TCAPS Operating Millage Proposal
Headlee Rollback Prevention
Election: Tuesday, November 3, 2020
No levy increase, current tax rate (18 mills) since 1999
Non-homestead tax, does not apply to primary residences
Property tax on non-exempt residences
(ex: second homes/commercial properties)
Required for TCAPS to receive full revenue per pupil
Operating Millage Information
- By law, TCAPS cannot levy more than 18 mills
- This is the amount (18 mills) the district is required to levy in order to receive the state determined foundation allowance
- This tax does not apply to primary residences and other exempt property, it is only levied against properties considered “non-primary residence”, which are essentially businesses, industrial property, and second homes located in our school district
School District Funding
- Funding is based on a state determined “per-pupil” amount, for fiscal year 2020, that amount was $8,111.
- Local non-homestead taxes make up one portion of the per-pupil amount (fiscal year 2020 was 47%) and the state covers the difference.
- In order to receive the state determined per-pupil amount, the state requires the district to levy 18 mills on non-homestead property.
The Headlee Amendment, which was passed in 1978, requires the school district to reduce its millage when annual growth on existing property exceeds the Consumer Price Index (CPI) or 5%, whichever is less. Therefore, the millage rate gets “rolled back” so that the resulting growth in property tax revenue is no more than the rate of inflation.
Annually, the district must apply a Headlee rollback factor. The annual factor is then added to prior years to determine the cumulative Headlee rollback factor or the “millage reduction fraction”. The total “millage reduction factor” is then applied to the millage originally authorized by a vote of the district’s taxpayers. The actual mills available to be levied by the district is the result of the authorized millage rate times the total millage reduction factor.
TCAPS Authorization History
In 2014, voters approved a 10-year operating millage rate of 19.0961 as a renewal:
- The District’s 2018 authorized millage rate was 18.6970
- The District’s 2019 authorized millage rate was 18.5549
- The District’s 2020 authorized millage rate was 18.3025
Nov. 3 Ballot Language
The language on the November 3rd ballot will appear as follows:
TRAVERSE CITY AREA PUBLIC SCHOOLS
OPERATING MILLAGE PROPOSAL
This proposal will allow the school district to levy the statutory rate of not to exceed 18 mills on all property, except principal residence and other property exempted by law, required for the school district to receive its revenue per pupil foundation allowance.
Shall the limitation on the amount of taxes which may be assessed against all property, except principal residence and other property exempted by law, in Traverse City Area Public Schools, Grand Traverse, Leelanau and Benzie Counties, Michigan, be increased by 1 mill ($1.00 on each $1,000 of taxable valuation) for a period of 5 years, 2021 to 2025, inclusive, to provide funds for operating purposes; the estimate of the revenue the school district will collect if the millage is approved and levied in 2021 is approximately $38,065 (this millage is to restore millage lost as a result of the reduction required by the Michigan Constitution of 1963 and will be levied only to the extent necessary to restore that reduction)?