FYI: The Headlee Amendment override explained

October 25, 2023

FYI: The Headlee Amendment override explained

FYI is a series that discusses how things work in our lives here in Mason County. Click here to see past articles. 

By Rob Alway, Editor-in-Chief

On Nov. 7 voters in the Ludington Area School District are being asked to make a decision on an operating millage bond renewal of 18 mills. The 18 mills only impacts non-homestead properties.  A non-homestead property is property you own but do not live there. This may be a second home, piece of land or a commercial building. A homestead property is your main residence.

Basically, if you only own one home and no other property, you are not impacted by this vote. If you own a second home or additional property, you are already paying the 18 mills.

“Basically, voters who vote yes on the Nov. 7 ballot are approving to keep the 18 mills rate for the school’s operational millage,” said LASD Superintendent Kyle Corlett. “This is funding that the state assumes all schools will collect in order to receive the basic funding to operate. It is only on non-homestead properties such as businesses and second homes.”

Under an amendment to the Michigan Constitution called “Proposal A,” passed by the voters in 1994, Michigan public school districts are required to levy 18 mills on non-homestead properties in order to receive the full amount of funding allocated by the state, and this 18-mill levy must be renewed by the voters approximately every 10 years.  However, because of a unique feature in Michigan law known as the “Headlee Amendment,” the total amount of revenue raised in any given year from this 18-mill levy, as adjusted for inflation, cannot exceed collected in the first year of the levy, except in cases of new construction.  Thus, when property values rise faster than expected, leading to an increase in the amount of revenue that would be generated, the number of mills must be “rolled back.” Over time, this results in the district’s loss of the authority to levy the full 18 mills.  But the voters can overcome this and restore the district’s authority to levy the full 18 mills through something generally known as a “Headlee override” which will be explained in this article.

The school district is required to operate with the 18 mills in order to receive allocated funds from the state, which are paid for through sales taxes, use taxes and cigarette taxes.

This election should not be confused with the 2019 election when voters in the LASD approved up to 2.32 mills to fund the recent building and infrastructure projects or the 2022 election when they approved the renewal of .25 mill for 10 years for a building and site sinking fund, used for building maintenance.

The 18 mills, along with a per-student allocation from the state, pay for operational costs, which pay for staff salaries, utilities, and any other costs associated with running the school district. Funds from the other millages pay for debt. One cannot be used for the other. 

Corlett said voters often get confused by the Headlee because the ballot language mentions 20 mills but Headlee clearly states that schools cannot levee more than 18 mills.

For more information on the Headlee Amendment and school funding, check out an online series published by Michigan State University here.

– Special thanks to Nick Krieger who contributed to this article.

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