Madison City Schools system was awarded $36 million in interest-free bond money by Gov. Bob Riley last week to build a high school inside Limestone County. Now, to help pay back the funds, Madison City Council is planning to raise sales tax inside Madison limits by a half cent.

City Council members said at a work session last week they plan to vote soon on the issue and hopefully implement the tax increase by Jan. 1.

The high school, which would alleviate overcrowding at Bob Jones High School, would hold about 1,600 student and cost $65 million, said Madison City Superintendent Dee Fowler.

It will be built on Madison-annexed property on County Line Road across from Heritage Plantation subdivision, which has led to discussions among Madison, Athens and Limestone County school systems over how sales tax revenues will be distributed to the school.

Fowler said last week that based on Alabama law, Madison City Schools stand to get the lion’s share of Limestone County taxes — which typically are divided with Athens City Schools, with 76 percent going to county and 24 percent going to city.

However, Fowler said he approached superintendents of Athens and Limestone schools in an effort to work out a more equitable division of Limestone tax revenues.

According to Athens Superintendent Dr. Orman Bridges, no such deal has been approved.

The school should be completed by fall 2012.

Madison council members said the half-cent increase would be temporary and would be abolished if voters approve an increase in property taxes — which cannot be placed on a ballot until approved by the state Legislature — or after the funds have been repaid.