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May 2 Election

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School Election for voters in the Holland Public School District

Two Proposals - Tuesday, May 2

May 2 School Election
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It’s that time of year again.

On Tuesday, May 2 voters who reside within the boundaries of Holland Public Schools will consider two proposals on the ballot. 

        • The 18 mill “Non -Homestead Property” Renewal for 3 years

        • A 10 year “Sinking Fund” Request for major repairs, renovations, and technology.

        [Here is the GR Press/MLive article from March 28

There are five 45 minute INFO MEETINGS to help people get information. Every meeting will be held in the HPS Admin Board & Training Room at 320 West 24th Street.
•  Wednesday, March 29 at 7 pm

•  Wednesday, April 12 at 7 pm
•  Monday, April 17 at 1 pm
•  Thursday, April 20 at 8 am
•  Thursday, April 27 at 7 pm
 

The 18 mill “Non Homestead Property” Renewal (3 years)

This renewal does not impact the levy on your primary residence.

As part of Proposal A in 1994, this maintains the current levy on industrial, commercial, and second home properties. This renewal represents about $9 million and nearly 30% of the annual HPS OPERATIONAL budget. This renewal has been consistently supported by our community over the last 22 years. 

Q&A: If it is not an increase, then why does the ballot language include the word increase?

In May 2014, the voters of the district approved an 18 mill operating levy.  Because of changes in property values, that millage was reduced by law to less than 18 mills in 2016. This is the result of a Headlee rollboack (see below).  Because this 2017 proposal is restoring the millage back to the full 18 mills previously approved, it is technically an “increase” back to 18, and that is why the word increase needs to be used in the ballot.  But otherwise, this new millage simply replaces what will expire after the 2017 levy plus restore that small amount reduced because of the change in property values. The impact is 0.0954 mills or $47,282. It is a restoration and renewal of what voters approved in 2014.

Headlee can become a factor when an annual election does not take place. The HPS Board of Education desired to be very respectful of calling for elections in the spring for the following fiscal year. This was due to another legislative change requiring school board member elections to now occur in November of even numbered years. The end result could be that the school election is the only item on the ballot in the spring resulting in the district needing to be the sole party responsible for the costs of an election. By having a three year renewal, the district saves on annual elections costs on its own or in part. While some districts may consider a five or ten year renewal, they subject themselves to greater Headlee impact given the fluctuations in property values.

What is a Headlee rollback?

In 1978, Michigan voters approved an amendment to the Michigan Constitution known as the Headlee Amendment. This amendment included a number of provisions related to state and local taxes. These became Sections 25 through 33 of Article IX of the state constitution. 

  • Requiring voter approval for any local tax increases or new taxes established after Headlee was approved
  • Limiting property tax revenue resulting from property tax assessment increasing
  • Limiting revenue collected to the amount the millage originally was to generate (with factor for inflation)

The property tax revenue limitation requires that if the assessed value of a local tax unit’s total taxable property increases by more than the inflation rate, the maximum property tax millage must be reduced so that the local unit’s total taxable property yields the same gross revenue, adjusted for inflation. This is done looking at the total state equalized value (SEV) change from one year to the next. It does so looking at the entire tax unit’s jurisdiction, not based in each parcel. The change of SEV from one year to the next does not include any change that resulted from new construction.

Headlee limited the overall growth of state equalized value for a jurisdiction, not for an individual parcel. So, an individual parcel of property, whose SEV equals one half of the property’s true cash value could, under Headlee, have an increase in taxable value greater than inflation. This would later change under Proposal A.

The millage revenue limitation means that, for example, if a tax base for a local unit increased from $1 million to $1.1 million and the tax rate was one mill, the millage would have to be reduced from 1.0 mills to 0.909 mills, so that total revenue would be the same, $1,000, as originally generated. This was known as a Headlee rollback.

The millage is the amount per $1,000 of taxable property value that must be paid. So, if a home has a value of $100,000, and is assessed a 1 mill tax rate, $100 in taxes are owed. The formula is $100,000 SEV × 1 mill × 0.001 = $100.

Headlee protected property owners from increases in taxes by rolling back the tax rate (millage), but it has had another effect too. It has, along with Proposal A, which was approved in 1994, limited local government revenue, in some cases, to the point where it contributes to budget constraints. With revenue growth limited, even local units that have been fiscally conservative are finding themselves facing uncertain budget situations. Part of this is due to lower revenue from property taxes. The recent recession caused a reduction in property values, which lead to lower property tax revenue for local units. Now, as property values have recovered, the Headlee Amendment and Proposal A have prevented property tax revenues from catching up. While Headlee and Proposal A are far from entirely to blame for many of the fiscal crises Michigan municipalities are facing, they certainly have not made it easier for local governments to deal with these challenges.

The 10 Year “Sinking Fund” Request

Sinking Fund dollars cannot be used for operational needs like textbooks, desks, salaries, snow plowing, and utility bills.

Rather, Sinking Fund dollars help our district address major repairs, large scale maintenance projects, and renovations.

Thanks to new State legislation, districts may now include technology and security upgrades in their Sinking Fund planning and expenditures.

Sinking Fund projects are beneficial in two ways. They support the district’s commitment to keep all of our facilities well maintained, attractive and up-do-date. Plus, since various Sinking Fund projects are paid for as funds come in every year, there is never any debt incurred which require the payment of interest. This results in an overall savings for projects to the taxpayer.

In 1998 and 2007, voters in our community approved the establishment and the continuance of an annual .75 mill Sinking Fund levy for 10 year time periods.

The 2017 “Sinking Fund request on the May 2 ballot asks for a .4 mill increase for one year and 1.25 mills for each of the next nine years, 2018-2026. When this rate is combined with the scheduled reduction in the district’s debt service millage, it works out to a LOWER overall tax levy for district property owners over the 2017-2026 time frame.

 

What would the sinking fund pay for?

With the assistance of GMB Architects & Engineers we continue to do a facility assessment of the systems of our district. As responsible property owners, we want to ensure that our facilities are well maintained over the next ten years. Each of the systems and specific areas have been rank ordered by life expectancy and prioritized on a Sinking Fund Projects List The sinking fund would generate annual interest fee funds (different from a bond) that would be used to address ongoing facility needs. In addition to the building projects, with the assistance of the state legislature, technology/safety upgrades may now also be paid for with sinking funds. This ultimately saves on interest as well when technology/safety have been typical bond projects.

What is the overall impact on our tax payers over time?

In preparing for this request we wanted to make sure it was a thoughtful consideration of identified projects through 2026 and the amount of debt/tax levied in our community.

 

School District Of the City of Holland Debt and Sinking Fund Millage Analysis

To learn more, please consider this video screencast http://www.hollandpublicschools.org/vimages/shared/vnews/stories/588bc64dcca46/Recording%20%235.mp4

How will this impact my taxes?

$50,000 SEV

$100,000 SEV

Sinking Fund Year 1 (.75 + .4) +$20/year=$57.00

Sinking Fund Year 1 (.75 + .4) + $40/year=$115

 

 

For Nine Years

For Nine Years

.75 mills to 1.25 mills +$25.00/year=$62.50

.75 mills to 1.25 mills +$50/year=$125.00

 

 

As the school debt is paid down, and East K-7 School Debt retired,  the total levy decreases from 7.50 mills down to 4.78 mills

As the school debt is paid down, and the East K-7 School Debit retired, the total levy decreases from 7.50 mills down to 4.78 mills

The total school debt + the sinking fund=

$375 down to $239/year

over the ten year period

The total school debt + the sinking fund=

$750 down to $478/year

over the ten year period

*the above figures are based upon approximations and assessed property values based upon paying off bonded debt. Sinking fund mills are collected each year at the designated mill interest free.



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