District to lose $5M if voters don’t keep operating tax going

More than $5 million in annual revenue will be lost by the Oxford school district beginning next year unless voters approve an operating millage proposal on the Aug. 2 primary election ballot.

“It would impact every student, every family,” said Superintendent Tim Throne. “We would have to make unprecedented cuts in this district to (equal) that amount of money.”

Oxford voters are being asked to decide the fate of a 10-year, 18.4442-mill operating tax on all non-homestead property in the district. If approved, it would be levied from 2017 through 2026.

One mill is equal to $1 for every $1,000 of a property’s taxable value.

Non-homestead property includes businesses, commercial and industrial properties, second homes, vacation homes, rental properties and vacant land not adjacent to an owner’s homestead property. Excluded are principal residential (homestead) and qualified agricultural properties.

The district’s current 17.9442-mill operating tax expires with this year’s levy in July. State law allows districts to levy up to 18 mills on non-homestead properties for operating purposes.

Oxford district voters first approved the 18-mill tax in 1996, then renewed it in 2006. The Headlee Amendment has reduced it to its present rate.

Headlee requires local units of government, including school districts, to reduce, or roll back, millage rates whenever the annual growth in property values is greater than the rate of inflation.

Although 18.4442 mills is being requested on the Aug. 2 ballot, that’s not the amount that would actually be levied.

Throne said the district doesn’t yet know how much this year’s Headlee rollback is going to be. Therefore, the millage rate on the ballot is an estimate that represents an attempt to offset the coming reduction, so next year, the district can begin levying the hopefully-renewed operating tax at the full 18 mills or as “close to (it) as possible,” he explained.

“It is our best guess,” Throne explained. “It could come in a little below. It could come in a little above. This is just our best shot to try and get it back to 18, where we want it to be.”

“If this thing hits (at) exactly 18 mills, then I’m going to go buy a Lotto ticket,” Throne joked.

The superintendent stressed the 18.4442-mill request is not an attempt to provide the district with an ongoing buffer against potential Headlee rollbacks in the coming years.

“It’s not like we’re trying to ask for 19 mills, so that we (have) got a cushion for another two or three years,” he explained. “We’re trying to get it to 18 (for the start of this proposed 10-year levy). We know we’re not going to be exact, so people can either be mad that we didn’t get there or mad that we went a little over.”

If the tax is approved and levied at the state-allowed maximum 18 mills next year, it will generate an estimated $5.35 million in revenue, according to the ballot language.

How important is this to the district?

“It is extremely vital,” Throne said. “That’s roughly 10 percent of our (general fund) budget.”

“While 10 percent may not sound (like) a lot, practically-speaking, it would (have a) huge (impact on) our budget,” he added.

To put that in perspective, Throne said even if the district were to eliminate the entire transportation portion of the budget, additional cuts would still need to be made to make up for the lost revenue.

“(This millage is) extremely important to the district. Can’t say that enough,” he said.

If the operating tax is lost, there is no alternative. “It’s not like we have any other source to go to (and) recapture this (revenue),” Throne said.

The state will not provide the district with any additional funding should the millage proposal fail.

“They will not give us one penny toward that 18 mills,” Throne said.

In fact, part of Michigan’s system for funding schools is based on the premise that districts collect the full 18 mills every year, even though they don’t. This amount is then subtracted from the per-pupil foundation allowance each district receives from Lansing.

“Not a lot of people understand that,” Throne said. “Most people do not understand that the state is assuming you are levying your entire 18 mills. They take that for granted, like a given. That’s just the way it is.”

“If we didn’t (have the operating tax), then we’d be in a world of hurt,” he added.

 

2 responses to “District to lose $5M if voters don’t keep operating tax going”

  1. Anything over 18 mils violates the spirit and intent of the Headlee Amendment. This is not the first time that OCS has tried this and CJ called them on it in the past.

  2. Tired of the fear-mongering politics. Guess what? If I don’t have the money to go to Aruba, I don’t go to Aruba. The economy has not come back and will never be like it was before 2008. If we have to go down to a bare bones budget, so be it. Take all the fluff stuff out of the budget and keep the essentials, like teachers, transportation for students only, books, custodians (bring it back in-house and hire our own neighbors), classes like OTEC on-site (building permitted) etc.

    If we have to abolish or cut back on all the “extra” programs (IB, OVA, Weiming etc) in order to make ends meet and keep to the basics in order for our students to truly “compete” in the real world of work, including blue collar careers, then let them go.

    If the State is not giving us our money back, there’s a problem with the way our taxes are collected and used and maybe we need to do some FOIA with the State school board.

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