By William C. Singleton III
Homewood officials hope to join Mountain Brook, Vestavia Hills and Huntsville as the only Alabama cities exempted from the state’s Lid Law. But for that to happen, voters throughout Jefferson County would have to put on their stamp of approval.
When county residents go to the polls Nov. 6, they will be asked to approve a constitutional amendment that would allow Homewood to hold property tax referendums without having to go through the state Legislature.
Most Alabama cities are under the state Lid Law, which caps the amount of property taxes a resident could pay to $75 per year for every $1,000 of owned property. When the law was passed in the 1970s, residents of Mountain Brook, Vestavia Hills and Huntsville already were at the cap limit, so their cities were exempt from the law. Mountain Brook, Vestavia Hills and Huntsville can hold referendums in their cities to raise property taxes without the issue being subject to a countywide vote.
Homewood’s asking voters to approve a constitutional amendment to allow it to do the same.
Homewood reached the state’s tax limit, or lid, 15 years ago, said Homewood City Councilman Alex Wyatt.
“This is really about letting Homewood control its own tax base rather than the state, who is really in control,” he said “Homewood can’t really do anything at this point. This would allow Homewood the ability to do that (hold a city property tax referendum) at some point in the future, whether five years, 10 years, 15 years, 25 years or never.”
Homewood City School Superintendent Bill Cleveland said the school system has no immediate plans to ask its residents to increase property taxes if county voters grant Homewood its exemption.
“If this passes, if there ever were to be a desire to increase property taxes in Homewood, those taxes could only be increased by a vote of the citizens of Homewood,” Cleveland said. “We simply want to be in the same category as the cities of Mountain Brook and Vestavia. Both these neighbors of Homewood are exempt from the Lid Bill, and their citizens have the ability to control their property taxes.”
The Homewood City Council on Oct. 23, 2017, unanimously passed a resolution in support of lifting the Lid Law. The city school board passed a similar resolution the following month.
The Alabama House of Representatives on Feb. 15 and the Senate on March 1 approved allowing Jefferson County residents to vote on the amendment.
School officials are heavily involved in the push to lift the tax lid because schools largely are dependent on property taxes for the local portion of their budgets.
But property taxes can be raised for other purposes, as well, such as for parks or general city use. Schools still would get a portion of any city property tax revenues.
Homewood city and school leaders have been meeting with school PTO groups to discuss the amendment and the reason officials are seeking it now. Cleveland said the time is right because the council and the local legislative delegation are in agreement.
“While we have no plans to ask the voters of Homewood for a property tax increase, if we wait until we need an increase to have this law changed, that will be too late,” he said.
Wyatt agreed. “If we wait until the schools need it, it’s too late because the process takes a long time going through the Legislature and having to wait for a general election, which is every other year,” he said. “So, we need to get this exemption now.”
Homewood’s school system receives 37.5 mills from property tax, which raised about $20 million in the 2018 fiscal year, Cleveland said. In addition, the school system receives 1 cent of the city’s retail tax, which has totaled about $8 million over the past few years, Wyatt said.
Communicating the Idea of Self-Rule
Wyatt said city officials are trying to get word out to voters beyond Homewood about the amendment.
“We are planning to reach out to people across Jefferson County over the next month to let them know what this is and why it’s so important and why it’s needed,” he said. “Hopefully, they’ll understand this is about us and controlling our own destiny and securing our schools’ future.”
Even though Homewood’s fate rests with residents outside Homewood, Cleveland said he believes they can relate to the concept of self-rule.
“My hope is that the voters in Jefferson County will recognize the importance of letting the citizens of Homewood be able to make decisions that impact them directly,” Cleveland said. “Many friends in other municipalities would prefer to have local decision-making powers rest with them. I believe that voters in Jefferson County can understand and appreciate that we would like a ‘yes’ vote on this local amendment so the local residents can decide what is best for them.”