Longstanding tensions over the split of two beach cities from the Baldwin County School System flared up again last week, and the bitterness between the sides seems as fierce as ever.

At the heart of the debate is the fate of millions of dollars in annual sales taxes.

For decades, the Baldwin County School System has received a small portion of the 3% sales tax collected on purchases within the county. But now that Gulf Shores and Orange beach have created their own school systems in recent years they believe they deserve a share of that tax money now going exclusively to the county school system.

Baldwin County Schools insists on keeping the distribution as it has been for decades.

This division of tax revenue dates to 1983, when a portion of that sales tax was earmarked to support Baldwin County Schools.

Yet, the real source of the animosity may not be the money from the sales tax itself. In recent days, officials have raised concerns about fairness, equity, and the potential for setting a troubling precedent. There’s also lingering resentment over the legal battle fought by taxpayers over the tax, which was only resolved by the Alabama State Supreme Court two years ago.

Accusations of “class warfare” and “ideology” have been hurled at Baldwin County Schools and its supporters, while critics of Gulf Shores and Orange Beach’s push for a share of the funds have accused them of attempting a “coup” that could unravel the county’s entire school system.

There have been dueling statements over the issue in the past week. Gulf Shores and Orange Beach school officials have also unveiled YouTube videos to state their position.

Officials are also worried the dispute could filter out into other areas unrelated to school taxes. Lawmakers have also expressed concern that the lack of a resolution to the tax issue could lead to the blocking of important local bills for Baldwin County in Montgomery. Another concern focuses on the prospects of the beach cities not supporting a county road program.

“This is dividing the county,” said Rep. Donna Givens, R-Loxley, who is siding with the county school system. “It’s dividing Gulf Shores and Orange Beach from the rest of the county.”

There could be an even bigger twist: Questions have been raised to some public officials about exploring the possibility of South Baldwin County splintering from the rest of Baldwin County to create Alabama’s 68th county. A new county has not been created in Alabama since 1903.

“I don’t think it’s likely,” said Sen. Chris Elliott, R-Josephine, who confirmed the questions raised to him about what it would take to create a new county, which he forwarded to the Association of County Commissions of Alabama for additional information.

Elliott said he was not advocating for a county separation.

“It’s more indicative of the amount of friction, if you will, between differing areas of the county be it the county school or city schools,” he said. “That’s just the level discourse right now.”

Legislative battle

The sides are dug in over two pieces of local legislation, SB135 and SB136, that establishes a way for Gulf Shores and Orange Beach, both cities with their own school systems, to receive a share of revenues from the 1-percentage point sales tax. Companion bills have been introduced in the Alabama House.

Gulf Shores (in 2020) and Orange Beach (in 2022) both split away from the county school system to form their own city-operated systems, and do not receive any revenues from the tax rate.

“This is a fairness issue,” said Orange Beach Mayor Tony Kennon. “Unfortunately, for the politicians, it’s a voting issue.”

Elliott is on the side of the beach cities and is sponsoring both bills. Rep. Frances Holk-Jones, R-Gulf Shores, is the sponsor of the House bills.

The bills require support from all three state senators representing Baldwin County: Elliott, Sen. Greg Albirtton (R-Atmore), and Sen. Vivian Figures (D-Mobile). Albritton has expressed opposition, while Figures said she still wants to meet with beach officials before weighing in on the issue.

In the Alabama House, support is needed from four of seven lawmakers. There also does not appear to be enough support in that chamber, either.

Some lawmakers are hopeful that the Legislature can establish a committee to review the various issues surrounding the tax.

“The sides have good arguments,” said Rep. Alan Baker, R-Brewton, who supports the formation of a committee to conduct a study to ensure the numbers involved in the issue are accurate.

Negotiations

Elliott claims that during negotiations over the Gulf Shores split between 2017-2020, the superintendents with Baldwin County and Gulf Shores agreed that the sales tax would eventually be split, with revenues also going to the cities to support their schools.

Elliott’s bills divide the revenues on either a pro rata basis or based on average daily attendance.

Elliott said the agreement negotiated at the time of the Gulf Shores school split included a waiting period before updating the sales tax’s provisions. He said the waiting period was needed to allow the Baldwin County School System to satisfy debt payments on school properties in Gulf Shores. Those obligations were finalized in December.

“True to my word, and in accordance with our agreement, I introduced the appropriate legislation at the beginning of this year to update the sales tax statute,” Elliott wrote in an Op-Ed piece.

In 2018, a letter from the Baldwin County School attorney Scott Lewis, suggests the attorneys for the county school system and Gulf Shores agreed that the courts will determine the fate of the 1% sales tax.

Gulf Shores then filed a lawsuit challenging how the tax is distributed. The Alabama State Supreme Court dismissed the case in 2023.

Baldwin County School Superintendent Eddie Tyler, in a statement Monday, classified the current situation as Gulf Shores and Orange Beach coming back “years later” and asking for a change in the terms of the negotiated split.

“The beach communities are wealthy, and they made their choice to separate, knowing how the money would be divided,” Tyler said. “Furthermore, the beach cities have not sought to increase their local education taxes since they split away.”

Tyler said that in recent years, cities like Spanish Fort, Daphne, Robertsdale, and Fairhope have approved tax increases to support the schools in their cities. Gulf Shores and Orange Beach have not had similar property tax referendums.

“It’s not appropriate for the beach cities to come back years later and ask Baldwin County students to go without knowing what they agreed to and have to seek a single education tax increase in their own areas,” Tyler said in his statement on Monday.

Class warfare

Kennon called Tyler’s statements akin to class warfare and said it was inappropriate to paint Orange Beach as a “wealthy” city.

Orange Beach does have the highest median value of owner-occupied homes compared to any other city in Baldwin County, along with the county’s lowest poverty rate, according to U.S. Census data. But Spanish Fort has a higher median household income ($101,574) than Orange Beach ($89,034), and Fairhope ($86,509) and Daphne ($86,479) are not far behind.

The median value of a house in Fairhope ($406,500) is higher than in Gulf Shores ($367,000). And the poverty rate in Gulf Shores (11.4%) is higher than Fairhope (9.6%), Daphne (5.7%), Spanish Fort (6.3%), and Robertsdale (7%).

Much of the county, not just the beach cities, has experienced explosive growth over the past 20 years.

But overall, there are stark differences in wealth from rural North Baldwin County to the tourism-draw of the Alabama Gulf Coast, and that has some lawmakers concerned. Census figures, for instance, pegged Bay Minette’s poverty rate at 30% and the city’s median household income is $39,737.

Albritton, representing northern Baldwin County, claims that both Orange Beach and Gulf Shores are building new schools and have ample revenue. Gulf Shores and Orange Beach, for instance, are bolstered with hefty lodging tax revenues from hotel and vacation rental stays, benefitting from being the biggest tourism draw in Alabama.

“Meanwhile, in the other half of Baldwin County, circumstances are the complete opposite,” Albritton said. He said in areas north of Bay Minette, there are no schools.

The historic Vaughn Elementary school, which closed to students in 2009, was demolished last year. The lack of a school in the Stockton community has also raised concerns over commutes to Bay Minette.

“The Baldwin County School system is being asked to give up money to the two city school systems at the expense of the rest of the county,” Albritton. “I cannot stand for that.”

Albritton said that comments by Kennon and Elliott over the unfairness of a portion of the tax not going to Gulf Shores and Orange Beach rings hollow to him. He said the potential exists to create “an education desert” in other parts of the county if revenues are distributed to the beach cities.

“Taxing tries its best to spread the love, but the needs are different all over the place,” Albritton said. “You got put the resources where the needs are and not where the resources are.”

Kennon said it’s unfair to paint Orange Beach and Gulf Shores as “wealthy oligarchs” attempting to “steal from the poor.”

Kennon uses the analogy of a lawnmower to illustrate his point: “One day, they can say, ‘Tony, I decided to cut my own grass, and I will take care of it now,‘” Kennon said. “I then say, ‘great, but I want you to pay me anyway because you can afford it.‘”

“It gets back, regardless of the county’s position, whether it’s fair or not,” Kennon said. “If (the county schools) are in poor shape, that’s their fault. It’s not ours. They are conflating different issues that have nothing to do with a fairness issue (of the sales tax distribution).”

Existing concerns

Tyler noted that most of Baldwin County’s lawmakers support the county school system, and some of those officials are raising other concerns about the situation. The school system also believes it has the support of the public on its side.

Rep. Jennifer Fidler, R-Fairhope, expressed concern over the costs incurred by the Baldwin County School System due to the lawsuit filed by Gulf Shores during the city-county school split seeking a portion of the 1% sales tax. The Supreme Court’s ruling left the only possible option for a change with the local legislative delegation.

The tax was part of a negotiation in 2017, in which the Baldwin County Commission agreed to rearrange the sales tax to dedicate 40% to the county school system.

In 1983, 55% of the revenues were allocated to the school system, while 40% went to the county. The 2017 agreement swapped that allocation as part of an agreement in which the county commission permanently extended a penny sales tax to provide $40 million in revenues to the Baldwin County School System.

The agreement, at the time, enabled Baldwin County to provide a continuous revenue source for the school system without having to go before the voters for approval.

Gulf Shores city schools did not exist in 1983 or in early 2017, when the tax was originally created and then changed. The Gulf Shores City Council first voted to split away from the county system in October 2017.

The lawsuit argued that the 1983 law cannot “create a local variance from equitable allocation” of sales taxes under state law. Gulf Shores city schools argued that it was entitled to a “general equitable” allocation of the funding.

“The taxpayers are sued, and we spent close to $500,000 and hours upon hours of time defending this lawsuit,” Fidler said about the Gulf Shores lawsuit. “The money could have been used in the classroom to help teachers. There is also stress that comes with the lawsuit.”

She also said there remains unaddressed concerns about students who live in unincorporated Fort Morgan and Ono Island who are required to pay to attend the city schools. The closest county schools are lengthy drives from both areas.

Givens warned that the charges assessed on out-of-district students could set a dangerous precedent for the county, potentially leading to longer commutes for students in unincorporated areas if more cities decide to split from the county.

“There is a huge picture that people need to be looking at if this precedence were set,” Givens said. “What is going to be the long-term effects? It won’t be good.”

The concerns are not deterring Gulf Shores and Orange Beach school officials to make their pitches. Gulf Shores City School Board President Kevin Corcoran and Orange Beach City School Board President Randy McKinney, in a YouTube video, called the current tax structure an “injustice.”

Corcoran said that the Baldwin County School System receives millions of dollars in extra state revenues from the state foundation program for public schools because Gulf Shores and Orange Beach are no longer part of the county system.

“All we are asking for is our fair share,” Corcoran said.