On May 3, Oxford school district voters will go to the polls to decide the fate of a two-year, 2.3549-mill increase on non-homestead property.
Non-homestead property includes businesses, commercial properties, second homes, vacation homes and rental properties. Excluded are principal residential and qualified agricultural properties.
State law allows districts to levy up to 18 mills on non-homestead property for operating purposes. A mill is equal to $1 for every $1,000 of a property’s taxable value.
Currently, the district is levying 15.6451 mills on non-homestead properties due to property tax rate rollbacks caused by the Headlee Amendment.
Under the 1978 Headlee Amendment, local governments are required to reduce their maximum voter-authorized millage rates whenever property values rise faster than the rate of inflation. The reduction is commonly referred to as a Headlee rollback.
This millage proposal is particularly important for the district considering it’s facing an anticipated budget shortfall or deficit of $3,493,937 for the 2005-06 school year. Next year’s projected expenditures for the district total $36,211,712 while revenues total $32,717,775.
‘The bottom line is when the money coming in stays the same and the cost of doing business goes up you have a gap,? said Superintendent Virginia Brennan-Kyro.
Some of the largest expenditure increases contributing to this anticipated $3.5 million shortfall include an additional $705,305 for health insurance; a $984,171 increase in employee salaries due to contractual obligations; a $403,935 increase for the state-mandated retirement system for school employees; plus another $58,256 in gas increases to heat the district’s buildings.
Add to those increased expenditures a projected $712,000 in ‘lost? revenue due to the state’s false assumption the district consistently levies 18 mills on non-homestead property annually.
When the state allocates its per-pupil foundation grant money to the district, it assumes the maximum 18 mills is being levied every year, according to Assistant Superintendent Ron Franey.
But because of Headlee rollbacks this is not the case, resulting in a gap between what the state doles out and what’s actually being collected in non-homestead property taxes, Franey said.
For instance, for the 2004-05 school year, the state assumed the district was levying 18 mills on $262,159,442 worth of non-homestead property, resulting in a collection of $4,718,870 in taxes.
But in reality, 15.6451 mills was levied, resulting in an actual tax collection of $4,101,511. The state calculated the district’s per-pupil foundation grant based on the 18-mill collection figure, resulting in a $617,359 funding shortfall for 2004-05.
Franey explained that when the state touts the fact that Oxford Schools received $6,958 per student in funding in 2004-05, that figure is actually a combination of state money and non-homestead tax dollars.
When the full 18 mills is not levied or collected by the district, the difference is not made up by an increase in state funds, so that money is ‘lost,? Franey said.
That loss is too much for Oxford to continue absorbing, according to school officials.
To balance the 2005-06 budget, school officials have proposed two plans ? one if the millage passes and one if it fails.
If it passes, the district will make $592,562 in cuts. If it fails, the cuts will total $1,292,562
Proposed cuts include reductions in supplies, administration, paraprofessionals, reading teachers, school clubs and extracurricular activities, varsity and junior varsity boys and girls golf and freshman sports.
The difference between the two reduction plans is the approximately $700,000 that could be generated by the non-homestead millage increase if approved by voters May 3.