GRAND RAPIDS, MI – Grand Rapids public schools are asking voters to consider a tax proposal on Aug. 3 that will make up a large portion of the district’s annual operating income.
The proposal made on Tuesday, August 3, for mills without homesteads applies to second homes, rental properties and companies for the purpose of financing school operations. The tax is not levied on primary residences.
The Millage is used to fund business expenses such as textbooks, technology, classrooms, and other school expenses. It generates $ 30 million annually for GRPS, which is 15% of the district’s total operating budget.
While school districts cannot collect more than 18 mills per year under state law, GRPS is looking for 23 mills for operational purposes for seven years, 2021 to 2027. Officials say the additional 5 mills will protect against possible revenue cuts due to automatic millage rate rollbacks to keep collecting the full 18 mills.
Michigan’s Headlee Amendment limits property tax increases to the rate of inflation. When the taxable value of real estate increases faster than the rate of inflation, the actual tax levy is withdrawn and funding is reduced in what is known as a headlee rollback.
The district leaders have emphasized that homeowners do not incur any costs. If approved, it is a property tax that is only levied on commercial, industrial and other “non-homestead” properties.
“For the vast majority of voters, that’s not even on their tax bills,” said district spokesman John Helmholdt during a school council meeting on July 19.
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GRPS expects a headlee rollback in its operating volume due to “skyrocketing” real estate values, said Helmholdt.
The operating aid is required by the state so that the district receives the student-related foundation grant as state aid.
To counter the effects of a headlee rollback, voters must choose to return the mills at the originally approved amount – for public schools, there are 18 mills to operate.
Grand Rapids voters previously approved a 19 million homestead millage to address the same headlee rollback issue. The proposal was accepted without any problems in the November 2017 elections with 71% of the vote.
In recent years, taxable values in the city of Grand Rapids have increased between 4.5% and 6% annually, which translates into annual headlee rollbacks of between 0.20 and 0.25 million, according to a GRPS press release.
School principals expect a rollback this year that would bring the approved millage rate below the $ 18 million ceiling, resulting in lost revenue of up to $ 250,000.
Last August, voters approved non-homestead mills for counties including: West Ottawa, Holland, Allendale, Zeeland, Coopersville and Hamilton.
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