Clarkston school officials have a right to ask voters to approve millages, but those proposals should not include tax levies lasting a decade or plans to circumvent the state constitution.
The Clarkston Board of Education is currently discussing language for a millage proposal for the May 2 ballot and we have reservations about both parts.
The Original 18 Mills
Part of the request is to renew the 18-mill tax levy on non-homestead properties (commercial and industrial properties, rental properties, second homes, vacation homes) for the next 10 years.
By law, school districts can levy up to 18 mills on non-homestead properties to fund their operating budgets. That’s a maximum levy of 18 mills, no more.
Clarkston’s original non-homestead millage expired last year. Given this, asking voters to renew the 18-mill property tax is acceptable and within the bounds of the law.
However, we believe 10 years is too long for any millage. Keeping anything out of voters? hands for an entire decade diminishes the public’s capacity to hold officials accountable and responsible for their actions.
We would like to see the school board reduce that proposed 10 years to five years or less. How about four years? Why should a tax last longer than a school board member’s term in office?
An Additional 1.2491 Mills
The second topic Clarkston school officials are discussing is adding 1.2491 mills on non-homestead properties to the original 18 mills. This is the part that’s flat out wrong.
You see, if voters approve this one 10-year millage, the total non-homestead millage rate would start out at 19.2491 mills.
Even though the school district can only legally levy the maximum 18 mills, officials could use the other 1.2491 mills, which cannot be levied, to offset the impact of the Headlee Amendment, a state constitutional amendment enacted by voters in 1978.
The Headlee Amendment mandates local governments and school districts reduce their maximum voter-authorized millage rates whenever assessed property values rise faster than the rate of inflation. This is what’s commonly referred to as a ‘Headlee rollback.?
It’s important to note that governments and school districts do not lose tax revenue due to Headlee rollbacks because even though the millage rate is lower, it’s being applied to a higher property value, yielding the same gross revenue, plus an adjustment for inflation.
Even though Clarkston officials cannot legally levy anything above 18 mills on non-homestead properties, they could use the extra 1.2491 mills to provide a ‘buffer? or ‘cushion? to absorb and neutralize future Headlee rollbacks, thus allowing the district to levy the maximum 18 mills every year ? something they could never do otherwise because of Headlee.
Unfortunately, Headlee rollbacks apply to the total voter-authorized millage rate, not the actual amount levied. As a result, officials can pad a property tax with extra mills they have no intention of levying in order to offset Headlee rollbacks; and allow them to levy the tax rate they wish year after year with no reduction.
By asking voters to approve mills that cannot be legally levied (i.e. fake, make-believe, nonexistent mills) so as to avoid the impact of Headlee rollbacks, Clarkston school officials would be asking local voters to negate the Headlee Amendment approved by voters statewide.
Granted, other school districts in Michigan and Oakland County have done this, but it doesn’t make it right no matter what school officials and their fancy lawyers say.
In a May 8, 2002 interview with our sister newspaper The Oxford Leader, the late Richard Headlee, architect of the amendment bearing his name, told Editor C.J. Carnacchio asking voters to approve more than the maximum 18 mills ‘violates both the spirit and the letter of the law.?
‘They can’t do that. I would challenge it,? Headlee said. ‘In my view, it would be contrary to the law to ask voters for anything over the 18 (mills).?
‘If they’re entitled to 18 (mills), that’s all they should ask for,? said Headlee, explaining that by asking for more mills to use as a cushion to offset annual rollbacks, school officials are attempting to ‘prospectively neutralize? his amendment and ‘any tax savings for the property owners.?
‘The people would be foolish to do that,? Headlee said. ‘In essence, they’re asking voters to vote ‘no? on the Headlee Amendment. It’s subterfuge.?
We couldn’t have said it better Mr. Headlee.
The Real Problem
Finally, let us say, Clarkston school officials are right that they do lose money by not levying the full 18 mills every year, but it’s not because of the Headlee Amendment or because local tax revenues are diminishing. It’s because of the state government.
When the state allots its foundation grants to school districts, it assumes districts are levying the full 18 mills every year. The state bases how much per-pupil funding a district receives on the assumption that 18 mills are constantly being levied on non-homestead properties.
This foolish and false assumption on the state’s part leads to a funding gap between what’s actually collected in non-homestead property taxes and what the state assumes the district is receiving locally.
The Headlee Amendment annually rolls back all millages in growing communities like Clarkston. The only millage exempt is the 6-mill State Education Tax, which remains constant on all properties.
There’s no way school districts can legally levy 18 mills every year without resorting to the aforementioned circumventing of the Headlee Amendment.
Although this funding Catch-22 is primarily the state’s fault and should be corrected at that level, it doesn’t excuse local school districts who attempt to violate the spirit and letter of the Headlee Amendment.
Two wrongs don’t make a right.
Clarkston School should ask voters for the 18 mills they’re legally entitled to, but no more.