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Bill would lift Madison-annexed Limestone taxes
Proposal seeks to equalize property revenue for schools

By Holly Hollman · 340-2445

MADISON — Think calculus is complicated?

Try living in Madison-annexed Limestone County and figuring out what property tax to pay.

If that doesn't bring on a headache, try figuring out how a proposed bill to equalize property tax for schools will leave these folks paying more property tax than their counterparts across the county line.

Madison-annexed residents pay 49.5 mills in property tax.

Limestone County Revenue Commissioner Brian Patterson said that 49.5 mills is divided between Limestone County, which gets 25.5 mills, and the city of Madison, which gets 24 mills.

Here's where things can get confusing.

Although parents in the Madison-annexed area send their children to Madison City Schools, part of the 25.5 mills of Limestone tax they pay, 5.5 mills, goes to Limestone County Schools. That's because everyone who lives in Limestone County must pay that school tax. That's part of the quandary of annexation.

But Madison-annexed residents also are sending tax money to Madison City Schools, because the 24 mills in Madison tax they pay includes 11 mills for those schools.

Where things become unbalanced is where the city is divided on the county line.

Taxes split

Those living in Madison on the Madison County side, pay the 11 mills in city taxes for schools, 5.5 mills in county taxes that are split between Madison County's three school districts and a 10.5-mill district tax.

Madison City Schools attorney Woody Sanderson said the Madison-annexed residents aren't paying that 10.5 mills. That's because before the city annexed, the Madison County Commission approved the 10.5 mills district tax. Madison County Schools get 10.5 mills from those living outside of Madison and Huntsville, and Madison City Schools get 10.5 mills from those living in Madison.

Sen. Tom Butler, D-Madison, said he plans to introduce a bill in the legislative session that would add the 10.5 mills onto the Madison-annexed residents.

'Fair share'

"They go to Madison City Schools and should pay a fair share," Butler said.

Sanderson said now those Madison-annexed residents aren't paying any district school tax to Limestone or Madison City.

They used to pay Limestone County 3 mills of district school tax until 2005 when Madison City Schools demanded that Limestone give them that tax revenue and the back taxes Limestone collected. The city of Madison argued that those residents send their children to Madison schools, and therefore the tax should fund its school system.

Limestone refused to comply, and in turn, removed that tax from Madison-, Huntsville- and Decatur-annexed property owners when other county voters renewed the 3 mills in 2005.

Sanderson said Madison City Schools aren't going to push the issue of getting the back taxes that Limestone collected off the 3 mills in the Madison-annexed area prior to 2005.

"Trying to get it would eat the profits the school board would gain, so it's not worth it," Sanderson said.

Getting those annexed residents to pay an additional 10.5 mills, however, is worth it, he said. The additional millage would add an estimated $100,000 to Madison City Schools' budget.

It also would make living in Madison-annexed Limestone County more expensive than living in Madison.

Adding 10.5 mills on top of the 49.5 mills Madison-annexed residents are paying would raise their property tax to 60 mills.

By comparison, Madison residents pay 57.5 mills.

"Yes, it will be a bigger burden on the annexed residents, but we need to even the playing field in taxes paid for the schools," Sanderson said.

If the bill leads to a vote, it will be a statewide vote because it is an amendment to the state Constitution, Sanderson said.

Additional taxes

There is some welcome news for Madison-annexed Limestone County residents facing a possible 10.5-mill increase in property taxes.

Another 1.5 mills Limestone residents will start paying in October won’t be tacked on.

A statewide vote that mandates a minimum of 10 mills of local property tax support for every school system will add the 1.5 mills on Limestone County residents, who now pay 8.5 mills.

Limestone County Revenue Commissioner Brian Patterson said Madison-annexed residents won’t have to pay the additional 1.5 mills because they already pay above 10 mills to Madison City Schools.

- Holly Hollman

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