This November Ingham County voters will be asked to consider something called a “separate tax limitation” for the County, general law townships and the Intermediate School District. Just what does this “separate tax limitation” mean? If approved, it means millage rates for the County, general law townships and Intermediate School District will be reset to rates originally approved in the 1970’s.
Voters approved the Headlee Amendment to the Michigan constitution in 1978 to curb overall growth of taxable property value through an automatic millage reduction known as the “Headlee Rollback.” Automatic rollbacks over the years have reduced Ingham County’s millage rate from 6.8 mils to 6.4206 mils creating a revenue reduction of roughly $2.7 million in 2018.
Ingham County has slowly been overcome by budget challenges thanks in part to the Headlee Rollback. Headlee might have sounded like a good idea at the time, but who in 1978 could have imagined declining property values like those experienced during the Great Recession?
County Commissioners have already stretched fiscal reserves to their limit. The 2018 budget proposal calls for elimination of 31 jobs bringing the overall workforce reduction to almost 10% since 2009. Traditional retirement programs were replaced in 2013 in favor of a more economically-stable hybrid pension plan. Restructured employee health insurance benefits resulted in savings of more than $2 million since 2015.
Despite these examples of diligent budget stewardship over the years, events beyond the control of local officials have reduced the County’s ability to provide financial stability. Inflation has outpaced property tax revenue increases by 30.9% since 2007. Cuts in State funding continue. Changes in pension funding imposed by Municipal Employees Retirement System will double pension costs by 2021. And yes, Headlee Rollbacks have also had a measurable impact on County revenue.
Financial experts have recognized the County’s long-standing history of fiscal accountability. In August 2017 Standard and Poor’s Global Ratings reaffirmed Ingham County’s bond rating of AA+, adding their opinion that the County’s management and institutional framework are “strong”. This high bond rating benefits taxpayers by assuring the lowest interest rates possible on public building projects.
County officials have been very transparent in their near-constant acknowledgment that approval of the Headlee Override proposal would indeed result in a tax increase. That forthright disclosure is important because State law requires the County to use this complicated ballot language. Voter approval of the separate tax limitation proposal will reset the County’s general operating millage back to its original level, resulting in a tax increase of $18.97 per year on homes with a taxable value of $50,000. These additional dollars will be applied directly to public services already in place like health clinics, police and parks that might otherwise be in jeopardy.
Despite the challenges created by this 40-year-old law, its authors wisely preserved our democratic process by allowing voters to decide what to prioritize. Let us know what your priorities are with your vote on November 7. Thank you.