ORANGE BEACH — In an official June 26 press release, Orange Beach City Schools' leaders says the district does not owe money to the state in connection to the Foundation Program.

"In a correspondence to Orange Beach City Schools’ Superintendent Randy Wilkes dated Friday, June 23, 2023, State Superintendent Eric Mackey stated that the Orange Beach Board of Education does not owe any money to the State of Alabama in any form as a match to the Foundation Program," the statement read. "Additionally, there will be no future financial request of the Orange Beach Board of Education relative to the Foundation Program."

This news comes almost a year after a June 2022 letter from Mackey that said the school system owed $4.6 million for a shortfall in the state foundation's $10 million match funding program.

According to a November 2022 Gulf Coast Media article, state education foundation funding works by assessing how much money the state sends to school districts based on a number of factors, but the main one is average daily membership (ADM).

Once that figure is determined, the state deducts the equivalent of 10 mills of property tax from that total, and the school districts gets what’s left.

While the newly formed city school district has less students enrolled than the county district it used to be a part of, many come from homes with higher property values than nearby districts.

Because of their smaller size, the district qualifies for only $7 million in foundation funding, but 10 mills of property tax in the high-dollar resort district equals $11.7 million. That difference resulted in the deficit of $4.6 million the state previously said it was owed from the district.

“Because, as stated in your letter, the required match exceeds the total Foundation Program allocation earned by OBCS and in order to keep the Foundation Program funding balance for statewide school funding solvent, OBCS will need to remit $4,679,674 to the state," read the 2022 correspondence from Mackey to the school system.

According to the letter, the money would have been due by Oct. 1.
The Orange Beach Board of Education will be holding a press conference on Tuesday, June 27, to further discuss this matter.

Stay tuned for updates.