Judge denies Alabama charter schools’ request for temporary block of FY26 tax distribution

BIRMINGHAM, Ala. – Montgomery Circuit Court Judge Monet Gaines has denied a request from 11 Alabama public charter schools to block State Superintendent Eric Mackey from notifying county revenue commissioners how to distribute countywide tax revenue among school systems.

The charter schools’ lawsuit, filed Sept. 5, seeks to require Mackey to include charter schools in his instructions to county revenue commissioners for how countywide property taxes should be divided among public school districts. Those distributions are made at the county level and can begin as early as Oct. 1.

Attorneys for the schools argue that Alabama law requires countywide property taxes to be shared with all public schools – including public charters – but that Mackey has excluded them from his annual instructions since becoming superintendent in 2018.

In a ruling issued Thursday, Gaines said the schools had not shown they would suffer “irreparable harm,” the legal standard for a temporary restraining order. Instead, she found that traditional public schools could face budget shortfalls if they received less funding than anticipated.

Testimony during Monday’s hearing showed that 10 of the 11 charter schools had completed their fiscal year 2026 budgets without including countywide tax revenue.

“Because plaintiffs can operate for the 2025–2026 school year, as budgeted, without the countywide money, plaintiffs have failed to demonstrate immediate irreparable harm,” Gaines wrote.

Seventeen of the 20 traditional public schools that would be affected had finished their budgets by the date of the hearing, and those budgets did include the countywide tax revenue.

“This reduction can and likely will cause budget shortfalls for those schools, given the limited time to adjust,” she concluded.

Mackey said he was pleased with the judge’s ruling.

“We are very pleased that the judge agreed that the regular annual distribution of funds to local boards of education should proceed without interruption this fall while the lawsuit itself proceeds,” he said.

Attorneys for the charter schools could not be reached for comment Thursday.

Mackey’s instructions in the notification letters to schools determine how much money school systems receive. While no financial data is included in the court filings, Alabama Daily News reviewed budgets for three counties that house five of the 11 charter schools to illustrate the potential impact:

• Sumter County has 855 students and budgeted to receive $3.3 million in countywide ad valorem and sales taxes for FY26 if the lawsuit is successful. University Charter School, with 717 students, could receive nearly half of that if the charter schools prevail.
• Perry County, with 772 students, budgeted to receive $1 million in countywide ad valorem and sales taxes. Breakthrough Charter School, with 408 students, could receive about a third of that amount.
• Floretta P. Carson, Covenant Academy and MAEF public charter schools in Mobile County, with a combined 1,600 students, could receive about 3% of the estimated $50 million in countywide ad valorem and sales taxes Mobile County Schools is to get for its 47,700 students.

Alabama’s charter school law was enacted in 2015 and has been amended several times.

Mackey claims he has discretion over whether to include the charter schools. To date, he has not done so, except for Birmingham’s i3 Academy which settled a lawsuit in 2024 that resulted in the charter school receiving a portion of Jefferson County’s countywide ad valorem and sales taxes.

A hearing date on the charter schools’ lawsuit is not included in current court records.