County’s school sales tax on track for $2.1M

Published 2:05 am Saturday, July 28, 2018

The county’s new half-cent sales tax for education appears to be on track to generate the estimated $2.1 million per year for the three local school systems.

The new tax went into effect in January, which means the county began collecting the proceeds in February, five months into the 2017-18 fiscal year.

Year-to-date sales tax totals show the county has collected $1.1 million more in sales taxes year to date this fiscal year than last year, and approximately $915,756 is the new education tax.

When the commission approved the tax, estimates were it would generate $2.1 million per year for the three school systems in the county. Alabama law requires that the monies be split according to school population, which means at present, 51.5 percent would go to the county; 31.55 percent to Andalusia; and 26.8 percent to Opp.

In the five months the tax has been collected, it has generated an average of $183,151 per month. If it continues on the current trend, it would generate $2.197 million per year.

The increase in the county’s portion of the countywide sales tax for the current fiscal year is approximately $185,129. However, the county will realize a greater increase in net revenue, as the commission passed the education sales tax with the understanding that the cost for school resource officers would shift from the county’s General Fund budget to the Covington County Board of Education.

Meanwhile, an analysis of year-to-date sales tax collections in Andalusia and Opp shows retail activity is up county wide for the current fiscal year.

“To date, October – June, the city received sales taxes based on Andalusia businesses’ gross sales of $189,435,862. For the same period a year ago, it was $181,062,205,” Andalusia City Clerk John Thompson said. The $8.3 million increase means an additional $293,078 in city sales tax collections, $41,868 of which is designated for the city school system.

In Opp, total sales tax collections are up $388,188. However, for seven of those months, the numbers skewed upward based on an additional half-cent sales tax the city of Opp implemented last summer to benefit Mizell Memorial Hospital. Opp rescinded a half-cent tax earlier this year after the county commission adopted an education sales tax. Because Opp’s portion of the county education tax could be pledged to debt on the new elementary school, the City of Opp was able to rescind a half-cent of its new sales tax rate.