Ask ELi: Two School Millages on November’s Ballot?

Wednesday, October 10, 2018, 11:00 am
By: 
Karessa Wheeler

A regular ELi reader asks:

“I am looking at my absentee ballot and there are two East Lansing school millage proposals on the ballot. Those caught me unaware. Tried to find out about them on the District's website. Couldn't find anything there. Are these renewals or requests for more money? Suggestions where I might some information?”

East Lansing Public Schools Superintendent Dori Leyko announced at the September 24, 2018, Board of Trustees meeting that the District would be asking District residents to approve two millage proposals this November 6.

However, both replace current millages set to expire at the end of the year so, in effect, they generally maintain the current levels of funding without adding any additional revenue to the school system.

“If voters were not to pass the Operating Millage [this November], the District’s foundation allowance would drop from $8,289 per pupil to $5,596 per pupil,” Leyko said.

The issue is somewhat confusing, because the District isn’t allowed by State law to call either proposal a “renewal.” That’s because they are slightly different either in amount or purpose from the current millages.

We reached out to Leyko and District Finance Director Rich Pugh for deeper explanations for ELi readers.

According to Pugh, the first request is effectively a renewal of the current operating millage proposal. The operating millage pays for things like teacher salaries and benefits, classroom supplies, building heating and electricity, transportation, custodial services and more.

The current operating millage of 18.2597 was passed in November 2008 and is set to expire at the end of this year. That millage has been reduced by Headlee rollbacks to 17.9795 mills over the last ten years, Pugh said.

Headlee rollbacks stem from the Headlee Amendment of the Michigan Constitution in 1978, which requires local governments to automatically reduce their millages when annual growth on existing property is greater than the rate of inflation. In effect, the Headlee Amendment causes tax rates to be automatically “rolled back” to the rate of inflation, which means that, during economic periods like this, millage income drops for the District.

The District is seeking a Headlee rollback cushion in the new millage proposal, in order to protect the Districts’ finances in coming years.

“Because we are asking voters to approve 22 mills, of which 4 mills is to provide potential Headlee Rollback protection [in coming years], we can't use the word ‘renewal’ in the ballot language. By law, only a maximum of 18 mills can be levied. It is necessary to levy the full 18 mills in order for the District to receive its full per pupil foundation allowance authorized by the State under Proposal A,” Pugh said.

What Pugh means is that the district is looking to have voters approve 22 mills so that there will be a substantial cushion in the event future Headlee rollbacks cause the millage rate to drop. The state only allows levying of 18 mills. But with that 4-mill cushion, if the millage passes, the district can bank on having the full 18 mills levied each year, regardless of future Headlee rollbacks, during the life of the millage.

This new ten-year Operating Millage proposal is on non-homestead property only, which means principal residences are exempt.

The second proposal is essentially a renewal of the current ten-year sinking fund millage, at a reduced rate. But the word “renewal” cannot be used in the ballot language because, as Pugh explains:

“The current Sinking Fund levy was approved when it was not allowable to use Sinking Fund dollars for instructional technology and security. New legislation now allows for this expanded usage by the Sinking Fund. In order for the District to have the option to use Sinking Fund dollars for instructional technology and security, the proposal to voters is characterized as an increase because we have added those new purposes to the Sinking Fund."

Voters are being asked to approve 1.0 mill, which is a reduction of 0.277 mills from the current Sinking Fund Millage of 1.277 mills.

If passed, this millage would generate approximately $1.1 million annually for building repairs and renovations, site improvements, school security, and instructional technology, Leyko said.

The administration has sent out informational flyers to residents (see them here) and will be hosting an informational forum on the ballot proposals at 6:30 p.m. Thursday, October 25, in the MacDonald Middle School Library.

Update: After this article was published, we added a paragraph explaining the idea behind the 4-mill cushion built into the Operating Millage proposal.