District chooses to hold off on state-mandated tax levy increase
July 1, 2013
HARPER WOODS — When the state stepped in to say that the Harper Woods School District would have to pass along a tax levy increase to raise revenue back to prior years’ amounts to pay down the district’s bond issue, the district said not now.
The Harper Woods School Board voted unanimously June 18 to keep the debt retirement millage rate at 7.4 mills, but realized that it means the state will impose the change to up to 13 mills next year.
“It’s very important that the community understand that this is not a process that the Board of Education has initiated,” Superintendent Todd Biederwolf said.
The district could have voted to go ahead and increase the mills to 13 for this fiscal year, but the board just didn’t think it was fair to its residents not to give them a heads-up that this was coming.
“We got this two weeks ago,” Board Vice President David Kien said, adding that he’s not comfortable asking the residents to pay an additional 5.6 mills this year with zero notice, especially with the city passing along its 9.5-mill special assessment for the second year in a row. “I’m not comfortable doing this. I don’t want to blindside people with this.
“It doesn’t sit well with me,” he added.
The bond issue was passed several years ago to fund the construction of the secondary building and some improvements at the elementary schools.
At that time, a mill brought in more tax revenue than it does today, due to decreased property values. The state wants to bring in the previous amounts so the bond is paid off in the time that was initially projected.
Residents are paying less now than they had anticipated when they approved the bond issue. This would just bring them back to what they anticipated they would pay to repay the bond, Biederwolf said.
Because many cities and schools across the state have dealt with falling property values, this isn’t a situation unique to Harper Woods.
Biederwolf said it is one of the most difficult issues the board has faced in his time with the district.
Board President Brian Selburn said that when voters approved it, they were told it was a set millage rate. While property values had historically always risen, it is a risk that the lenders take that it might take longer to get repaid if property values dropped.
“To turn around now, a little less than 10 years later … I think is absolutely wrong,” Selburn said. “This is a loss that they should have taken into (consideration) when they bought those bonds.”
Because the board also approved the budget that night, they had been presented with two pages in that budget: one with the millage rate increase shown for debt retirement and one without it.
“You can take (page) 148 and rip it out of your packet, shred it and send it to your legislator,” Selburn said.
Next year, it appears the district won’t have a choice, however.
“The state will force the city to do it,” district Business Manager James Dennis said.
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