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Monday, June 24, 2024 | Back issues
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Alabama’s Low Property Taxes Survive Challenge

(CN) - Alabama's low property taxes do not racially discriminate against primarily black and poor public school systems, the 11th Circuit ruled.

A three-judge panel with the Atlanta-based federal appeals court unanimously shot down the Fourteenth Amendment challenge to sections of the tax code.

Black and white students attending public schools in Sumter and Lawrence counties sued the state, claiming the laws are "rooted in [Alabama's] historic racially discriminatory policies" that prevent rural, nearly all-black school districts from increasing revenue. They specifically targeted provisions capping property tax rates and how property is classified.

Property tax per capita in Alabama is $539 annually, the lowest in the nation, according to recent studies by the Tax Foundation.

The students argued that counties in the "Black Belt" - a poor region with primarily black farmers - are disadvantaged due to "extremely low undervaluation of farm and timber land."

They also said the state's constitutional limits on millage rates bar those in the region from raising property

taxes. Under state law, tax breaks are given to farm and timber properties that serve as the primary tax base of such counties.

U.S. District Judge Lynwood Smith in Huntsville ruled against the students in 2011, saying they failed to show that the laws were unconstitutional. In his 804-page order, Smith concluded that although four provisions in the state constitution were enacted with racially discriminatory intent, "Alabama's black citizens and black public school students [were] not disparately impacted by the challenged provisions" on a statewide basis.

On appeal, the families argued that Smith improperly ignored the historical context of the challenged provision.

Judge Adalberto Jordan, writing for the appellate panel, acknowledged the state's "deep and troubled history" of race discrimination, but said courts "are not always able to provide relief, no matter how noble the cause."

He said the families lack standing to challenge the millage-cap provisions, and their challenge to the state's property classification system fails "because we cannot say that the district court clearly erred in finding that this system was not the product of invidious discriminatory intent."

The lower court had found that the classification system was primarily motivated by financial considerations.

Jordan also pointed out that voters in Lawrence and Sumter counties have shot down proposals to increase property taxes, as both are below the state-mandated rate cap of 10 percent of current use value.

"Lawrence County levies property taxes at 10 mills, and Sumter County levies them at 13.8 mills," he wrote. "Given that neither municipality has levied the maximum generally authorized taxes for education, we conclude that an injunction prohibiting enforcement of the millage caps will not likely redress the plaintiffs' injury."

In a statement, Alabama Attorney General Luther Strange said the ruling "again confirms the state's consistent position that Alabama's property tax structure does not violate the United States Constitution, and equally as important, that the citizens of Alabama have a right to structure their own tax system."

Plaintiff attorney Jim Blacksher of Birmingham told the Montgomery Advertiser that the state Legislature won't do anything about the tax laws until voters demand it.

"The message is pretty clear the courts aren't going to do anything about it," Blacksher said. "The question is who will do something about it? That puts the ball right back in our court here in Alabama."

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