BY BTL STAFF
ROYAL OAK – Royal Oak residents will decide this election whether to approve a small increase on the non-homestead property tax to bring the millage up to the approved 19 mills.
According to the Daily Tribune, superintendent Shawn Lewis-Lakin said the Royal Oak school district is seeking a 0.8-mill increase on the millage to allow the district to keep the non-homestead tax rate at a steady 18 mills. The millage increase would raise the tax rate by 80 cents for each $1,000 of taxable value on properties affected by the millage.
Millage is a tax on businesses and houses that are not the owner’s primary residence and are directly tied to the value of the home. Millages have no effect on the property tax rates of homes where the owners live all, or most, of the year.
The millage is part of a requirement that school districts have to pass in order to get their full funding from the state under state Proposal A, which went into effect in 1994.
Since 1994, voters in Royal Oak have supported an 18-mill operating levy on non-homestead properties, as have voters in virtually all school districts nationwide, Lewis-Lakin said.
Another state act, the Headlee Amendment would, however, require that property taxes be allowed to rise no more than 5 percent of the rate of inflation, whichever is less, when property values increase.
The Nov. 8 ballot proposal “provides a mechanism so we can keep the millage at 18 mills,” Lewis-Lankin told the Daily Tribune. “It provides a buffer to protect us against future rollbacks.”
The school district’s 18-mill operating millage has been reduced by 0.15-mill because of what is called the Headlee rollback.
Under the current program, district officials estimate that Royal Oak Schools will lose more than $133,000 in funding for the 2016-2017 school year if the millage restoration proposal fails at the polls. The amount of money seems like a drop in the bucket, compared to the district’s annual $55 million budget, but it can have a cumulative effect moving forward in subsequent years. Adequate funding for schools has an effect on home values.
“The rollback could be $250,000 next year and maybe $500,000 in four years,” Lewis-Lakin said to the Daily Tribune.
The millage restoration proposal is technically considered a Headlee override. According to school officials in a conversation with the Daily Tribune, if approved by voters, the new provision will allow the district to offset rollbacks to Royal Oak schools non-homestead millage from 2016-2020.
Nearby Ferndale Schools included a similar measure on the ballot last year as part of the district’s renewal of its non-homestead operating millage. Ferndale voters approved the measure last year.
Royal Oak voters approved the renewal in 2013 when it was last up for vote. Such millages pass routinely with no organized opposition in Oakland County since they first began in the late 20th century.