By Wes Tomlinson

For the Enquirer

School officials from the three school districts in Morgan County say they depend on online sales tax funds to operate and build new schools, and the local law enabling them to retain the bulk of those funds will have more permanence if a constitutional amendment is approved by voters next week.

Morgan County Commission Chairman Ray Long says the commission supports the schools, but the loss of online sales tax revenue has hampered its ability to properly fund many services, including law enforcement.

At issue is an amendment that will be on the Nov. 8 Morgan County ballot. If voters approve it with “yes” votes, the amendment would give constitutional force to a local law that requires the Morgan County Commission to distribute most of the online sales tax revenue it receives from the state to school systems in the county. Other county commissions in the state are able to keep the county share of online sales tax revenue.

Hartselle schools chief financial officer Bradley Colburn said his system is using the funds to pay off the construction costs of a new Crestline Elementary School.

“Over the course of 30 years that money is going to make that payment on the school, and that prevents us from having to dip into our general fund coffers which go toward direct instruction for our children,” Colburn said.

State Sen. Arthur Orr, R-Decatur, sponsored the 2019 local law that required the County Commission to redirect all but 5% of online sales taxes to the Morgan County, Decatur City and Hartselle City school districts, with small amounts redirected to volunteer fire departments. Orr also sponsored Senate Bill 242, filed in March, which if passed will incorporate the 2019 law into the state constitution. Like the local law, the constitutional amendment would apply only to Morgan County.

The statewide Simplified Seller Use Tax (SSUT) law, which became mandatory for most online retailers Jan. 1, 2019, provides for an 8% online sales tax to be collected by the state, with a portion to be allocated to the general funds of county commissions.

Commission Chairman Ray Long said the local law redirecting online sales tax revenue hurts the Sheriff’s Office and prevents the commission from giving higher pay raises to its employees.

“It took a little over $2 million a year out of our general fund and half of that would have went to law enforcement,” Long said. “It limited what we can spend for our senior centers, or parks and our employees. Our pay is not where it should be; some counties give 8 or 9% raises and we was only able to give 2% up to this year (when) we gave 5.”

However, Long said it is good that funds are going to the school districts and said the commission strongly supports education.

Colburn said it was vital for Orr’s law to have a more permanent basis so his district can continue to use the sales tax funds to hire interventionists and counselors.

“(The law) is instrumental in us continuing to maintain the level of effort and provide the education we provide our students, knowing that brick-and-mortar sales tax is taking a dip as the online world continues to drive a 21-something-percent increase year to year,” Colburn said.

Over the last 12 months, according to state disbursement records, $3,114,440 from online sales taxes has been forwarded to the Morgan County Commission, 95% of which it then was required to forward to schools and volunteer fire departments. In the 12 months ending October 2021, the total online sales tax revenue disbursed to the county was $2,604,952. In the 12 months ending October 2020, the total was $1,915,445.

Morgan County Schools Vice Chairman John Holley said his district has been using online sales tax money to fund school resource officers as well as interventionists and coaches to improve test scores.

“We were able to go ahead and add SROs to numerous campuses over the last year or so,” Holley said.

Holley said he wanted voters to realize the importance of making the bill more permanent and said his school district’s progress depends on it.

“This is a protective tax we can project out and budget for a couple years,” Holley said. “I am glad Sen. Orr brought it up again to help us make sure it’s solidified in the constitution.”

Money for firefighters

Volunteer fire departments across Morgan County receive small portions of the online sales taxes which fund their day-to-day operations.

“This SSUT money is the difference between a station being able to make a payment on a truck or not,” said John Stinson, president of the Morgan County Volunteer Firefighters Association. “It gives us more money to operate yearly, so that’s why we need this sales tax as a constitutional amendment because departments are used to it. If it gets taken away, they won’t have that money to operate on.”

Russ Johnson, a retired Decatur firefighter and current volunteer for Mud Tavern Volunteer Fire Department, said departments are fortunate to receive online sales tax funds.

“Without (online sales tax money), you would have stuff like they do in other areas that are doing chili suppers to fund your ability to (pay for the equipment necessary for firefighters to respond to) a heart attack,” Johnson said. “They rely on donations and whatever they can make off suppers and little raffles and things like that. They have no money.”

Johnson said the tax revenue is crucial for volunteer fire departments to efficiently operate so they can service residents who live several miles outside city limits.

“It is the difference between life and death in a very real way,” Johnson said. “If you’re having a heart attack, you’ve got roughly four to five minutes to live. Having someone drive 12 minutes or 18 minutes to come help you, you can see the problem with that. You’ve got to have volunteer fire departments in those areas and they have to be able to operate.”

Mud Tavern Chief Richard Ennis said that with the rising costs of fire equipment, the online sales tax is crucial in keeping volunteer fire departments afloat.

“With those prices going up, what money we do get, we have to stretch it as far as it’ll go,” Ennis said. With the constitutional amendment, he said, “we actually know we’re going to get a certain percentage of that money every month and every year.”

Orr said he warned the superintendents that it would be up to them to make sure Morgan County residents understand the amendment before they vote on it. Specifically, he said they need to make sure voters understand it is not a tax increase.

Earlier this year, Decatur schools Superintendent Michael Douglas said he’s confident voters will understand.

“Not only is this not a tax increase, it’s not even a renewal of a tax. Nothing changes with this amendment except it solidifies a law that’s already in place,” he said.