It’s been more than 20 years since local school districts in Michigan have been able to raise revenues through a millage for operational expenses. More than two decades ago, a change in the law shifted how schools were funded and left it to the state to dole out money to local districts.
However, some educational leaders say state appropriations haven’t kept up with school needs. Since local schools can’t hold a millage to fill this shortfall, Kent Intermediate School District is proposing a regional enhancement millage that will benefit all schools within the ISD.
Proposal A: Lowering property taxes, limiting revenue options
At the heart of the issue is Proposal A. Passed by Michigan voters in 1994, the amendment to the state Constitution eliminated the use of property taxes as the primary funding source for K-12 education. Instead, the state sales tax was increased from four percent to six percent, with the entire two percent increase devoted to school funding.
Prior to its passage, there were large disparities between school districts in terms of funding. Affluent areas benefits from high home values while rural and less affluent districts struggled to bring in enough to cover costs. The severity of the situation for some districts was made painfully obvious when Kalkaska schools closed its doors 10 weeks early in 1993. The district went to voters three times to request more money and when those millages were shot down, the school said it had no choice but to end classes early.
Now, schools get most of their funding through a per-pupil grant from the state. The system has had a dual effect of lowering property taxes for many people while also equalizing the amount of money spent on education in each district.
While an improvement in many people’s eyes, education leaders say it’s an imperfect system. State funds haven’t always kept pace with school needs. Plus, taking away the option to pass a millage for operational expenses ties the hands of districts that could use more money to update technology, add teachers or expand educational programming.
“Strong Schools Strong Communities” proposes a county-wide millage
Proposal A prohibits individual schools districts, such as Lowell Area Schools, from putting a millage to pay for operational expenses on the ballot. However, it does allow intermediate school districts to administer a regional enhancement millage on behalf of its member districts.
During the May election, KISD will ask voters in 20 local school districts, including Lowell, to pass the Strong Schools Strong Communities proposal. The proposal will assess a .9 mill tax assessment on all properties in the district. If approved, the assessment will begin this year and run through 2027. That money will be collected by KISD and then distributed to local school districts on a per-pupil basis.
Since the money is being distributed on a per-pupil basis, there is a chance some districts may contribute more to the millage than they get back from KISD. However, local officials believe Lowell Area Schools may be one of the districts to get more back from the proposal than what residents will pay in. It’s estimated the district will receive $803,000 during the first year the millage is in effect.
What it will cost Lowell property owners
Lowell school officials anticipate the money will be used for technology upgrades – such as smart boards, Google classroom training and the like – as well to support early learning initiatives. While no one is likely to argue with the benefit of these programs, for some residents, their support may boil down to the bottom line.
At .9 mills, the proposal is hoped to provide needed funds to schools without significantly raising property taxes. One mill equals $1 per $1,000 of a property’s value. In other words, a $100,000 house will pay $100 per year in additional property taxes for that one mill.
However, the Strong Schools Strong Communities proposal is .9 mills, which equals 90 cents per $1,000 of property value. That means a $100,000 home will pay $90 per year in additional taxes for the proposal.
The chart below provides the annual and monthly increase in taxes at varying property values.
|
State Equalized Value |
$150,000 | $200,000 | $250,000 | $300,000 | $400,000 | $500,000 |
|
Taxable Value |
$75,000 |
$100,000 |
$125,000 | $150,000 | $200,000 | $250,000 |
|
Increase in Taxes (Annually) |
$68 |
$90 | $113 |
$135 |
$180 | $225 |
|
Increase in Taxes (Monthly) |
$5.63 |
$7.50 |
$9.38 | $11.25 | $15.00 | $18.75 |
Note: Mills are assessed on a property’s taxable value, not its market value. The taxable value is typically 50 percent of the market value. That means if you can sell your house for $100,000, your taxable value is likely $50,000. In that case, you would pay only $45 a year for the millage. Check your tax assessment notice for exact figures.
KISD estimates the average homeowner will pay $80.40 each year for the millage. It also has has a calculator on its website (under “millage cost”) that allows residents to check their estimated cost. Note that this calculator asks for your home’s market value, not its taxable value. “That’s what most people know that’s why we put it there,” explains Ron Koehler, assistant superintendent for organizational and community initiatives for KISD.
The Strong Schools Strong Communities millage will be on the May 2, 2017 ballot.
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