What's on the ballot? Part I - The Operating Millage

Ballot proposals always seem to be written so that only a lawyer could understand them. Anyway, who has time to read them while people tap their feet waiting for your voting booth? Fear not, dear reader – we’re here to help.

What you’ll see on the ballot: What it really means:


The Public Schools of the City of Ann Arbor (the District) is authorized by State law to levy a voter-approved millage of up to 18.00 mills on non-homestead property (industrial, commercial and rental property) and up to 12.4675 mills on owner-occupied residential “principal residence” or “homestead” property. The amount levied on principal residences for the 2007-08 school year was 4.7232 mills. The total operating levy provided 51% of the District’s $9,667 per-pupil operating funds for the 2007-08 school year. The authority to levy this millage expires with the 2009 tax levy. The original authority to levy 18.00 mills has been rolled back to 17.9694 mills by application of the Headlee Amendment to the Michigan Constitution. This proposal would restore and continue the District’s authority to levy this millage for an additional ten years, and would allow the District to receive the full foundation allowance revenue permitted by law.

The two property tax levies described at left provide our local contribution to school operating funds, about half of the total school budget. These taxes are approved locally and the proceeds stay local. However, if we don’t collect these taxes, the State government will not make up the difference.

State law allows all school districts to levy 18 mills of property tax on commercial (non-homestead) property. In fact, districts are expected to levy this tax, and the state authorities assume it will be collected when they calculate state aid payments.

Some districts, including Ann Arbor, were already spending more than than the new State maximum per pupil when Proposal A took effect in 1994. Those districts were given special permission to levy local taxes on “homestead” property to collect the extra amount – this was known as the “hold harmless” tax. For Ann Arbor, the extra amount was $1,234 per pupil; each year, the district must adjust the “hold harmless” tax so that it collects only $1,234 per pupil and no more. The tax rate needed to do this in 1994 was slightly over 12 mils; as property values rose, the tax rate declined. This year, the rate was a bit over 4.7 mils.

Special provisions in the state constitution (the Headlee Amendment) force property tax rates to be cut if property values are growing faster than inflation. This “Headlee rollback” reduced the school millage on commercial property from what had been approved by voters last time; as a result, the district was not getting the full amount allowed by the State formula. The new rate would be reset to the allowed 18 mils if this proposal passes.

To provide operating funds for the Public Schools of the City of Ann Arbor, County of Washtenaw, shall the limitation on the taxes that may be levied upon taxable property in the District be increased by 18.00 mills ($18.00 per $1,000 of Taxable Value) for non-homestead property of which 12.4675 mills ($12.4675 per $1,000 of Taxable Value) may be levied on principal residences and qualified agricultural property, for a period of ten (10) years, 2010 through 2019 inclusive? For the year 2010 tax levy, this authorization would allow the District to raise approximately $66.9 million from non-homestead property and $20 million from principal residences and qualified agricultural property.

__ YES
__ NO

Once the current tax, approved by the voters in 1999, expires, the “limitation on the taxes that may be levied” returns to zero. So we are replacing the expiring tax with an identical new tax. State law does not allow the district to call this a renewal, even though that’s exactly what it is.

For the tax on residential property (the “hold harmless” levy), the district needs to ask voters to approve the orignal rate, even though the rate they will actually charge will be much less because property values are higher.

For the curious (and brave): MCL 380.12118.57 KB