Beginning in 2015, Oxford and Addison property owners will have to pay 100 percent of the Oxford Schools? property taxes on their summer bills to help the district deal with its cash flow issues.
‘It’s not an increase in the amount of what they’re going to pay,? explained Fred Shuback, the school district’s controller and interim assistant superintendent of business and finance. ‘It’s just (a change in) when they’re going to pay.?
Property owners currently pay 50 percent of their local school taxes on the July tax bill and the other half on their December tax bill.
Local school taxes include the 7 mills that all property owners pay to help retire the school district’s bond debt.
One mill is equal to $1 for every $1,000 of a property’s taxable value. In round numbers, a home with a taxable value of $100,000 pays $700 annually to help retire the school district’s bond debt.
Local school taxes also include the 17.9946-mill non-homestead tax, which will be up for renewal in 2016 and is levied against industrial/commercial properties, apartment buildings, rental homes, vacation property and some vacant land.
Non-homestead taxes are not levied against primary (or principal) residences.
Right now, property owners pay 3.5 mills for the bond debt and 8.9973 mills for non-homestead tax on their July bill. They then pay those same amounts again on their December bill.
The reason the district is changing things so it can collect 100 percent of the taxes in July is to deal with the cash flow issue it has in September.
‘We get state aid October through August, but because it’s not spread evenly, we get cash flow issues (in September) and that’s why we had to do our borrowing,? explained Shuback.
The district currently borrows $4 million in order to have enough cash on hand to pay its bills.
‘This (tax collection change) won’t alleviate the need right now for total borrowing,? Shuback said. ‘But it would help to the tune of approximately $1.9 million.?
Shuback noted the Lake Orion school district also levies 100 percent of their millages in July, which includes some property owners in Oxford and Addison townships.
However, property owners in Brandon Township currently pay 100 percent of Oxford’s millages in December.
That will change in 2015 as well as they will begin paying 50 percent in July and 50 percent in December.
The reason for switching Brandon’s collection schedule, noted Shuback, is because Brandon Community Schools already uses the 50/50 formula.
For Oxford Township, which includes the Village of Oxford, the total taxable value on all properties paying the 7 mills for the bond dent is $583.6 million The taxable value of non-homestead properties totals $166.5 million.
In Addison Township, which includes Leonard, the total taxable value on all properties paying the 7-mill bond tax is $193.2 million. The taxable value of non-homestead properties totals $36.7 million.
Using the example of a $700 school tax bill for the owner of a home with a taxable value of $100,000, Shuback explained how much a homeowner would need to save to prepare for the 100 percent summer collection.
‘If the taxpayer plans for this immediately, and starts putting aside an additional amount starting January 1, 2014, it will require him or her to escrow an additional $19.45 per month for 18 months, or a total of $77.78 ($58.33 plus $19.45 per month until July 2015),? he said. ‘If the taxpayer starts putting aside an additional amount starting in July 2014, it will require him or her to escrow an additional $29.17 per month for 12 months, or a total of $87.50 ($58.33 + $29.17) per month until July 2015.?
In either case, Shuback said once July 2015 comes around, the amount to escrow would revert to the original $58.33 per month assuming there is no change in taxable value.
‘As a matter of planning, if you have a year or year-and-a-half to do it, we’re suspecting that people will be able to budget appropriate(ly) for it,? he said.