ELK RAPIDS — In the May 6 election, Elk Rapids Schools is asking voters to OK replacing an incremental portion of its operational millage levy that was lost due to a Headlee rollback.
Unexpected property value growth that occurred during and after the COVID-19 pandemic triggered the rollback, Superintendent Bryan McKenna said.
The Headlee Amendment limits property tax increases to 5 percent or the rate of inflation, whichever is less. When property value growth exceeds the rate of inflation, like it has in Elk Rapids in recent years, the taxes levied are “rolled back” as the state applies the lower inflation rate.
So if the taxable value goes up faster than inflation, the millage rate typically has to be reduced. And that means a district can be left collecting funds at a rate lower than the 18 mills that was approved by voters.
This is what happened in Elk Rapids, which is currently collecting 17.9316 mills — or 0.0684 of a mill less than what voters there approved, McKenna said.
The proposed 4-mill adjustment requested on the May 6 ballot would allow the district to adjust the millage rate incrementally so it can collect the total 18 mills for the duration of the original operating millage until 2028.
Operating millages fund routine requirements like payroll, utilities, classroom supplies, and maintenance. They also cover the cost of athletics and extracurricular activities.
The millage, required by the state for schools to receive any state funds, is capped at 18 mills. But Elk Rapids became an out-of-formula district this school year and only receives supplemental funding from the state.
“We are funded by the operating millage, except for restricted funding provided by the state and federal grants,” Mckenna said.
The proposed millage adjustment would raise approximately $58,635 this year – if voters approve and the 0.0684 of a mill was applied to bring the operational levy to 18 mills.
If the proposal fails, the district administration and Board of Education will need to evaluate the financial impact on the school district. This can be difficult to calculate ahead of time, McKenna said, because of all the unknown factors that can impact property values and millage rates.
“We are optimistic that the Elk Rapids Schools voters will continue to support the education of the students in our community,” McKenna said. “The 4-mill restoration of the 18-mill operating millage is critical to our success in sustaining and maintaining Elk Rapids Schools now – and into the future.”