Alabama Constitution Section 260 School Funding, Special Tax, and Debt Payment Priority
Alabama Constitution – Section 260: School Funding, Special Tax, and Debt Payment Priority
Short Heading:
School Tax Use and Debt Payment Priority
Explanation:
Section 260 of the Alabama Constitution outlines how revenue from special taxes for schools must be used and in what order financial obligations are to be met. This section is designed to protect public education funding, especially in cases where the state or local authorities have incurred debts related to school funding.
Key Points:
🏫 1. Special School Tax:
The Constitution allows for special taxes to be levied specifically for public schools.
These taxes are often approved by voters and are earmarked — meaning the funds can only be used for educational purposes, not general expenses.
💰 2. Use of Tax Revenue:
The revenue collected from these special school taxes must be used first to pay any debts (like bonds or loans) that were issued based on the expectation of receiving those tax funds.
Only after those debts are paid, can the remaining funds be used for other school-related expenses, such as teacher salaries, facilities, or supplies.
⚖️ 3. Priority of Payment:
Debt payments have priority over other spending. This ensures that investors who lend money for school infrastructure (by buying bonds) are repaid first, which in turn helps the state maintain a good credit rating.
Purpose of Section 260:
To protect the integrity of special taxes collected for education.
To ensure trust among lenders who finance school buildings and facilities.
To guarantee consistent school funding, even when economic conditions are uncertain.
Example:
Let’s say a local school board takes out a loan to build a new school, and promises to repay it using a 5-mill property tax approved by voters. According to Section 260:
The first priority for that tax revenue is to repay the loan (debt service).
Only after the loan payments are made can the school system use the remaining money for other needs like textbooks or salaries.
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