By Jason Wesseldyk
Sports Editor
On Tuesday, Aug. 8, voters in the Otsego Public Schools District will determine the fate of an 18-mill non-homestead millage that makes up more than seven percent of the district’s annual operating budget.
This millage, which has been in existence since 1994, was last approved by voters in 2014. It must be approved every 10 years.
If it passes, the new millage would take effect immediately and run through 2032.
As a non-homestead millage, passage would not affect the property taxes for a family’s or individual’s primary residence.
“Families will not see an increase in their taxes if the non-homestead millage passes,” Otsego Public Schools superintendent Jeffery Haase said.
Rather, the levy is applied to commercial properties, rental properties, second homes and some agricultural properties.
According to district officials, the non-homestead millage makes up $2.2 million of the OPS’s annual budget. This amounts to approximately 7.6 percent of the total budget.
If the millage does not pass, the district will lose this funding and cannot replace it with any other funding source.
“Renewal of the non-homestead millage is essential to maintaining the current programs offered by the district,” the district said in a release. “If the non-homestead millage does not pass, the district will need to look at reducing or eliminating programs to offset the loss of revenue.”
The non-homestead millage was created in 1994 following the passage of Proposal A. Under this proposal, all public-school districts in Michigan are required to seek voter approval of a non-homestead.
“The funds generated by the non-homestead millage are an important funding source for the operations at Otsego Public Schools,” the district stated. “While primary households are not affected by this millage, state law requires a district-wide election to approve the millage.”
District officials created the following list of frequently asked questions as a way of providing information to voters:
What does non-homestead mean?
Non-homestead represents industrial, commercial, second homes and some agricultural property. It does not include a family’s primary residence.
Is this a new tax?
No. It was first levied in 1994 with the passage of Proposal A. OPS asks for this Non-Homestead Millage every ten years. The Non-Homestead millage was last approved by voters in 2014. The current millage expires June 30, 2024.
What happens if the millage does not pass?
If the non-homestead millage is not approved, Otsego Public Schools will lose $2.1 million in revenue and the District will not be able to assess the full 18 mills that voters approved in 2014. Due to the Headlee rollback, the district currently assesses 17.2674 mills. This amounts to $2.1 million in lost revenue.
The State of Michigan will not replace the lost revenue; therefore, Otsego Public Schools would have to reduce programs and staff to reach a balanced budget.
Why this millage at this time?
Otsego voters approved this millage almost 10 years ago. It is now time to renew it for the next 10-year period.
Is this millage part of the recent bond extensions?
No. The Non-Homestead Millage is a separate funding source and is strictly for operating expenses.
Why is Otsego Public Schools asking for 19 mills when the state only requires 18 mills?
Legally, Otsego Public Schools is only allowed to levy a maximum of 18 mills. Due to the Headlee Amendment, the 18 mills is rolled back each year and the district is currently assessing 17.2674 mills on non-homestead property.
The district is seeking a millage increase back to 18 mills of the currently authorized 17.2674 mills, which would otherwise expire on June 30, 2024. The district has lost 0.7326 mills as a result of the Headlee rollbacks. The remaining 1 mill would serve as a means to protect against future Headlee rollbacks. By approving more than 18 mills, voters can help guarantee a more stable budget for the district by ensuring the district is able to collect taxes on non-homestead property at the full 18 mills.
I thought schools no longer received funding through property taxes. Why is Otsego Public Schools asking for a millage replacement and restoration?
Funding for Michigan school districts changed significantly when voters passed Proposal A in 1994. Under Proposal A, the state funds a portion of public-school districts, but to receive full funding, schools must levy 18 mills on non-homestead property in the district.
I live in the Otsego Public Schools district. If the non-homestead millage renewal passes, will my property taxes increase?
No. The tax only applies to non-homestead properties like commercial, industrial or rental property, not your primary residence.
What is the ballot language?
“This proposal will allow the school district to levy the statutory rate of not to exceed 18 mills on all property, except principal residence and other property exempted by law, required for the school district to receive its full revenue per pupil foundation allowance.
“Shall the limitation on the amount of taxes which may be assessed against all property, except principal residence and other property exempted by law, in Otsego Public Schools, Allegan, Kalamazoo and Van Buren Counties, Michigan, be increased by 19 mills ($19.00 on each $1,000 of taxable valuation) for a period of 10 years, 2023 to 2032, inclusive, to provide funds for operating purposes; the estimate of the revenue the school district will collect if the millage is approved and 18 mills are levied in 2023 is approximately $2,240,000?”
I own agricultural land. How does this impact me?
Some agricultural land may be included in the Qualified Agricultural Exemption.
Visit the following for specific details: https://www.michigan.gov/-/media/Project/Websites/taxes/MISC/2005/2005_Qualified_Agricultural_Prop.pdf?rev=8329d8490fd04f81b95c48b5561c8388