Excellence In Education Annual School Election Tuesday May 5th, 2009   Ballot Proposals At A Glance Excellence In Education

WHAT PROPOSALS ARE ON THE BALLOT? There are two Non-Homestead Operating Millage Proposals on the May 5th Ballot. The first proposal will ask voters for a RENEWAL of 16.3205 Mills of the original 18 Mills approved by the voters in 1999 and “rolled back” because of the Headlee Amendment.  The second proposal will ask voters to restore the 1.6795 Mills that were lost as a result of the Headlee Rollback. Election of 2 School Board Members

REASON FOR REQUEST The 18 Operating Mills approved by the voters in 1999 for Non-Homestead Property has Expired and has been reduced to 16.3205 Mills because of the Headlee Rollback. The Rollback occurred because of Proposal A’s impact on the Headlee Law when properties are sold and the assessed value is increased. This vote is requested to allow the District to collect the full 18 Mills, which voters approved in 1999 on Non-Homestead Property such as second homes, vacation properties, commercial and industrial properties. If this election is not successful, the District will lose $463,063 of funding for next school year.

WHAT IS THE IMPACT? NON-HOMESTEAD MILLAGE RENEWAL? The first proposal is a renewal of existing Millage. The second proposal is to restore 1.6795 mills lost as a result of the Headlee Rollback. The revenues generated from the two proposals is equal to $460 per pupil. If voters were not to renew this millage the District would lose approximately $463,633 in operating funds.

NON-HOMESTEAD OPERATING MILLAGE RENEWAL PROPOSAL This Non-Homestead Millage Proposal will allow the School District to continue to levy the statutory rate of mills on all Non-Homestead property, required for the School District to receive its revenue per pupil foundation allowance. This Non-Homestead Millage is to maintain the funding voters approved in 1999. There will be NO cost increase to homeowners or farmers. This Non-Homestead Proposal will maintain current programs and funding levels. This is local operating money and it stays in Brown City. This Non-Homestead Proposal will guarantee full per pupil operational dollars that the State authorizes under Proposal A. These two ballot proposals will have absolutely NO effect on homeowners or agricultural property (farmers).

School Funding History Proposal A March 1994 Constitutional Amendment. Simply stated: Proposal A requires 6 mills on homestead property and that businesses and second homes be designated as non-homestead property and taxed at 18 mills. The State School Aid Fund: State levies a uniform rate of six mills on all property. Locals district’s contribution: local districts levy 18 mills with voter approval on all non-homestead property.

Foundation Allowance Foundation Allowance: The amount of money a school district receives per-pupil The minimum State per-pupil Foundation Allowance for 2008-09 $7316 This represents the major portion (89%) of Brown City Community Schools revenue and is funded from 2 sources Local Revenue – 18 mills collected on non-homestead property State Revenue

Revenue by Source 2007-08

Foundation Allowance Funding Calculation Student Count 1,043 students x 7,316 per student $7,650,588 16.3205 Mills Collected on Non-Homestead $420,575 (If 18 Mills were collected on Non-Homestead) $463,063

BLENDED STUDENT COUNT The Foundation grant money, which is projected by the State to be $7,316.00/student for the 2008-09 school year, is based on a Blended Count of Students. The formula for the 2008-09 school year is: 25% x (K-12+Alt Ed 2007-08 Spring count) + 75% x (K-12+Alt Ed 2008-09 Fall count) =Blended student count The 2008-09 is an estimate.

Foundation Allowance Funding By law, to obtain the total Foundation Allowance, Brown City Schools must collect a local “non-homestead” millage for this portion of its budget. The State reduces its obligation to the districts by this amount and only pays the balance. Brown City Schools will lose $42,488 for the 2008-09 school year because it does not levy the full 18 mills.

Headlee Amendment The Headlee Amendment was established by a vote of the MI people in 1979 as a constitutional amendment to limit the increases in property tax assessment. If the value of all property taxed by a government unit exceeds the rate of inflation, millage rates are reduced so that the amount of taxes collected is no more than an inflationary increase.

Foundation Allowance Comparison

Brown City Community Schools Headlee Override Vote Proposal Two Different Graphic

Two Purposes of Headlee If property values (taxable value) increase faster than the rate of inflation, then millage tax rates must be reduced. 2. If the legislature mandates programming that must be implemented, they must pay for it.

County Equalization Department Each year the County does an analysis of the increase in taxable value for each school district within that county. If the increase in the taxable value is greater then the rate of inflation, the school district must roll back the amount that is levied on the non-homestead properties. This “rollback” is called the ‘Headlee Rollback’.

Headlee Rollback Affect This rollback permanently reduces the 18 mills that is levied on non-homestead properties unless the voters approve a Headlee Override. Brown City Schools current levy rate has been reduced by 1.6795 mills. State Aid reduction to Brown City Schools is $42,488.

What is non-homestead property? Non-homestead property includes property within our school district that is not a primary resident or not used for agricultural purposes.

Who does non-homestead millage affect? The measure will affect businesses, second homes and non-qualified agricultural property. The Headlee override does not affect principal residents (primary homes that are owned by the dweller) covered under the Michigan Homestead Property Tax exemption.

Are you affected by the 18 mill non-homestead tax? Please answer yes or no to the following statements: Do you own commercial / industrial property in the Brown City School District? Do you own vacation property in the Brown City School District? Do you have agricultural property that is non-qualified? (not exempt for the 18 mills) Do you own rental properties or a second home in the Brown City School District? If you have answered no to all the above statements, the non-homestead property tax does not apply, and costs you nothing.

Sample Tax Bill EXEMPT Non-Homestead

Projected Sources of Revenue for Per Pupil Foundation Allowance $442.01 Local Non-Homestead Taxes (18 Mills Times Non-Homestead Taxable Value Divided by Student Count) $6873.99 From the State $7316.00 Non-Homestead properties include: apartment buildings, rental homes, vacation property, vacant land, commercial / industrial property

Actual Sources of Revenue for Per Pupil Foundation Allowance $399.84 Local Non-Homestead Taxes (16.3205 Mills Times Non-Homestead Taxable Value Divided by Student Count) $6873.99 From the State $7273.83 State assumes all Districts are levying 18 mills

2008-09 Loss of Revenue to Brown City Community Schools

Potential Long Term Impact of Failure to Override Headlee

HOW MUCH WILL IT COST? A successful vote will result in no cost increase to homeowners or qualified agricultural property (farmers). A small increase will only affect industrial, commercial, business & second homes.

2009-2010 Loss of Revenue to Brown City Community Schools If Ballot Proposals Are Not Successful Renewal of 16.4205 Mills ($420,575) Restore 1.6795 (Headlee Rollback) ($ 42,488) TOTAL ($463,063)