Businesses Face Millage Issues

May 31, 2002
| By Katy Rent |
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GRAND RAPIDS — On Monday, Grand Rapids voters will vote on a school millage for Grand Rapids Public Schools. The millage, which will affect business owners in a different way than homeowners, has caused some confusion in the business community and Sue Krieger, director of communications for GRPS wanted to clear it up for every voter.

Bottom line: this is a renewal, not an increase.

The millage question asks non-homestead property owners, those who pay property taxes for business, industry, rental property and second homes to renew the same amount they have paid since 1996.

In 1996, with the adoption of proposal A, the school district had to roll back its operating mills. A mill equates to $1 on every $1,000 in property taxes. Districts across the state were forced to go back to the limit set by the state of 18 mills on non-homestead property taxes.

“Businesses I think are not used to renewals, they always think it is something more but this really is a renewal,” said Krieger. “Because of the Headlee reduction, which allowed for inflation, business owners are only paying 17.956 mills currently out of the 18 mills people approved in 1996, which translates only to an increase of 20 cents on $1,000, something that probably will not even be noticed.”

In effect it is a renewal of what people agreed to in 1996 and is only bringing it up to what they agreed to six years ago. Krieger added the importance of the passing of the millage because of the repercussions which could take effect should it not pass.

The problem is the state assumes each district is receiving its 18 mills whether it is receiving it or not. That can become a problem because in particular GRPS is funded on per pupil foundation grants and in Grand Rapids that is around $6,700 per student. However, the state doesn’t simply send a check for $6,700, it first subtracts the amount of property taxes the district should receive based on the 18 mills. And the state doesn’t make up the difference and big changes could be in the wings if this millage doesn’t pass.

In the community, 18 mills brings in about $25 million, and if the millage doesn’t pass the district will loose $25 million, translating to a loss of possibly 300 teachers or school closing in April.

“This is very confusing to people and that is not what we want,” Krieger said. “The things is that people tend to vote no when they are unsure of what we are talking about so we want to make sure they are clear and that it isn’t going to cost them more than what they have been paying since 1996 and it is important to differentiate that this is not an increase but a renewal.”

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