Inflation, property taxes spur several school millage requests

Oct. 16—TRAVERSE CITY — Several area schools will be asking voters to approve millage proposals this November.

Some of those millage proposals are straight renewals of the schools' operating millages, but most will be proposals for authorizations that would allow schools to maintain stable funding as inflation and costs go up.

In-formula public school districts in Michigan receive part of their foundational allowance through per-pupil funding from the state and the other part comes from the district collecting a non-homestead operating millage. These millages do not affect primary residences.

The state assumes that all school districts collect 18 mills, and it would not make up the difference for a district collecting less. 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. That amendment stipulates that the annual growth in property taxes cannot be greater than the rate of inflation.

To combat the Headlee rollbacks and maintain a stable 18 mills to continue affording expenses, like wages and transportation, which also increase with inflation, schools will include in their millage proposals a few extra mills that they can hold in reserve that will keep them above 18 mills.

If a school district's operational millage drops below 18 mills, it starts to see less funding for operational costs.

In recent years, as inflation has risen and property taxes in the northwest Lower Peninsula have soared, many school districts in the region have faced large Headlee rollback factors and need to return to the ballot to seek out another authorization from the voters to keep their operational millage at 18 mills.

By law, schools cannot collect more than 18 mills for their operating millage.

Five school districts — Mancelona Public Schools, Suttons Bay Schools, Forest Area Community Schools, Traverse City Area Public Schools and Northwest Education Services Intermediate School District — seek these authorizations from voters.

* Suttons Bay Schools is seeking an authorized increase of 1.5 mills for the next two years.

Suttons Bay Schools' original millage was voted on in 2013, and will last through 2024. Since then, it has been rolled back a total of 2.3171 mills, Superintendent Casey Petz said. The last few years, there have been more aggressive rollbacks on that millage, resulting in a $10,000 loss from their budget. Last year's rollback was not significant for the school district, Petz said, but if this authorized increase doesn't pass and there are further rollbacks on the millage, Suttons Bay is projected to lose $106,201.

* Forest Area Community Schools seeks a 3-mill authorized increase to bring its millage back up to 18 mills and avoid further funding loss.

Forest Area's operational millage was approved by voters in 2008 for 20 years, but, in 2016, the millage began to dip below 18 mills as a result of the Headlee rollback. Reductions between 2016 and 2022 amounted to a 1.3736-mill decrease, Superintendent Joshua Rothwell said. Before 2022, reductions were continual but manageable for the school district, but now the millage is projected to drop to 16.6264, which would mean a $92,867 loss from Forest Area's budget, Rothwell said.

* Traverse City Area Public Schools is asking voters for a 2-mill authorized increase to keep its operating millage at 18 mills.

In 2020, TCAPS went to voters to authorize an extra mill increase and keep their operating millage above 18 mills until they had to go out to renew it in 2024. Unexpectedly, the Headlee rollbacks of the past two years were significant enough to warrant another ballot proposal asking for an authorized increase just to be extra cautious, said Christine Thomas-Hill, TCAPS Associate Superintendent of Finance and Operations, in July.

Between 2018 and 2020, TCAPS's authorized millage saw a 0.3945 decrease, and between 2021 and 2022, the school district's millage faced a 0.6175 decrease, according to numbers posted on the TCAPS website.

Intermediate school districts like North Ed have different rules than public school districts, but they also levy their own operational millages.

North Ed levies 2 mills on all properties within the ISD to fund 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.

* This November, North Ed is seeking a 0.5 mill authorized increase to keeps its operational millage at 2 mills.

North Ed's last authorization was a 0.75 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 0.75 increase brought it up to 2.42, with the extra 0.42 held in reserve to combat future rollbacks. Since 2000, North Ed's operational millage has rolled back to 2.02560, said Ryan Jarvi, North Ed communications director, in July.

Two other schools in the region are asking voters to renew their millages this November.

* Elk Rapids Schools's 10-year millage expires in 2023. In November, they are seeking a five-year 20-mill operating millage to begin in 2024 and last through 2028.

Although they are asking for 20 mills, Elk Rapids will still only levy 18 mills. The extra two mills will be held in reserve to combat Headlee rollbacks.

Elk Rapids' current millage is at 18.2603, said Bill Melching, Elk Rapids director of finance, in July. Elk Rapids has not come too close to dipping below 18 mills in the past few years, Melching said.

Northport Public School is an out-of-formula school district, so their funding works a little differently than most other schools in the region. Because of the uniquely high property values and the high density of non-homestead properties in the Northport area, the school district levies 13.388 mills, which makes up about 75 percent of their total budget, Superintendent Neil Wetherbee said.

"It's what keeps the lights on," Wetherbee said.

* In November, Northport is seeking approval for a 14.8884 non-homestead millage for five years, from 2024 to 2028. It is a renewal of a millage that will expire in 2023.

Legally, Northport cannot levy more than 13.388. The extra 1.5004 in the millage proposal will be held in reserve to combat Headlee rollbacks.

That 14.8884 that Northport is asking for is exactly where the last millage left off after the past five years of Headlee rollbacks. Wetherbee said he suspects the district will be good to maintain a millage at 13.388 for the next five years with this renewal.

* In 2022, Mancelona Public Schools' 18 mills was reduced to 17.736 mills resulting in a $56,000 loss in funding. Now, Mancelona is asking voters for 1 mill to restore that millage to 18 mills and hold the rest in reserve to combat future rollbacks and avoid future losses in funding.

Mancelona Superintendent Jeffrey DiRosa did not respond to a request for comment.