Increasing property values push schools to the ballots | Local News

TRAVERSE CITY — Soaring property values ​​in the region mean that some Michigan school districts have to return to the ballot to ensure their funding remains stable.

Traverse City Area Public Schools and Northwest Education Services are among several public school districts in the state that experienced unexpected and substantial Headlee rollbacks on their operational millages in the past two years.

The situation has placed these districts in a precarious spot where getting their full foundational allowance to operate as usual is not guaranteed without another approval from voters.

School operational millages are often voted on to last a number of years, but, when property taxes rise more than the rate of inflation, millages get decreased, or rolled back, as a result of the Headlee Amendment in Michigan’s state constitution, which stipulates that the annual growth in property taxes cannot be greater than the rate of inflation.

Public school districts in Michigan like TCAPS must collect 18 mills to receive their full per-pupil funding, which was recently bumped up to $9,150 through the most recent state budget. The 18 mills covers a portion of this per-pupil allowance and the rest comes from the state.

The state assumes all districts collect 18 mills and would not make up the difference to get to $9,150 per student for a district collecting less. That means schools lose money that would go toward essential parts of their operation if their millages were to drop below 18 mills as a result of a Headlee rollback.

To avoid rollbacks that push them under 18 mills, school districts like TCAPS are turning to voters to authorize mill increases for their operating millages, which are held in reserve and added to their millages if they drop below 18 as a result of a Headlee rollback.

The school district would still only be collecting 18 mills.

This does not apply to intermediate school districts like North Ed, which levies 2 mills to support its special education programs, like the Creekside School, Bridgeway or New Horizons. However, North Ed’s operational millage is also impacted by Headlee rollbacks, which also puts their program at risk of losing funding.

In 2020, TCAPS went to the voters to authorize an extra mill increase for its operating millage — a non-homestead tax that does not impact primary residences — to keep it above 18 mills until 2024, when they plan to renew the 10-year operating millage they passed in 2014.

But, because property values ​​have soared 5 to 8 percent in Grand Traverse and Leelanau counties, the Headlee rollback brought TCAPS’s 2022 millage down to nearly the same number it was at in 2020.

To make it to 2024 without losing any funding, TCAPS is seeking a 2 mill tax authorization rate increase this November from voters within the TCAPS school district.



Thomas Hill

“We’re not asking for more money,” said Christine Thomas-Hill, TCAPS Associate Superintendent of Finance and Operations. “We’re asking to maintain the authorization that we’ve already got.”

TCAPS trustees voted on June 27 to approve sending the authorization increase out to vote for the Nov. 8 election.

North Ed’s last authorization was a .75 increase that was approved in 2000 to keep its operational millage at 2 mills. At that point it has dropped to 1.67 and the .75 increase brought it up to 2.42. Since 2000, North Ed’s operational millage has rolled back to 2.02560, said Ryan Jarvi, North Ed communications director.

Those 2 mills apply to all properties within the ISD.

The ISD board has yet to vote on sending anything out to vote, but they have received information on the millage and are expected to vote on it at their next meeting in August. They are looking at authorizing .5 mill increase over 10 years, Jarvi said.

“As property values ​​keep rising, we want to ask for a little more cushion,” Jarvi said. “As that keeps going up we’re at risk of losing some of that funding for special education.”

The authorization would require approval from a majority of voters in the five county areas — Benzie, Kalkaska, Leelanau, Antrim and Grand Traverse.

Elk Rapids, on the other hand, is looking to circumvent any dramatic headlee rollbacks in the future with a shorter term millage.

Elk Rapids levied a 10-year 20 mill operating millage in 2013. Their current millage is at 18.2603, said Bill Melching Elk Rapids Director of Finance.

Elk Rapids’ operational millage covers over 80 percent of their per-pupil allowance, substantially more than TCAPS because of their high property tax values ​​and the number of secondary homes in the area, Melching said.

Elk Rapids has not come too close to dipping below 18 mills in the past few years, Melching said. However, the board of education is having a preliminary discussion about seeking a renewal of the 18.2503 millage and a .5 mill increase for three years in either November or next Spring.

Brown said Elk Rapids would likely only go for a short-term millage because anticipating inflation and property values ​​in the long-term is too difficult to do in northern Michigan. But there’s also downsides to short-term millages — you have to keep asking the voters to approve millages and districts have to pay themselves for May elections when things don’t get passed in November.

So, funding for schools is often in flux. Only planning in the short-term renders school budgets even more volatile than they already are.

“Schools are always in that area of, well, this is what we’re assuming and then six months later, months later, oh, here’s what we actually got,” Brown said. “So it just compounds that maybe, maybe not. It’s just the uncertainty of school funding.”

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