A proposal for non-homestead millage taxation was on the agenda at the last three meetings for the Clarkston Schools? Board of Education and is expected to be part of the Jan. 9 agenda.
The board is debating ballot language to be turned over to voters on May 2, 2006. Voters will decide whether or not to levy a millage tax on non-homestead property within the district. The district’s current 18 mills and 4.5 restoration mills are set to expire at the end of this year.
As discussion about ballot language began at the Dec. 12 school board meeting, Clarkston Schools Superintendent Dr. Al Roberts stressed that state government expects districts to collect 18 mills from non-homestead property tax.
‘We need to collect the 18 mills that (the state) expects us to collect,? said Roberts.
Non-homestead property includes local businesses, rental properties and second homes. Collectively, non-homestead taxation accounts for approximately $7.9 million collected annually for school funding, according to a presentation to the board by Anita Banach, director of communications and marketing and Bruce Beamer, executive director of business and fincancial services.
During the recent board meetings, board members discussed the district’s millage options and the way the ballot should be worded when presented to voters.
This debate over ballot language is complicated by the effects of Proposal A and the Headlee Amendment on the district’s funding.
As a result of Proposal A, public school districts can only levy a maximum of 18 mills for non-homestead taxation annually. If voters approved a long-term millage, the 18 mills would apply every year until the millage expired. However, due to Headlee rollback, an 18 mill tax this year may not be worth 18 mills next year.
The Headlee Amendment, which went into effect years before Proposal A, requires a millage to decrease every year that property growth is greater than the rate of inflation. This process is known as ‘Headlee rollback;? and in Clarkston, reduces non-homestead millages by approximately .4 mills annually.
As a result, a long-term millage could reduce significantly in an area, like Clarkston, that experiences long-term property growth.
To compensate for this rollback, the Clarkston School district passed a second millage in 2004, often refered to as a ‘restoration? millage, set at 4.5 mills. This second millage is also affected by Headlee rollback.
Though the two millages combined are greater than 18 mills, the district is restricted by Proposal A to collecting only 18 mills. The additional millage acts as a buffer zone; not being collected, but the additional amount prevents the collectable millage from falling below 18 mills.
Passing long-term restoration millages keeps the funding level stable and allows the issue to go several years without being voted on. However, the millage also keeps the amount of taxes levied on local businesses and other non-homestead properties constant and cannot be changed until the millage expires.
When discussion of upcoming ballot language options began, the school board was presented with four options:
a) Renew the current non-homestead millage (18 and 4.5 restoration)
b) Renew the current 18 mills and establish a new 4.5 restoration mills
c) Establish new 18 mills and 4.5 restoration mills for 10 years
d) Renew 18 mills and allow for restoration votes every year.
Attention was given to whether a millage is being renewed or a new millage is being established, the important difference being that renewed millages are already effected by Headlee rollback and newly established millages are not. Therefore, a renewed 18 mill may not be worth the full amount anymore, while a new millage will start at 18.
After the first discussion, options c) and d) were eliminated, and the first two options were reworked for further discussion. Option d) would put the decision to renew the district’s millage rate in the hands of voters every year.
At the most recent board meeting, board members further discussed details of the two options.
If passed for 10 years, option a) would give the district two years before Headlee rollback would bring the collected millage below 18, at which point, an additional restoration millage would be required if the district wanted to maintain the maximum collectible level. That means voters could be discussing the issue again as early as 2008, but business owners could get a rest as the tax amount decreases.
Option b) requires the establishment of a new restoration millage, which would sustain the millage level rate above 18 mills despite Headlee rollback for 10 years, but voters would be unable to make a change in the tax rate until the millage expires.
If chosen, option a) would be a single question for voters, while option b) would require two questions ? one for the 18 mill renewal and one establishing the new 4.5 restoration mills. Regardless, voters would be required to vote for both, and could not establish the 4.5 restoration mills without renewing the 18 mills.
The board wondered if the ballot language will confuse voters and what the established time-length of the proposal should be. The length of the proposal is not yet established.
At the end of discussion, the board agreed the administration should obtain legal advice for rewording the ballot language.