In the upcoming November 4 election, schools are asking voters to approve operating millages in over a dozen communities — from Wayne County to East Jordan.
Like sinking funds and bonds, operating millages rely on local property taxes.
These are the most common and flexible type of school funding request voters will see on ballots in most election cycles.
Money from this millage goes to the district’s general budget to pay for things like teacher salaries, utilities, and other operational expenses.
The majority of homeowners don’t have to pay this tax, because most districts can only apply it to businesses and secondary homes, like vacation homes, rental units and AirBnBs.
Questions and answers to help you decide which bubble to fill in for operating millage requests on your ballot:
Click on a question to go directly to the answer.
How much do school budgets rely on operating millages?
What happens if an operating millage proposal fails?
How do districts decide what rate to set for an operating millage?
Can some districts ask for an operating millage that does levy a tax on primary residences?
How much do school budgets rely on operating millages?
Because these millages primarily apply to non-primary residences, the amount of money a district gets can vary greatly based on the community surrounding it. Usually, it is not a majority of their budgets.
Officials with Grandville Public Schools in Ottawa and Kent Counties, for example, say the millage the district is trying to get renewed in this November election would bring in just over $18 million in 2027. That’s about 20% of the district's operating budget for that year.
But about half of the per-pupil funding for White Pigeon Community Schools comes from its millage, which passed in May. The St. Joseph County district says that’s partly because the area its schools serve has a lot of non-homestead properties like second homes and farmland.
What happens if an operating millage proposal fails?
The district gets less money per student.
State lawmakers set school funding at $10,050 per student in the new budget. For most districts, a big chunk of that funding comes from the state’s collection of a 6-mill rate tax on all property.
But the state holds back a portion of these funds based on the expectation that districts will propose and pass their own operating millages.
So if a district’s operating millage is expected to bring in about $1,000 per student, the state would only give that district about $9,000 instead of the full per pupil amount. If the district then fails to pass its millage, the state doesn’t add an extra thousand dollars to its contribution.
For districts like Grandville Public Schools that get a larger portion of per pupil funding from their millage, the funding cut would be even more drastic.
When millages fail, districts just have to deal with the loss. This can potentially lead to layoffs, building closures, and other cuts to educational services. Districts can try to pass the millage again to prevent these losses.
How do districts decide what rate to set for an operating millage?
They kind of don’t get to decide that.
As explained above, schools must pass their operating millages to get full access to per-pupil funding at the rate set by the state.
The state expects that each district will pass an operating millage set at $18 per $1,000 in taxable value. So the state only gives schools enough funding to make up the difference between that millage and the maximum per-pupil funding set in state law.
Again, for most districts, the millage only applies to secondary residences and commercial properties. So, most homeowners never have to pay this tax.
A 2019 report from Michigan State University called these operating millages “effectively a state rather than local tax.”
But why do some districts set their operating millage proposals above the 18 mill rate?
A 1978 state law, the Headlee Amendment, reduces millage rates after voters approve them based on property values. As the values go up, the millage rate automatically goes down to avoid making property owners pay more.
But if the values start going down again, the millage does not automatically go back up. And the state does not increase its contribution to per-pupil funding based on the mill rate reduction. Schools can be left with no way to close the gap.
So districts often try to give themselves a cushion that accounts for the Headlee reduction until the millage can be renewed again. But that doesn’t mean property owners pay more, as state law caps the amount schools can get at 18 mills — even if voters approve more.
For example, East Jordan Public Schools in Antrim and Charlevoix Counties is asking voters to renew its operating millage through 2034. On the same ballot it has a second request to increase the tax up to 21.31 mills.
But, the district acknowledges that it won't get $21.31 per $1,000 dollars in taxable value if both proposals pass. The most it would get is just $18. The second request is just a “safety net” in case the rate drops as property values increase.
Can some districts ask for an operating millage that does tax primary residences?
Yes. About 40 districts are allowed to levy a tax on those residences based on the fact that they were wealthier than most other districts in 1994. That’s the year the law that governs operating millages today was passed.
As of 2023, only 21 of those districts actually use their ability to tax those primary residences.
None of the districts with operating millages on the ballot in this November election are levying a homestead tax.
