Madison, Alabama will be getting two brand new schools and upgrades to two others after voters overwhelmingly supported a property tax referendum in a September vote.
Voters in both Madison and Triana approved a property tax hike to the millage rate of 12 mills by a whopping 71-29 margin.
The tax increase will be approximately $120 annually per $100,000 in home value, meaning a home valued at $250,000 would see a property tax increase next year of about $300.
With this new revenue, Madison City Schools (MCS) will build a new elementary school and a new middle school while providing renovations and expansions to both James Clemens and Bob Jones High Schools.
Remaining funds will be used for improvements both in the classroom and in school safety.
Already one of the top-ranked school districts in Alabama, MCS has seen a rapid rise in enrollment and pushed for the tax increase to build the new schools to accommodate that growth.
According to MCS, in the past four years, enrollment has grown by 1,602 students and an additional 600 new students are expected to be matriculating in the school system in 2019-2020.
“It is not easy asking for a tax increase, but this was necessary to continue the world class education Madison City Schools delivers and citizens have come to expect.” MCS Superintendent Robby Parker said in a statement. “I will get with the appropriate staff to begin the process of moving forward with site preparation, architectural design and construction plans. We want to open the elementary school in 2021, the middle school by 2022 and press forward with the new PreK Center at the West Madison Elementary campus and expansions of both high schools.
“I am both humbled and grateful to the Madison community for its unwavering support for our schools. Every dollar used from this ad valorem increase will be a dollar well spent.”
The new tax is expected to bring in at least $8 million annually which will be used to leverage more than $100 million in construction bond funding. Parker’s strategic plan calls for $34 million to be spent at the new elementary school, $49 million at the new middle school, $20 million at the two high schools and about $3-4 million for additional operational support.
As Parker mentioned, West Madison Elementary will be repurposed into a PreK Center for the entire school district.
While the new rates go into effect immediately, they won’t be seen on property tax bills until October, 2020 because Alabama collects its property taxes in arrears. Approval of the tax increase is enough to allow MCS to borrow the money and begin construction.
Despite it’s ranking as one of the best school districts in the state, MCS still ranks below the state average when it comes to per-pupil expenditures. Of the 138 public school systems in Alabama, MCS ranks 87th with an average per-pupil expenditure of $9,432. The state average is $9,894. By comparison, Mountain Brook City Schools ranks No. 1 in the state in per-pupil expenditures at $13,445.
Per-pupil expenditures are determined by the amount of local tax support for the schools plus the number of students living at or below the poverty level, which qualifies school districts for additional federal dollars.
With the rapid growth in enrollment, MCS has been forced to commit more of its funding to pay for the schools themselves than most districts.
All told, it would take an additional $5 million in funding for MCS just to reach the state average. Without that sort of revenue stream available to the school district, this new tax will allow the district to pay for the new schools that are necessary to prevent overcrowding without having to divert financial resources from instructional areas.
When comparing the top five ranked school districts in Alabama, residents in Madison and Triana pay far less than the others (numbers are the current millage rate):
- Mountain Brook 52.9 mills
- MCS 27 mils (39 mills with the new increase)
- Homewood City 37.5 mills
- Hoover City 46.1 mills
- Vestavia Hills 52.05 mills.
Mountain Brook is currently seeking a 10-mill increase in its property taxes while Hoover City is also looking to raise its millage.
The enrollment growth of MCS is third-fastest in the state, making the need for the new buildings critical to sustained school success.
This isn’t something that just cropped up either. The school board has been trying to address the potential for overcrowding for some time now.
It initially pushed for a tax referendum back in 2012 but it never made it onto the ballot. Without help from the legislature, the board turned its attention toward slowing down city annexations, curbing the number of subdivision approvals, rezoning changes and interest costs on refinancing. Additionally, it became more vigilant with address verification and enforcement to ensure only students who actually lived in the district attended their schools.
But even that wasn’t enough.
Had this latest tax referendum not passed, the district would have been left with no choice but to rezone the school district extensively with no grandfathering allowed, increase class sizes, cut programs at the schools and consider less-desired alternatives like either attending school year-round or doing split-session schooling.
As the summer is drawing to a close, multiple opposing factors and trends are competing to define the direction of the real estate market. After the Federal Reserve lowered its benchmark interest rate on July 31, 30-year mortgage rates continued to decline, approaching all-time lows last seen in 2016. Yet most experts agree these reductions are unlikely to bring sufficient relief, at least in the short term, for first-time home buyers. The lack of affordable inventory and the persistence of historically high housing prices continue to affect the housing market, leading to lower-than-expected existing home sales at the national level.
Read more from the Greater Chattanooga REALTORS®: “August Housing Market Statistics.”
Last year, August marked the 92nd consecutive month of year over year declines in inventory. After seven months of increased supply, central Ohio now has five months of year over year inventory decreases under its belt again this year.
For more details, see “Central Ohio Housing Report – August 2019” from the Columbus REALTORS®.
For the month of July inventory remained low, hampering the number of homes sold. Options for buyers are limited. While the average sale price is down from June 2019 ($237,350), prices are up from July 2018 ($214,711).
The number of days homes are on the market has remained steady at 48 days, only one day less than a year ago.
Mortgage rates continue to fall. Freddie Mac reported the national average commitment rate on a 30-year conventional fixed-rate mortgage was 3.6% down from 3.85% in June. This .25% decrease could have significant impact on the amount of interest paid over the lifetime of the loan.
The recent governor’s veto raised taxes on middle-class Kansans. Federal tax reform in 2017 doubled the standard deduction, however, the State of Kansas did not. Filers who take the higher standard deduction on their federal taxes, must accept the lower standard deduction on their state taxes. Kansans are now forced to pay the state $60 million more each year in taxes and are voided the opportunity to itemize at the state level.
Due to federal tax reform in 2017, fewer middle-class Kansans are able to itemize charitable, medical, and expenses related to homeownership when they take the federal standard deduction. In Kansas, when filers take the standard deduction at the federal level, they must also take the less generous standard deduction at the state level. The problem? Fewer middle-class Kansans are able to itemize their state return and are now paying in more taxes.
Although many Kansans can easily itemize by the state standard ($7,500 for married filing joint), they simply do not have enough itemizations to exceed the new federal limits ($24,400 in 2019 for married filing joint). The result? Kansas is taking in excess tax revenue and hard-working Kansans are left unable to take tax deductions that, in the past, the Kansas Legislature has worked diligently to preserve.
Kansas Legislators passed two versions of a tax bill that would preserve this tax deduction. However, both bills were ultimately vetoed by Governor Kelly. Data provided by the Kansas Legislative Research Department shows following the change in the federal tax code, Kansas is now raking in an additional $60 million after the voiding of Kansas itemized tax deductions was allowed to happen.
These tax incentives encourage people to invest in Kansas. Homeownership strengthens our state, our communities and our families. Legislators must act on our behalf to preserve these incentives… because homeownership matters and without it – the American Dream dies. Reach out to your local legislator and let them know you support building a stronger Kansas. Sign the Homeownership Petition today.
If you’re considering selling your home, now is a great time. Low inventory levels have led to declining sales, but increased property prices. With few options, homes are selling at premium prices. From June 2018 to 2019, the average sale price across Kansas was up 7 percent.
With homes on the market for an average of only 50 days (no change from 2018), homes are not only selling for higher prices, but also selling quickly. For buyers, historically low interest rates in July sweetened the incentive to invest in homeownership.