Opinion ID: 481732
Heading Depth: 2
Heading Rank: 3

Heading: Financial Support.

Text: 66 The district court failed to make detailed findings about the financial inter-relationship between the city and the county, although the three precedent cases extensively discussed financial considerations. See Hogencamp, 722 F.2d at 722; Phillips, 634 F.2d at 951; Creel, 531 F.2d at 288. The record of the case, however, does reveal a great deal of information about the finances of the county schools. The data, especially when compared with that found in Hogencamp and Phillips, indicates that the city residents have only a minimal financial interest in the county school system. 67 In Hogencamp, the city residents contributed 2.74% of the county school systems budget, an amount explicitly ruled to be insufficient to create a substantial interest in the city residents. 722 F.2d at 722. While the Phillips opinion did not designate a specific percentage, it is clear from the opinion that the city residents in that case contributed 1% to 5% of the county school budget; this amount was found to be insufficient. 634 F.2d at 951. 68 There are two ways that the City of Brewton could contribute to the county schools: direct subsidies or indirectly through tax dollars that flow to the county from the city. In this case, without detailing any of the subsidies, the defendants admitted that any subsidies that might exist amount to no more than 3% of the county budget. Plaintiffs' Exhibit A at 2. This 3% or less figure is very close to the 2.74% rejected in Hogencamp, and within the 1% to 5% rejected in Phillips. Thus, in this case, the direct subsidies cannot create a substantial interest. 7 69 Thus, tax dollars that might flow to the county from the city must be considered. While the record could be clearer, the data present leads to the conclusion that if any tax money flows between the jurisdictions, it is much more likely that the flow is from the county to the city, and not the other way around. If this conclusion is wrong, and there is a flow from city to county, it must be so small as to be insignificant relative to the entire operating budget of the county school system. 70 The total budget (for the year considered by the district court) was $15,891,697; of this, only $2,680,307 came from local taxes. Seventy percent of the budget came from federal and state funds, while the total input from local taxes represented 17.5%. Because most local tax dollars are apportioned and returned to the locality from which they came, the record reveals that only a small portion of this latter percentage might have flowed from the city. 71
72 The bulk of the tax money collected throughout the county that is designated for education is divided between the county and city school systems on a pro rata basis based on the number of students enrolled in each school system. For the year considered by the district court, approximately 79% of each tax dollar was allocated to the county (which had 5714 students) while the remaining 21% went to the city (which had 1568 students). 8 73 The defendants, however, presented no evidence that the city paid a disproportionate amount of the ad valorem and excise taxes collected in Escambia County. 9 The lack of evidence is in contrast to the Phillips v. Andress case, where the defendants proved that the city did in fact pay more in property taxes than was returned to its own school system; nevertheless, the court in Phillips ruled that the monetary difference was insignificant relative to the school budget. 634 F.2d at 951. 74 This lack of evidence, however, is analogous to the claims of the Phillips defendants that the city in that case paid a disproportionate amount of a county sales tax. The defendants in Phillips presented no evidence attempting to distinguish the county and city residents' shares of the sales tax. In rejecting this contention of a substantial financial contribution, the Phillips court emphasized the lack of evidence on the question. 634 F.2d at 951. In this case, while claiming that city tax dollars flow to the county, the defendants have not shown us how. 10 75 Yet, even if the defendants here had presented evidence of disproportionate payment by the city, the amount of overpayment would still not rise to a significant level. Assuming, arguendo, that the defendants could prove that the city residents (17% of the total population) paid over one-third (34%) of the total county tax receipts, the amount of overpayment flowing into the coffers of the county school system would still only be about $130,000, which is less than 1% of the county budget, and thus less than the percentages ruled insignificant in Phillips and Hogencamp. Thus, even if there is some disproportionate tax payment by the city, it is highly unlikely to rise to the level of a substantial interest. 76
77 Over half of the local tax dollars distributed to schools are collected under the state oil production tax. Of the $2.6 million of local taxes distributed to the county schools, $1.7 million is from the oil tax. No revenues from this tax are generated from oil production within the city limits of Brewton. Plaintiffs' Exhibit A at 2. Nevertheless, the defendants attempt to claim some of that money for the city. Their argument is that city residents may own some of the oil, and thus city money is used to pay the tax. 11 78 This argument, however, ignores the simple fact that the Alabama oil tax is assessed at the mouth of the well, Ala.Code Sec. 40-20-1(1) (1975), and at the time of severance, id. Sec. 40-20-3(a). In fact, the tax is to be paid by the person in charge of the production operations prior to making payments to the ultimate owners of the oil. Id. Thus, I would conclude that this is county money, and therefore this money cannot be said to flow from the city to the county. 12 79
80 Because (1) the defendants have presented no evidence showing a flow of tax dollars from the city to the county, (2) any possible flow would be insignificant, and (3) the oil money does not flow from city to county, there is no financial support of the county schools by the city, and therefore no substantial interest by the city residents in the county schools. 13 And, because I read the Creel, Phillips, and Hogencamp opinions to consider the finances heavily, I am bolstered in my conclusion that the voting scheme in Escambia County is improper. 81