After Baldwin County’s city school systems called for legislative efforts supporting a countywide sales tax for schools, county and city education leaders have voiced their opinions on the tax and what they consider to be "fair" and "unfair."

A law currently in place, referred to as the 40% 1-cent sales tax, authorizes a “special county tax” to be broken down and distributed among different county organizations and improvement funds. Part of the monies generated from this tax go to Baldwin County Public Schools (BCPS), and superintendents of the city districts in Gulf Shores and Orange Beach want it to fund their systems, too.

WHAT IS THE 1-CENT SALES TAX?

Orange Beach City Schools (OBCS) Superintendent Randy Wilkes told Gulf Coast Media the tax is taken from 1 cent of any purchase from a store in Baldwin County, whether it's at a “mom and pop store” or “Tanger outlet malls or McDonald’s.” That cent is then broken into percentages.

According to the law, before any distribution occurs, 2% of the new revenue is sent to Baldwin County Juvenile Court. Then, 1% of all net revenue collected is for the Baldwin County District Attorney’s Office. The remaining amount of the 1-cent percentage is again divvied up.

The law mandates 40% of the remaining funds go to the Baldwin County Board of Education (BCBE), 5% goes to Coastal Alabama Community College, 55% goes to the county's general fund with at least 20% of the proceeds going to road and traffic infrastructure improvements and maintenance.

“It’s hard to think of a penny being broken down 60% and 40%, but after a few minutes, it starts to add up,” Wilkes said.

According to a joint prepared statement from OBCS and Gulf Shores City Schools (GSCS), there is “$28 million generated annually from this tax.”

The section of this law was most recently updated and reapproved on Jan. 3, 2017, according to its text, to the current status, where originally 40% went to the county general fund and 55% went to the the county school district, which at that time encompassed every school in Baldwin County.

GSCS and OBCS split from the county system in 2019 and 2022, respectively.

GSCS Superintendent Matt Akin said that’s why the city schools are pushing for new legislative action. Because the code of law, originally written in 1983 — before Orange Beach was a city and GSCS and OBCS separated — is not bad but simply needs updating, he said.

After all, the law was written when the county only had one board of education, he said.

Four companion bills have been introduced by state Sen. Chris Elliott, R-Daphne and Rep. Frances Holk-Jones, R-Foley, in favor of Gulf Shores and Orange Beach’s school tax funding. Bills related to the distribution of taxes gathered for schools in Baldwin County include House Bill 420, Senate Bill 135, House Bill 421 and Senate Bill 136.

HB420 and SB135 are essentially the same, asking for the 1-cent tax collected to be distributed based on the average daily membership of schools. This is based on the “just pure enrollment,” Wilkes said.

Gulf Shores Board of Education President Kevin Corcoran said this is common among most Alabama counties. Wilkes agreed, saying this is often used where city school systems and county school systems both receive funding from county taxes.

HB421 and SB136 are based on the tax amount collected within each municipality, and that would go back into that municipality’s school system. So, the more 1-cent taxes collected in a city the more that school system would receive in funding.

Corcoran said depending on which bill you look at, the cities could be getting anywhere from $3 to $5 million of the $28 million.

These bills, if they are passed, would be added as Section 45-2-244.078 in the Code of Alabama.

WHY IS THIS IMPORTANT NOW?

On March 24, GSCS and OBCS sent out a joint statement on legislative efforts to allow the city schools to receive a portion of the 40% 1-cent sales tax, which “exclusively fund(s) students in Baldwin County Schools.” The statement says the cities of Gulf Shores and Orange Beach contribute 17% of the $28 million generated from the tax, from which they receive “zero funds” for.

"Our communities have made significant investments in our students and their future," Wilkes said. "Ensuring that education tax dollars benefit the children in our cities is the right and equitable course of action."

"This is an issue of fairness," Akin added. "Every community in Baldwin County deserves its fair share of funding to support public education, including Gulf Shores and Orange Beach.”

Shortly after the city’s announcement, a statement from BCPS Superintendent Eddie Tyler was sent out. He said BCPS “spent years negotiating” with the cities on the details of the city schools’ separation from the county school system.

“Asking to change the terms and take away money from Baldwin County students is simply unfair,” Tyler said.

In a video posted by the city districts, graphs were used to show how “less than one half of one percent” of BCBE’s budget would be “taken” with $3 million received from one set of bills. He said this equals $2 million for GSCS and $1 million for OBCS, which would have “significant impacts” on the city schools’ budgets.

Tyler said, “The beach communities are wealthy, and they made their choice to separate, knowing how the money would be divided.”

At the March 24 Gulf Shores City Council meeting, Akin addressed this, saying it couldn’t be further from the truth.

“Almost 50% of our students qualify for free and reduced lunch, which means they are living at basically a poverty level,” Akin said at the meeting.

Corcoran told Gulf Coast Media that 43% of Gulf Shores students qualify for free lunches, but to avoid any stigma, every student gets free breakfast and lunch.

Wilkes told Gulf Coast Media that Orange Beach has beaches, but he would not consider it a “beach community.”

“To say that our kids live at the beach and our toes are in the sand all the time it is absolutely incorrect,” Wilkes said. “Very few of our kids live on the beach, and we’ve got one out of four of our kids, they live in poverty.”

He said the city is made up of white-collar and blue-collar people who all “roll up their sleeves and work extremely hard.”

According to state report card data, 59.4% of BCPS students are "economically disadvantaged," 48.4% of Gulf Shores students and 26.7% of Orange Beach students are.

To address the choice to separate and how the money would be ultimately divided, Elliott provided Gulf Coast Media with an opinion piece on March 26. In it he spoke on how he advised GCSC and BCPS in 2019 when Gulf Shores separated from the county school system.

Elliott said Gulf Shores has been “very interested in updating” the specifics of the sales tax since they separated.

On the agreement between the school systems, Elliott said, “we agreed and we determined that once certain debt payments made by BCBE on school properties in Gulf Shores were satisfied, I would introduce legislation to update the distribution to include all schools county wide. Those debt payments were satisfied in December of 2024.”

This is why he and Holk-Jones introduced their legislation at the beginning of this year and not sooner.

Akin, Gulf Shores' superintendent, told Gulf Coast Media the agreement was not in writing but was a verbal agreement between Tyler and Akin at the time. He said he assumed Tyler would remember the deal when the five years were up, as decided by the superintendents and Elliott.

Tyler said BCPS has received “overwhelming support” from a “majority of legislators” and other Baldwin County officials and leaders, “except for two legislators."

“As a result of their support, we do not think this legislation will pass, but we will continue our efforts to oppose any removal of funds from the county and encourage the beach communities to raise additional taxes from within their communities,” Tyler said.

Elliot is Baldwin County's only senator who represents both the city and county districts, with his District 32 spanning Gulf Shores, Orange Beach and Perdido Beach up through Foley to Fairhope, Daphne and Spanish Fort. Holk-Jones also represents the southern portion of Baldwin County, with her District 95 in the House spanning the island, Elberta, Foley and Bon Secour.

Corcoran and Akin made an announcement at the March 24 Gulf Shores council meeting concerning the new bills and the support they would need from the city. They showed the council a video of both city school board presidents discussing the new bills and the reasoning behind them.

Orange Beach Board of Education President Randy McKinney said in the video, “The city schools are public schools, and those children deserve the benefit from that sales tax just like everyone else.”

At the meeting, Corcoran said, “Only thing I see Mr. Tyler getting right (in his statement) was it is unfair.”

Elliott’s opinion piece addressed the statement from Tyler and “the lessons it may be teaching our children.”

“Concepts of fairness and sharing are important, taking from those you perceive to be more ‘wealthy’ because you determine you ‘need’ the money more have no place in local education funding discussions here in Baldwin County and only serve to further divide us,” Elliott wrote.

He goes on to talk about the law pre-dating the separation of the city school systems, saying the intention of the revenue distribution is to go to students in “all Baldwin’s communities, not just one system.”

WHAT WILL HAPPEN NEXT?

One set of companion bills, 420/135 or 421/136, will need to be approved within the Alabama House and Senate to go into effect Oct. 1 as detailed in each of the bills.

Before it can get to that level, one of the bill sets requires nearly unanimous approval from the 10 members of the Baldwin County Legislative Delegation.

In one of the videos from the city schools, McKinney, Orange Beach's board president, states, “It seems like a slam dunk, but that’s not looking so good right now. Some of the delegation members are opposed because it doesn’t directly benefit their district.”

Currently, Elliott and Holk-Jones are the only legislators openly in support of the bills they introduced.

Both city schools in their videos encourage parents along with Gulf Shores and Orange Beach residents to reach out to the legislators, with contacts listed in the videos found on the city schools’ Facebook pages and the GSCS website.