Mobile Proposes to Make Up Loss of Revenue to Schools that May Result from Annexation

Aug 25th, 2008

Mobile Mayor Sam Jones said Monday that if the city’s upcoming annexation initiative is approved by voters in four separate areas, the city will take the necessary steps to guarantee that the school system does not lose one-cent in revenue.

Terms of the City’s Agreement would include:

FY 2008-2009: The City of Mobile will offset dollar for dollar any loss of the half-cent sales tax revenue (earmarked for education);

FY 2009-2010: The City of Mobile has invested $33.5 million in ThyssenKrupp which will generate an estimated $14 million per year to the school system. A significant portion of this revenue stream will be generated in 2009. If the TK property taxes are inadequate to offset the half-cent loss, the City of Mobile proposes to make up the difference;

FY 2010-2011: The full TK revenue stream to the schools should be on line by 2010, creating six times the amount of the half-cent sales tax loss. The City of Mobile will continue to guarantee no tax loss to the schools for a full five years after annexation;

Year Five: In addition to the TK property tax revenue, the schools will receive 8 new mills in property tax revenues from the newly annexed areas.

In addition, Mayor Jones asked the members of the Mobile County School Board to join the City of Mobile in requesting local legislators to allow a county-wide vote on equalizing the amount of property taxes paid to schools. Today, residents in Mobile pay 8 mills more than people in the unincorporated areas for the same school system. This is unfair to citizens of Mobile, therefore this inequity should be addressed by our legislators.

Further, Mayor Jones requested the School Board members to join in asking the local legislative delegation to pass a law eliminating the abatement of the portion of property taxes earmarked for the school system in the newly annexed areas. The legislature has already done this for economic development projects.

“It is our goal to treat our citizens, especially our children, fairly when it comes to annexation,” said Mayor Jones. “We ask our legislators to help us.”

The City of Mobile has proposed annexation votes by voters in Theodore, the King’s Branch, Dominion/Wellington and Windmill subdivisions. The Mobile City Council will take action on a resolution Tuesday, August 26, which calls for an annexation election in late September or early October.