Most court cases focus on a given event -- an act, a crime, an accident. But a tax-policy trial in federal court recently put more than a century of Alabama history on the stand. As WBHM's Dan Carsen reports, in Lynch vs. Alabama, the plaintiffs allege the state's property tax system and its effect on schools are direct outgrowths of the overt racism of the past.
In any system where local property taxes help fund schools, some inequity is a fact of life. But the degree and the reasons behind it are what's at issue in Alabama. In 2008, parents of students in Lawrence and Sumter Counties sued the state on behalf of their children. They say the property tax system deprives rural, mainly black districts of the funding needed for an education comparable to that offered in other parts of the state.
Plaintiff Stella Anderson lives with her two boys, ages 7 and 14, and her husband -- a Navy veteran -- in Sumter County, just a few miles from the Mississippi border. She sees injustice in the way schools are funded in Alabama: "If things continue the way they are with farmland and timberland not being taxed properly, then what we're going to see is more declining of educational resources within rural communities especially, but the entire state. The poor will continue to get poorer, the educational system coming from rural distressed communities will continue to diminish."
She adds,"This is not about trying to increase anyone's taxes. It's about doing the right thing."
Per capita, Alabama has by far the lowest property taxes in the country. This is mainly due to so called "current use" provisions in state law. Tax policy expert Jim Williams is director of the Public Affairs Research Council of Alabama. As he explains it, "homes, farms, and timberland are taxed at 10 percent of market value, but current use means that the assessment is done in terms of the way the property is used now, which would mean farm or timberland can be taxed not at its market value but at the value that it has as productive farm or timberland. That tends to be lower than that 10 percent assessment level throughout Alabama."
According to state figures, 19 million of Alabama's 32 million acres are farmland or timberland under "current use." It's clear that Stella Anderson understands the fiscal ramifications of her case when she says, "If this lawsuit is won, there will have to be a total restructuring of the tax system."
That assessment may be accurate, but it's also one of the defense's arguments. The state maintains that a legal victory for the plaintiffs would throw an already complicated tax system into disarray. The state also questions the court's jurisdiction, pointing out that federal courts cannot dictate state tax codes. So the plaintiffs want U.S. District Judge Linwood Smith to find the current-use provisions unconstitutional for violating the equal-protection clause of the 14th Amendment. And they want him to give the state legislature no more than a year to replace the codes.
Sumter County Schools Superintendent Dr. Fred Primm wouldn't speculate on the historical motives behind current property tax rates, but he knows the consequences first-hand. As he puts it, "In rural areas -- and most of those rural areas being minority-populated -- it has really stacked the decks. We're working with very little local revenue. Basically you have no money to do anything creative or innovative."
He adds that his schools offer only one foreign language and no K-8 art classes. But he points out a hard reality that's race-neutral: "The bottom line is, people just really do not like taxes, regardless of where they are and what they do, and what color they are."
The defense's main argument is that state money simply is not allocated by race. But they also note that, if prompted by the courts, the legislature and local voters could install tax rates that provide the same or even less revenue for schools.
Private landholders, the forestry industry, and others are watching closely. Jeff Helms, communications director for the Alabama Farmers Federation, supports the current system. "It gives voters the opportunity to raise property taxes or to defeat a referendum to raise property taxes," he says. "Whether you like the property tax system in Alabama or not, it is one that gives the power to the individual voter. And it's allowed a lot of families to stay on farmland that otherwise wouldn't have been able to."
So the ramifications of Lynch versus Alabama are complex, as one might expect from a trial where historians testified about Reconstruction, the state's 1875 and 1901 Constitutions, poll taxes, integration, and busing, among other things. Plaintiff Stella Anderson observes that "a lot of individuals do not know what laws are still on the books that should be taken a look at and revised or modified to suit the day and time we live in now."
The plaintiffs contend the history of property taxation and school funding in Alabama is a continuous narrative of state-sanctioned racism. But the history isn't quite as simple as "whites didn't want to pay for black schools," though that certainly was true, and may still be true for some. When slaves became citizens, Alabama's recorded population increased by almost fifty percent. A fledgling school system suddenly had to educate those children even as the slave tax vanished, assessed property values declined, and cotton prices plummeted. Property taxes tripled, and farmers were taxed right off their land. Then came the Great Depression. So white farmers came to despise property taxes. That's one reason caps on property taxes are in the state's constitution and raising them requires a local referendum. And those hurdles partly explain why so many Alabama districts rely heavily on regressive sales taxes.
Tax policy expert Williams sees serious "equity and fairness issues" with education funding in Alabama, but points out that "if you invest and have good schools then it raises your property value, so you get a return on that investment in those taxes."
Sumter Superintendent Primm predicts much more funding for his school system and others like it if the plaintiffs win Lynch versus Alabama, adding, "I think the face of education would change in Alabama, tremendously."
Whatever Judge Smith's decision, it will almost certainly be appealed, but plaintiff Stella Anderson doesn't plan on disappearing. "Whatever it takes," she says defiantly, "I'm willing to go the distance."
The Judge has weeks of testimony and more than a thousand exhibits to review. A case steeped in more than a century of history will not have an easy or quick resolution. It may be months before Stella Anderson and her fellow plaintiffs get a ruling.
-Dan Carsen, May 11, 2011