reward inefficiency, rather than prevent it.
c. The U.S. Congress. Congress micromanages local school systems . . . but abhors providing the funds to pay for those mandates. The “No Child Left Behind Act” is but one example. Federal government rules mandate extensive paperwork and red tape, which means more central office staffing. Money that could be spent on teaching children is instead diverted to filling out paperwork.
7. A sales tax increase will not correct the cause of the problem. A sales tax increase encourages legislative and Congressional unfunded mandates because tax increases give these elected officials a “pass” and don’t hold them accountable for the damage they do to schools. Similarly, tax increases encourage school boards to be wasteful by not holding them accountable. You don’t cure a disease by treating the symptoms. You cure a disease by curing the cause.
8. Sales Taxes Are Regressive. Many Madison County families are low income or are living on fixed income. It is bad enough that inflation, food and gasoline prices are skyrocketing. It is worse when higher sales tax advocates brush aside the damage sales taxes do to the least among us. No tax increase hurts poor families more than does a sales tax.
9. “But we promise the sales tax money will be used for new schools!” Again, those who do not learn from history are doomed to repeat it . . . and that’s what pro-tax forces are banking on!
In the 1980s Huntsville voters passed a property tax referendum based on assurances by then-superintendent Mary Jane Caylor (and the school board) that the funds were earmarked for school construction. Yet, in the 1990s the school board diverted the property tax revenue to pay raises (thus contributing to current day maintenance and construction revenue shortfalls).
I will never forget the day Councilwoman Sandra Moon and I went before the school board and pleaded with it to not divert property taxes “earmarked” for capital improvements. We reminded the Board of its and the superintendent’s pledge. Our pleas fell on deaf ears. The Board then diverted construction money to pay raises.
Similarly, the Madison County Commission passed a sales tax in 1985 because it was “needed” for school construction . . . and that’s where it went until it was diverted to pay raises and more central office staffing.
Anyone who believes another higher sales tax will only be used for school construction needs simply has not paid attention to history.
10. Doesn’t BRAC dictate a need for higher taxes for new schools? No.
BRAC does not require tax increases. BRAC jobs bring higher income families that live in higher-priced homes that produce higher than average per-capita property, sales and income taxes! Higher-taxes paid per family means higher per student funding. Hence, over time, there should be plenty of money for new schools. We just need to be patient.
TAX INCREASE HARMS - GENERALLY
11. Tax increases Harm Families. Higher taxes undermine the family unit by forcibly taking from parents the money needed for health care, college tuition, and basic necessities such as food, shelter and clothing. The more taxes we take from families, the worse our standard of living, the more often both parents have to work to make ends meet (thus diminishing needed parental child care), the more dependent on the government families must become.
Mo Brooks: “Families and individuals are the best hope for solving society’s problems. Bigger government is not the solution (and is often the problem). Higher taxes weaken families. That hurts all of us.”
12. Tax Increases Harm Free Enterprise and Cost Us Jobs. Higher taxes undermine our free enterprise system by robbing people of the capital needed to expand businesses and compete, succeed and provide higher paying jobs for Alabamians. It is no accident that the Kennedy, Reagan, and Bush tax cuts were followed by economic expansion.
13. Tax Increases Harm Churches and Charities. Higher taxes undermine churches and charities by cutting citizens’ disposable incomes, thus making it increasingly difficult for people to tithe to churches and donate to charity. Less money for churches and charities mean less good done.
14. Tax Increases Contribute to Higher Divorce Rates. What is the #1 cause of marital stress and divorces? Money. What happens when government forcefully takes more of a family’s take-home pay? The family has less money to meet family needs and all too often the government has, once again, created more problems than it has solved. This time the problem is a higher divorce rate (which, of course, results in more poor children dependent on the government for support, which, of course, creates another demand for tax increases). It takes only one straw to finally break the camel’s back. Higher taxes are many straws.
CONCLUSION
I hope you found the above information thought-provoking and useful. As for me, it is enough to convince me that the negatives of a sales tax increase outweigh the positives. Hence, I have voted “No” as a Madison County Commissioner and intend to vote “No” to higher sales taxes on June 3.
Sincerely, Mo Brooks
May 29th, 2008 at 11:15 am
Taxes taxes taxes…
The good people of North Alabama are being told they need to raise their taxes for education. Reactionary at Flashpoint offers a good commentary on the convoluted thinking that always asks for more money from citizens. While you may not…
June 2nd, 2008 at 7:07 am
[...] I have been covering this issue for almost two years and have consistently opposed it. Here is a copy of an email from Mo Brooks describing why you should vote NO. Here are a few of the many, many posts I’ve written on [...]