Alabama charter schools seek share of county taxes in court

BIRMINGHAM, Ala. – Eleven Alabama public charter schools are asking a Montgomery circuit judge to block the state superintendent of education from finalizing annual countywide property tax distributions to other public schools until the court decides whether charter schools are entitled to a share of those funds.

Montgomery Circuit Judge Monet Gaines heard arguments earlier this week on the schools’ request for a temporary restraining order and gave both sides three days to submit a proposed order. She did not indicate when she may issue a ruling.

The lawsuit, filed Sept. 5, seeks to direct Alabama Superintendent Eric Mackey to include charter schools in his instructions to county revenue commissioners for how countywide property taxes should be distributed among public school districts. Those distributions are made at the county level and can begin as early as the start of the fiscal year, Oct. 1.

Attorneys for the schools argue Alabama law requires countywide property taxes to be distributed among all public schools – including public charter schools – but that Mackey has not included them in his previous annual instructions since becoming superintendent in 2018. Alabama’s charter school law was passed in 2015 and has been amended multiple times.

The complaint claims Mackey has acted in an “arbitrary and capricious manner” by leaving charter schools off those lists.

The schools involved in the suit are located in five counties:

• Jefferson County

            Empower Schools of Alabama

            Magic City Acceptance Academy

            Freedom Preparatory Academy

            Legacy Preparatory School

            Alabama Aerospace and Aviation High School

• Sumter County

           University Charter School

           Mobile County

           Acceleration Day and Evening Preparatory Academy

           Covenant Academy

           Floretta P. Carson Visual and Performing Arts Academy

• Montgomery County

           LEAD Academy

           Perry County

           Breakthrough Charter School

The schools’ attorneys note that i3 Academy in Birmingham is the only public charter school currently included in a countywide distribution.

Mackey’s Sept. 10 response calls the schools’ claims “unfounded,” arguing they are seeking “to be funded at a higher level than the law allows and at a higher level than other public schools.”

He also contends an injunction would be  improper because the schools waited “until the eleventh hour” to file and because budgets for fiscal year 2026, due to the Alabama State Department of Education by Sept. 15, are already in place.

According to Mackey, charter schools prepared their budgets for next year without anticipating countywide tax revenue, while traditional systems counted on countywide tax revenue consistent with prior years.

The schools’ filing says they began discussions with Mackey in December, asking to be added to the distribution letters, but that he declined to do so.

Mackey’s filing points to i3 Academy’s inclusion in Jefferson County’s tax distribution as the result of a 2024 settlement of a lawsuit the charter school filed against Jefferson County and Birmingham City Schools. 

Financial statements for i3 Academy show the school has received about $820,000 in countywide taxes so far this fiscal year, as their enrollment entitles the school to seven-tenths of one percent of Jefferson County’s total distribution for FY 2025.

The school does not receive any school district or city taxes.

Lawyers representing the parties could not be reached for comment Wednesday.

Disputes over how taxes are divided among public schools have frequently surfaced in recent years.

Beyond i3 Academy’s case, the two city districts in Baldwin County – Gulf Shores and Orange Beach – have pursued a share of Baldwin County property taxes.

Three north Alabama districts won a 2021 case that increased their portion of the Simplified Sellers Use Tax, and Tuscaloosa City and Mountain Brook City schools recently joined litigation over how the state allocates that same online-sales tax.