Business licenses for private schools? Council must decide
December 14, 2016
By Andrew J. Yawn, Montgomery Advertiser
Are private schools businesses? If so, should they be required to purchase business licenses?
That is the issue facing Montgomery City Council ahead of its next meeting after a private company hired by the city to inspect businesses found something surprising: Montgomery private schools are technically required to purchase business licenses under city law. Most of them just haven't.
“We engaged a firm to come in and take a look at all our city licenses and try to find people operating outside of our ordinances, and this is one thing they picked up on, and it’s an unintended thing really,” said city Finance Director Barry Crabb at the council work session Tuesday. “We had some inconsistencies. We had one or two that were actually paying. We had 25 that were not.”
Crabb said it was not a purposeful action by either party. Private schools didn't know they had to buy annual licenses and the city didn't know it wasn't enforcing a law.
Chapter 16, Article III, Section 74-6b provides a business license exemption to “schools operated by city, county, state, churches, and qualifying non-profit organizations.”
Somehow private schools slipped through the legal cracks. The city now has to choose between enforcing the law or providing private schools an exemption. While the city has not been actively enforcing the law in the past, the law cannot be ignored now that it is known.
“When we started sending out invoices to try to get business licenses for some private schools, they started calling some of the council about why we’re trying to collect business licenses from schools,” Crabb said.
District 7 Councilman Arch Lee proposed the ordinance discussed Tuesday that would amend the code and provide an exemption for private schools grades K-12.
The original proposal would have made all schools exempt, but as Crabb said, there are some schools the city doesn’t want to exempt.
“For instance, for-profit truck driving schools and cooking schools. They require licenses,” Crabb said.
Lee was not present for the council meeting Tuesday, therefore Council President Charles Jinright tabled the issue until the next council meeting. That did not prevent council members from discussing the issue.
District 6 Councilman Fred Bell, a lawyer, asked Crabb what would stop a day care from taking advantage of the exemption.
“I’m not against it, but I don’t want some smart lawyer coming in and having a day care and calling it a private school,” Bell said. “If there’s an exemption, I’m not going to call it a day care. I’ll call it the Fred Bell Private School.”
That led to a discussion of whether or not day cares should be exempt, considering private schools make considerably more in revenue than day cares. Crabb responded that the impact of only exempting private schools would be less because the city does not currently account for that money.
“It’s not going to be a significant impact to exempt (private schools),” Crabb said. “We’ve got quite a few day cares. We don’t have a lot of day cares taking in the kind of money as a St. James or Trinity. Those are $8 million-$10 million revenue a year and would generate $8,000-$10,000 a year licenses. We’ve got quite a few day cares smaller, but they are paying the fee. To exempt them would be a different situation.”
Before the next meeting, Crabb, the council members and Mayor Todd Strange will evaluate what other Alabama metropolitan areas do in regards to private schools and day cares. Ultimately it will be the council’s decision of who — if anybody — to exempt.