A 10-year legal battle over how educational tax revenue is distributed in Limestone County quietly came to an end last week.

Last Thursday, retired Circuit Court Judge James Woodroof Jr. dismissed claims by two couples who filed motions to intervene in the case in June 2016. Unless an appeal is filed, those dismissals effectively put a bow on a very long and complex legal case between several parties.

The school tax fight began a few years before Athens City Schools Superintendent Trey Holladay was hired, but he’s had more than four years to become acquainted with the legal and political ramifications of the case. He said Tuesday he was relieved the case was finally over and done.

“It’s something you never want to be involved in, and it’s not our primary mission,” he said. “(The settlement) is not perfect, but it gives something to all the systems involved and showed everyone is willing to compromise.”

An official close to the case who did not want to be quoted said the final settlement doesn’t vary greatly from what the parties agreed to in September. An estimated $1.1 million that has been in escrow while the case has been tied up was recently released to school systems.

Here’s a breakdown of the settlement:

• A constitutional 1-cent sales tax will continue to fund Athens City Schools and Limestone County Schools only;

• A statutory 1-cent sales tax previously split between the Athens and Limestone systems will now gradually include additional distributions to also fund Huntsville City Schools and Madison City Schools, in amounts that are dependent on the economic growth of that tax over time. Madison and Huntsville will be fully included in the distribution of that tax after 10 years, but by that time, school officials expect that the natural growth in the sales tax revenues should more than cover that additional distribution to Madison and Huntsville, so that Athens and Limestone County schools do not see a reduction in their current revenue from that tax; and

• A 5.5-mil property tax, which is collected countywide, including from those who reside in Madison-annexed Limestone County, will be divided among Athens, Limestone, Madison and Huntsville schools, generally based on the numbers of students residing within those school districts in Limestone County.

The settlement also created a “floor” for Athens City School and Limestone County Schools, meaning predetermined funding levels for each system must first be met before Madison and Huntsville see a dime of the property taxes and the statutory 1-cent sales tax. In other words, both Athens City Schools and Limestone County Schools can generally continue to bank on the same tax revenues they receive now revenue percentages it receives now.

As retail and residential growth continues, however, all school systems stand to benefit from the agreement. Over the next 10-to-20 years, Madison and Huntsville could reap substantial financial revenue from the taxes without taking money from the local systems. The outlier would be if the economy enters another period of recession, which would negatively affect all of the local systems’ tax revenues.

Holladay said it “shouldn’t take long” for Madison and Huntsville to catch up in terms of reaping tax revenue.

“We’ve had great economic growth in the Huntsville metro area, which has been producing (additional tax dollars) for the school systems,” he said.

On a side note, Holladay wanted to thank members of the school board and school board attorney Shane Black for their commitment to reaching a resolution in the case.

About the lawsuit

Questions over funding equality date back to Madison City Schools’ decision to build James Clemens High School in Madison-annexed Limestone County. The population boom in that area has been well-documented, and much of the residential growth has occurred in the vicinity of the new state-of-the-art school.

Time became of the essence for Madison City Schools after the school system faced a $1.7 million shortfall. Prior to the 2016-2017 school year, students who attended Madison City Schools were counted by Madison County, even if they lived in Limestone County. When the State Department of Education stopped counting those students in Madison County, the funds were cut off. Madison City Schools officials then began taking a harder look at Limestone County’s funds as a means to make up the difference.

The couples whose claims were dismissed Thursday had previously filed motions to intervene. Their motions asked Woodroof to rule the sales tax distribution to schools is unconstitutional had the court sided with Athens City Schools and Limestone County Schools.