The vast majority of Ann Arbor voters Tuesday opted to increase the funds collected by public schools. The millage renewal proposed by the Ann Arbor Public Schools Board of Education passed with 76 percent in favor.
A school millage rate is a decided amount of money per $1,000 of property value that goes toward property tax, which in turn funds public schools. In Ann Arbor, this tax is the public school system’s main source of revenue. Members of the AAPS Board of Education say the operating millage affected by Tuesday’s vote will impact the taxes levied on non-homestead properties, including businesses and rental properties, rather than homeowners.
Effective for the next 20 years, the vote renewed the existing millage of 18 mills, or dollars per $1,000 value, and added an upper limit of 21 mills. The new 3-mill cushion gives the AAPS Board of Education more flexibility in dealing with the Headlee Amendment, a decades-old piece of state legislation that allows towns to roll back millages when property values increase more quickly than inflation. The amendment was designed to limit property taxes, but according to Board President Christine Stead, it complicates school funding. Stead claims rising property values coupled with the Headlee Amendment have produced financial losses for the Ann Arbor public school system.
“Even though property values are increasing, you’re going to be at a slower-paced recovery because of the Headlee Amendment,” Stead said. “The gap can get bigger and bigger, and so for us, the Ann Arbor Public School District, that difference between what we’re collecting and what we should be collecting is equal to $1.3 million.”
The 3-mill buffer will enable the AAPS Board of Education to collect its state-mandated goal of a full 18 mills. Because of the Headlee Amendment, it currently collects only 17.5957 mills on non-homestead properties. The new millage will raise an estimated $84.7 million in funds for the public schools this year.
Marios Demetriou, the AAPS assistant superintendent for finance and operations, said the school district needs to be able to levy the full 18 mills because it previously has suffered from insufficient funding due to Headlee rollbacks.
“The state assumes that you collect the full 18 and they give you the rest,” Demetriou said. “So if you’re not collecting the full 18, then you’re getting penalized.”
Stead thinks the chances of any unhappiness with the millage renewal are low because it impacts businesses, not homeowners.
“It is part of the structure we’ve had in place since 1994, where businesses contribute something in their taxes toward public education,” Stead said. “I think our businesses, particularly in Ann Arbor, understand how important it is to have a high-quality public education system because they use that to recruit and retain their employees.”
Some Ann Arbor residents, however, see the increased millage as more than just a simple decision to support public education. One Ann Arbor resident, Patricia Petiet reached out to The Daily, expressing concern that rents will increase in Ann Arbor as the taxes levied on rental businesses go up. Though homeowners will not experience steeper property taxes under the renewed millage, MLive reported in April that non-homeowners will pay slightly more.
Petiet’s husband, Thomas Petiet believes the Tuesday vote will harm renters.
“What they claim is a renewal is actually an additional tax,” Petiet said.
But according to Demetriou, there’s nothing new about the decision. Voters approved an 18-mill tax on non-homestead properties in 2009, as required by the state of Michigan. The AAPS Board of Education states it will never collect more than 18 mills; it will simply use the new 3-mill cushion to adjust for Headlee rollbacks, so that millage always stays at 18.
“The people who are the landlords, they own the businesses and so forth, are going to be paying 18 mills, which is what the state mandates,” Demetriou said. “Even though the voters approved 21, we are only allowed to levy 18.”
Overall, the AAPS Board of Education is pleased with the results of the vote. In a letter sent out to the community Tuesday, AAPS Superintendent Jeanice Swift thanked voters for their help in maintaining a high quality of public education.
“Our current students, as well as future generations of students, will benefit from the outcome of this affirmative vote,” Swift wrote. “We appreciate the strong support from our community in approving this Operating Millage that supports the ongoing, day-to-day operating expenses for the Ann Arbor Public Schools.”
Stead agreed the vote demonstrates a steady interest in helping the school district.
“I don’t think this is a particularly controversial vote,” she said. “It’s just a very basic question that we’re required by law to ask the community on occasion, which is, ‘Do you want to continue to fund public education or not?’”