3-series bond.
No Tax Rate Increase.

We are currently in the rare position to secure funding for much needed facility improvements through the sale of bonds at no tax rate increase. By renewing the existing rate to fund a 3-series bond, current tax rates will remain the same and $125 million dollars will be secured to invest into our schools. These bond dollars are restricted to capital improvements, such as technology, buses, and facility improvements.

The bond proposal that will be on the ballot in March 2020 is what is commonly referred to as a 3- series proposal. A traditional bond proposal allows a district to sell bonds one time and receive funds. With a 3-series bond, Ferndale Schools will have the ability to gain public authorization to sell bonds at three different times in the near future. This allows the district to create a decade long facility plan.

If this proposal is passed by voters on March 10, 2020, bonds would be sold according to the schedule below, yielding the amounts listed:

  • 2020: $53M
  • 2023: $35.5M
  • 2026: $36M

Once again, a “yes” vote on the bond proposal would result in no increase, only a continuation of the current millage rate.

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understanding
the non-homestead
millage

Ferndale Schools currently collects 18 mills from our Non-Homestead Millage–taxes collected on non-primary residences. This is the maximum allowed by law. However, in the event property taxes rise, then that millage rate can be reduced due to the Headlee Amendment. The only way for Ferndale Schools and other state entities to protect against a decline in the millage rate is to pass a Headlee Override. This increases the millage rate above 18 mills; however, by law, more than 18 mills is never actually collected. This increase above 18 mills only serves as a buffer of mills in the event of a Headlee rollback to ensure that the portion of our budget provided by the state of Michigan continues to be fully funded.

This year, Ferndale Schools collected more than 10% of our total budget from the Non-Homestead Millage (about $4.6 million.) If this ballot initiative does not pass it would begin to lower that portion of our budget exponentially over time.

WHAT IS A NON-HOMESTEAD MILLAGE?

This is a tax on Non-Homestead property in our community. Non-homestead property includes industrial, commercial, and some agricultural property as well as “second homes.” A non-homestead millage is a tax on property other than a family’s primary residence –a home lived in for more than 6 months of the year. If your family home is your primary residence, then this tax will not impact you.

HAS FERNDALE SCHOOLS NON-HOMESTEAD MILLAGE RATE BEEN “ROLLED BACK” RECENTLY?

Yes. Since the Non-Homestead Millage Renewal was passed in 2015, our millage rate has been rolled back every year.

In 2015, our community passed a Non-Homestead Millage Renewal. At that time the voters approved 20 mills, even though the maximum tax rate collected would be 18 mills. These additional 2 mills provided for a millage buffer in the event of a Headlee roll back.

Following subsequent annual roll backs ever since the passing of the 2015 Renewal, our current millage is at 18.3851. This is more than 1.5 mills of roll back over the past four years. If this roll back trend continues, we anticipate the Non-Homestead Millage Rate would drop below 18 mills in 2021.

This year, the Non-Homestead Millage accounted for more than 10% of our total budget (about $4.6 million.) If this ballot initiative does not pass, it would begin to lower that portion of our budget exponentially over time.

WHAT IS A HEADLEE OVERRIDE EXACTLY?

To learn the full story on the Headlee Amendment, we recommend reading this full explanation from Michigan State University. Here is a portion of that article:

In 1978, Michigan voters approved an amendment to the Michigan Constitution known as the Headlee Amendment. This amendment included a number of provisions related to state and local taxes. Among them was a statute that limited the revenue a state entity can collect to the amount the millage originally was supposed to generate (with factor for inflation).

The property tax revenue limitation requires that if the assessed value of a local tax unit’s total taxable property increases by more than the inflation rate, the maximum property tax millage must be reduced so that the local unit’s total taxable property yields the same gross revenue, adjusted for inflation.

In other words, to maintain the full 18 mill tax rate and ensure state funding stays consistent, school districts must levy a higher millage to create a buffer of millage only in the event of a roll back. There is no additional tax collected, and there is no cash buffer–only a buffer of millage points. This is done through a Headlee Override ballot initiative.

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