DUE TO RENEW
MARQUETTE – As the year moves on, most area residents will see their local school districts asking voters for a renewal of their operational millages during special elections.
That’s because the millage, which has been in place since the passing of Proposal A in 1994 and allows districts to levy 18 mills on all non-homestead properties, is expiring at the end of 2014.
As part of Proposal A – which shifted school funding to include a larger percentage of state aid, in lieu of property taxes – Michigan school districts have been collecting up to 18 mills on all non-homestead properties, such as businesses or second homes, for their operating budgets.
“The odd thing is (the operational millage) came into being with Proposal A, back in the mid-’90s. For some reason, there was an expiration date,” said Jay Kulbertis, superintendent of both Gladstone Area Public Schools and Rapid River Schools. “It was part and parcel of the tax breaks that were put into Prop A, but now we’re required to go back to our community, remind them of this millage and ask for their permission to impose this tax levy, and then get to work.”
Top officials in local schools are using words like “devastating” and “dramatic” to describe the potential effects of losing those 18 operational mills, should they be denied a renewal by voters.
Since Proposal A passed, operational millages have been used by districts to pay for the general operating expenses of their schools – things like utility bills and salaries and benefits for employees, just to name a few examples.
The measure also put into place an annual foundation allowance, set by the state each year.
The allowance is made up of a combination of local tax revenue and state money, with the state making up the difference between the set foundation allowance and local revenues.
When the state government is calculating its own contribution to the allowance, it always assumes those 18 operational mills are being levied, even if they aren’t.
This year, the state’s foundation allowance is set at roughly $7,000 per pupil for area schools, though the number does vary from district to district.
Marquette Area Public Schools – the school district with the largest student population in Marquette County – collects $2,726 per pupil locally. The state then provides the remaining $4,240.
If voters refused a renewal request from MAPS, it would equate to roughly $8.5 million in lost revenue to the district, since the state would continue to assume MAPS was collecting 18 mills locally.
The district, which has yet to ask voters to renew its millage, will already need to cut between $500,000 and $1 million from next year’s budget, and MAPS Assistant Superintendent for Finance Deb Barry said it would be extremely difficult to operate with further cuts.
“If $8.5 million has to be cut because we don’t have that revenue, our total district transportation budget is about $1 million, our athletic fund is subsidized by the general fund about $500,000 that’s really a small portion of the total amount,” Barry said. “If we were to close a building, I don’t know what we would do We would be removing programming and we would be putting kids into classes where the class sizes would be astronomical. That’s obviously not a good educational alternative.”
In May, MAPS will go to the voters to approve a renewal of its 18-mill operating levy, along with a small increase to hedge against potential Headlee rollbacks, which refers to the 1978 Headlee Amendment to the Michigan Constitution.
The amendment requires local units of government to reduce their millage rates when annual growth on existing property is more than the rate of inflation.
Since 2006, MAPS has seen a number of these reductions, which have permanently reduced the district’s operational millage rate to 17.477 mills. School districts, however, are allowed to restore their Headlee reductions by going to the voters to ask for an increase in their millage rate.
The Duke LifePoint Healthcare-owned Marquette General Hospital is set to hit the tax rolls this year, and production at Rio Tinto’s Eagle Mine should begin production soon, so Barry said it’s likely the district will see another permanent Headlee reduction.
“We try to be proactive and not have to continue to approach the taxpayers if the tax value should rise,” Barry said. “We’re trying to make it easier for everybody, and we’ll never collect if it’s above 18 mills.”
Gwinn Area Community Schools Superintendent Kim Tufnell said she was ecstatic when her district’s renewal proposal was passed by voters in a February special election.
Mid-Peninsula School District Superintendent Mary Brayak also said she was happy after February’s election, when her district’s proposal passed as well. Brayak had already seen a prior renewal request for her district fail in November’s general election.
Brayak and other officials found out the hard way that asking for the renewal of a millage – even one that’s been in place for 20 years – is no easy task.
Kulbertis also saw a renewal proposal fail in November’s election, when Gladstone’s measure was voted down 2,652 to 1,846, according to the Escanaba Daily Press.
But with one full year left before the millage expired, Kulbertis said he knew he’d have to go back to the voters, this time with more education and less politics.
The November ballot had six state proposals, all of which were targets of vigorous “Vote No” campaigns. However, local proposals levied by local municipalities or school districts appeared at the end of the ballot.
“There was a whole lot of noise during the November election,” Kulbertis said. “It was quite likely the most cumbersome ballot in our local history and we were tacked on as the last question after everyone was hearing to vote no on the proposals.”
Kulbertis said the district mounted a vigorous effort of its own after the initial defeat, holding public meetings and sending school officials to other organizational meetings to help educate the public on the operational millage – how it came it to be and what, exactly, it’s used for.
“This is a lot more complicated issue,” Kulbertis said. “You can’t necessarily point to what you’re going to spend your money on. We use (the operational millage) to pay our electrical bill, we pay our health bill, put fuel in our buses. It’s not nearly as tangible.”
And the educational effort appears to have paid off.
Gladstone area voters approved a nine-year millage renewal in February’s special election, 736 to 589. The millage will levy roughly $1 million of the district’s nearly $12 million operating budget next year.
MAPS will ask voters for a 20-year renewal in May. The district is mounting an educational effort of its own, sending out brochures and utilizing the front page of the district newsletter to inform people of the upcoming proposal.
“We want to get the message out to as many people as possible,” Barry said. “We’re trying to be very up front and make ourselves available.”
The operational millage has also been discussed at a number of MAPS Board of Education meetings, which are open to the public.
“I think it’s very important (to educate),” Barry said. “We have talked so much about the different types of millages. When they see the word ‘millage,’ people naturally jump to that bond, that debt mill and this is completely separate from that.”
Jackie Stark can be reached at 906-228-2500, ext. 242. Her email address is email@example.com