A federal judge has ruled that Alabama’s long-challenged property tax structure might inherently widen the gap between the state’s haves and have-nots, but he rejected plaintiffs’ claims that its application is either unconstitutional or racially discriminatory.
“Ultimately, this court must confront the fact that trial court judges cannot write opinions on clean sheets of paper. Our responsibilities are discharged, instead, in the trenches, on the grubby front-lines of the battle to provide substance for the abstract principles of ‘truth’ and ‘equal justice under law, ’” wrote U.S. District Judge Charles Lynwood Smith Jr. in his opinion issued Oct. 21, ending a three-year-old civil rights case brought against the state on behalf of 10 black schoolchildren in Lawrence and Sumter counties.
The case, India Lynch vs. State of Alabama, claimed that Alabama’s property tax structure—driven by a state constitution that hinders the levying of local taxes—provides inadequate funds for K-12 education, that rural and predominantly black school systems are hurt the worst and that the discrimination is intentional.
“Because of the anemic property taxes available to most local school systems, low-income students throughout Alabama, who are disproportionately black, suffer from underfunding….The racially motivated property tax restrictions in the Alabama Constitution continue to have their intended discriminatory effects, namely, inadequate revenues currently collected from local property taxes, the resulting underfunding of the state's K-12 public school system, particularly rural and majority-black schools, ” the suit stated.
Smith ruled, however, that the plaintiffs failed to prove that the system in place constitutes a civil rights violation for schoolchildren attending poorer, rural schools and also failed to provide evidence of a direct violation of the equal protection clause found in the U.S. Constitution’s 14th Amendment.
In his 854-page opinion that took six months to compose, Smith decried the state government’s racist roots responsible for the perpetuation of an antiquated and regressive tax structure, and he railed against the inequities of the state’s modern-day educational system. In the end, however, he championed judicial restraint and cited established case law prohibiting him from ordering an overhaul of the flawed system from the bench.
Specifically, Smith cited the 1980 decision in City of Mobile v. Bolden and the 1973 ruling in San Antonio Independent School District v. Rodriguez. The former held that “past discrimination cannot, in the manner of original sin, condemn governmental action that is not itself unlawful.” The latter held that no matter how gross or “incredibly egregious” the inequities in school funding might be, that disparity alone does not violate the 14th Amendment’s Equal Protection Clause when it is based on disparate incomes and property values and their impact on local ad valorem tax revenues.
“None of this is meant to say, however, that the court is satisfied as to either the quality or equality of public education in this State. Alabama continues to be plagued by an inadequately-funded public school system—one that hinders the upward mobility of her citizens, black and white alike, especially in rural counties, ” Smith wrote, calling the current school-funding conundrum the “product of two unfortunate realities.”
Mankind’s “self-serving nature” coupled with a judicial climate that has allowed “unequal and inadequate public school funding to evolve” has essentially hamstrung Alabama’s public education system, he wrote.
In a statement issued immediately following the ruling, Alabama Attorney General Luther Strange commended the lengthy list of participants responsible for the successful defense and said the decision reinforces the state’s stance that the existing property tax structure is fully compliant with the U.S. Constitution.
“It is the prerogative of the citizens of Alabama, through their elected representatives, to structure a tax system in a manner that best serves their interests. The Office of Attorney General remains committed to defending and vindicating this important right whenever necessary, ” Strange wrote.
The plaintiffs had petitioned Smith to order a legislative overhaul of the system, asking that a one-year deadline be placed on the ruling. The defense—led by Drayton Nabers Jr., former chief justice of the Alabama Supreme Court—argued, however that the stress created by such an edict would wreak havoc on Alabama’s already strained revenue system.
Nabers argued specifically that the plaintiffs failed to prove their case because it lacked documentation of underlying racial motives in drafting either the taxation or education articles of the state’s 1875 and 1901 constitutions. He was unavailable for comment following Smith’s ruling.
The plaintiffs’ legal team—consisting of attorneys James Blacksher, Larry Menefee and Edward Still—issued the following statement:
“The judgment is regrettable for the plaintiffs, schoolchildren in the Black Belt and other rural counties, who will continue to receive an inferior education relying on an inadequate tax base. It is regrettable for their brave parents and communities who wanted a better future for their children. The judgment is regrettable for all who seek an education in Alabama, because their educational futures are also limited by the same inadequate and discriminatory property tax system.”
Toward the conclusion of his lengthy and thoroughly annotated ruling, Smith called upon persons working through the proper legal and social channels to “cast aside arbitrary distinctions of birth, race, and place, and allow every American to harness the power provided by a quality education.”
“For too long our Nation has used arbitrary distinctions…to withhold from a great number of our fellow citizens a commodity more precious than pearls—a commodity unlimited in its ability to provide an abundant life for those who are accorded the means to pursue it, and, one that is essential to the functioning and continued existence of our still-young experiment in representative democracy—knowledge. Our Nation continues down that dangerous path at its own peril, ” he wrote.
And yet, Smith clearly delineated between his personal disdain for the inequitable system in place and his role as a trial judge to uphold the law while ensuring the inalienable rights of every U.S. citizen to life, liberty and the pursuit of happiness.
“Unfortunately, this court is constricted by binding precedent from writing an opinion that might advance those ‘unalienable rights, ’” he wrote.
The case is a follow-up to the 2004 Knight and Sims v. Alabama, alleging similar effects on the state’s higher education system. In that case, U.S. District Judge Harold Murphy held that the facts presented depicted the discriminatory intent of the law but failed to show a clear violation of the equal protection clause.
“The judge in Knight handed the plaintiffs a homerun on the facts, but they lost on the law, ” says Susan Pace Hamill, a University of Alabama School of Law professor specializing in Alabama tax and constitutional law.
Hamill served as an expert witness and authored a friend-of-the-court brief for Lynch, and her extensive research on both the inequities of the property tax system and its negative effects on race and poverty became cornerstones of the plaintiffs’ case in Knight.
Specifically, Lynch challenged Alabama’s property tax caps established in 1875, reaffirmed in the 1901 constitution and strengthened in the 1970s by the introduction of so-called “lid bills, ” the first of which lowered the percentage of fair-market value at which property was taxed. The other stipulated both farm and timberlands would be taxed not on their actual value but the value of their “current use.”
“The only conclusion you can draw when you look at these facts is that if you’re a rural county, then your property tax base pretty much is that timber industry, and the lid bill shrinks the value of this class of property to practically nothing, ” Hamill says.
Currently, the state constitution restricts property taxes to 6.5 mills, with an optional 1-mill county assessment, while the lid bills cap residential and agricultural property assessments at 10 percent of their current use value.
Because the tax code prevents local governments—especially in rural areas—from taxing agricultural and timberland at sufficient rates, Lynch contends the system fosters racial discrimination because Alabama’s rural communities are predominately black.
The system, therefore, forces local school districts to rely almost exclusively on sales tax revenue to fund K-12 education, the suit states, ensuring rural areas dominated by lesser-taxed Class 3 current use lands remain underfunded.
Based on Hamill’s research, Lynch argues that 70 percent of Alabama’s property is classified as timberland, yet those interests contribute only about 2 percent of the state’s total annual property tax revenue.
“Nobody wants to use Alabama’s property tax structure to inhibit business development, but the solution to a badly structured system is not another badly structured system, ” Hamill says. “Property taxes can be structured in a reasonable way to raise the revenue that needs to be raised without getting in the way of business, ” Hamill says.
Consider, for instance, that neighboring Georgia taxes timber and agriculture property at four times Alabama’s rate and suspends the current use formula for every acre over 2, 000 in order to distinguish between agribusiness and family farms, she says.
“The small farmer really has much less ability to pay than agribusiness, yet in Alabama we treat them the same in terms of property taxes, and that’s nuts. It’s an unwise policy, ” Hamill says.
Smith concluded his scathing critique of the state’s current property tax system and its impact on funding for public education with the following excerpts from songwriter Bob Dylan’s 1962 “Blowing in the Wind.”
and pretend that he just doesn’t see?
. . . .
And how many ears must one man have,
before he can hear people cry?
Kelli Dugan is a freelance writer for Business Alabama. She lives in Mobile.
By Kelli M. Dugan