Non-Homestead Operating Millage Renewal February 2024

On February 27, 2024, voters will be presented with an important school ballot question. We want you to be fully informed as this ballot proposal will have operational implications for our district. The ballot question pertains to the 18 Mill Non-Homestead Operating Millage that is required to be levied by every school district in Michigan to receive the full per-pupil foundation allowance. This is part of the basic school funding formula enacted under Proposal A of 1994.

The Non-Homestead Operating Millage is set to expire in December 2024, and voters will be asked whether to renew it for an additional ten years. This tax is levied on businesses, industrial, agricultural, and rental properties. It is not a tax on a homeowner’s primary residence. The operating millage levy (or 18 mill levy) is collected as a portion of our “per pupil foundation allowance” and amounts to $464,000 annually for Pewamo Westphalia Community Schools. 

This operating millage is a renewal of millage that will expire with the 2024 tax levy. A successful renewal would mean continuing the tax currently levied for applicable properties. An unsuccessful renewal of this tax would mean the loss of $$464,000 in operational funding, which would significantly impact the programs and services currently offered to our students. For further details on the Operating Millage Renewal, see the “Frequently Asked Questions” below.

Thank you. We hope that you have the opportunity to vote on February 27. 

Because of the operating millage’s significance to our district, we would like to provide as much helpful information as possible on this topic. If you still have questions after reviewing this document, please contact Superintendent Jennifer Goodman at jennifer.goodman@pwschools.org. 

Q: What is a school district’s operating millage? 
A: As a result of Proposal A, the Statewide school finance reform that voters passed in 1994, Michigan school districts must levy an 18 mill local property tax on non-homestead property for a specific time period to receive its full per-pupil funding. Michigan school districts must seek voter authorization for the 18 mill levy before its expiration. The operating millage provides critical funds to support the school's day-to-day operations, including but not limited to staffing costs, instructional programs, instructional materials, transportation, and maintenance. This money cannot be replaced by other sources. 

Q: Is this a new tax? 
A: No. This proposal is a reauthorization of the 20.8113 mills ($20.8113 on each $1,000 of taxable valuation) mill non-homestead property tax last approved by voters in March 2020. The term requested with the reauthorization is for ten years. 

Q: Will my home property taxes go up if this passes? 
A: No. Your home property tax rate will remain the same. For homeowners and businesses alike, nothing will change: homeowners don’t pay this tax, and businesses will continue to pay a tax they’ve been paying since the passage of Proposal A in 1994. A person’s principal residence and qualified properties are exempted by law. 

Q: Will my home property taxes go down if this is defeated? 
A: No. Your home property tax rate will remain the same; the rate will drop only for commercial, industrial, and rental businesses. However, if the voters defeat the proposal, it would result in a loss of $464,000 in operating revenue and a reduction of educational programs offered by the school district. 

Q: What is a non-homestead property? 
A: A non-homestead property is any property that is NOT a primary residence. Examples of non-homestead properties include vacation homes and industrial, commercial, business, investment, and rental properties. 

Q: Do businesses and commercial entities pay this operating tax in other school districts? 
A: Yes. Regardless of which school district a business may be located within Michigan, for a school district to receive its full funding from the State of Michigan, it must levy the 18 mill operating tax.

Q: When does Pewamo Westphalia Community Schools' operating millage expire? 
A: Pewamo Westphalia Community Schools' operating millage was last authorized by voters in March 2020 for a period of 4 years. The levy will expire in December of 2024. 

Q: How much revenue does the operating millage generate for Pewamo Westphalia Community Schools? 
A: The operating millage generates approximately 464,000 dollars annually. 

Q: What is a Headlee Rollback? 
A: In 1978, Michigan voters approved the “Headlee” tax limitation amendment to the Michigan Constitution. It requires local government units (including school districts) to reduce their millage when annual growth on existing property values is greater than the inflation rate. 

Q: How can Pewamo Westphalia Community Schools avoid a Headlee Rollback? 
A: Districts cannot avoid a Headlee Rollback. However, to combat the effects of a Headlee Rollback, school districts can seek voter authorization for more than the 18 mill levy and/or a shorter authorization period. Pewamo Westphalia Community Schools is seeking approval for 20.8113 mills ($20.8113 on each $1,000 of taxable valuation) over a ten-year period. Electing 20.8113 mills allows the additional mill to act as insurance to make up any difference over the ten years to keep it at 18 or as close as possible. (Note: This does not allow a school district to levy more than 18 mills at any time.) 

Q: What will the actual ballot language say? 
A: PEWAMO-WESTPHALIA COMMUNITY SCHOOLS
    OPERATING MILLAGE RENEWAL PROPOSAL

This proposal will allow the school district to continue 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. The remaining 2.8113 mills are only available to be levied to restore millage lost as a result of the reduction required by the “Headlee” amendment to the Michigan Constitution of 1963 and will only be levied to the extent necessary to restore that reduction.

Shall the currently authorized millage rate limitation on the amount of taxes which may be assessed against all property, except principal residence and other property exempted by law, in Pewamo-Westphalia Community Schools, Clinton and Ionia Counties, Michigan, be renewed by 20.8113 mills ($20.8113 on each $1,000 of taxable valuation) for a period of 10 years, 2025 to 2034, inclusive, to provide funds for operating purposes; the estimate of the revenue the school district will collect if the millage is approved and 18 mills are levied in 2025 is approximately $464,000 (this is a renewal of millage that will expire with the 2024 tax levy)?

Q: What is a mill? 
A: A mill is $1.00 for every $1,000 of taxable valuation on property. Example: If a commercial property has a $100,000 taxable value, then the 18 mill operating millage would cost $1,800 on that property. 

Q: Could we levy less than 18 mills and attract businesses with lower taxes? A: No. All communities are required to levy 18 mills. The only reason districts were temporarily lower than 18 mills was due to the Headlee Rollback. 

Q: Wasn’t there a bond passed in 2023? 
A: The operating millage is unrelated to the bond passed in 2023 for construction. That bond money can only be used for building improvements and construction and cannot be used for operating expenses. 

Q: Who is eligible to vote on this operating millage? 
A: Any registered voter living within Pewamo Westphalia Community Schools’ District boundaries. 

Q: Where do I vote? 
A: Voting occurs at the exact location of national and state elections. 

Q: When will the election take place? 
A: The election is Tuesday, Feb 27, 2024. Polls are open from 7 a.m. until 8 p.m.