Understanding the Numbers Behind the Non-Homestead Millage Proposal

Over the past several days, I’ve been asking questions about the November operating millage proposal because I wanted to better understand what the numbers mean in practical terms—both for Rockford Public Schools and for the non-homestead taxpayers who pay this millage.

I contacted Dr. Steve Matthews with my questions, and he worked with the district’s business office to provide historical millage figures and a forward-looking estimate. The information he provided helped me better understand the reasons for the district’s request for additional Headlee override authorization and what that authorization could mean in actual dollars.

Important: This 18-mill school operating levy does not apply to principal/primary residences that qualify for Michigan’s Principal Residence Exemption (PRE). It applies to non-homestead property, such as many businesses, commercial and industrial properties, second homes, and rental properties.

A note about the numbers: The historical millage figures and the district’s approximately 1.2-mill estimate discussed below were provided to me by Dr. Matthews. The dollar examples and calculations are my own illustrative math and have not been provided or verified by Rockford Public Schools.

What does the additional 3-mill authorization mean?

Rockford Public Schools seeks to maintain an 18-mill operating levy on non-homestead property. The additional 3 mills being requested would not be added on top of 18 mills.

The ballot language states that the additional authorization is available only to restore millage lost through required Headlee reductions and will be levied only to the extent necessary to restore that reduction. The total operating millage cannot exceed 18 mills in any year.

The 3 mills are also not a cumulative four-year pool that gets “used up.” The authorization applies during 2027–2030. The amount needed to restore Headlee reductions can vary, while the total levy remains capped at 18 mills.

There is a difference between how much authority voters provide and how much of that authority ultimately has to be used.

What do the historical numbers show?

Dr. Matthews provided the following historical figures:

Tax Year	Underlying Rate	Override Used	Total Levy
2022	15.7941	0.8051	16.5992
2023	16.5992	1.4008	18.0000
2024	16.3186	1.6814	18.0000
2025	15.9612	2.0388	18.0000
2026	15.6260	2.3740	18.0000

Dr. Matthews explained that the district levied 16.5992 mills in 2022 because it had not prepared for the rollback that occurred. Voters subsequently approved additional Headlee override authorization.

The trend since then is clear: the amount of override used to maintain the full 18 mills increased from 1.4008 mills in 2023 to 2.374 mills in 2026.

What does the district project going forward?

Future Headlee reductions cannot be known with certainty because they depend on taxable values and other factors.

Based on an assumed 4% increase in taxable values, Dr. Matthews estimates the district would use approximately 1.2 mills of the Headlee override to maintain the full 18-mill levy over the four-year period. He estimated approximately a .35-mill reduction per year in the original 18-mill non-homestead authorization under that assumption.

The approximately 1.2-mill figure is therefore a projection tied to the district’s 4% taxable-value-growth assumption—not a guarantee. Actual Headlee reductions, and the amount of override authority ultimately needed, could be greater or less than that projection.

The proposal authorizes up to 3 additional mills so capacity is available if future Headlee reductions are greater than projected. That does not mean all 3 mills will automatically be needed or levied.

Example on a Property With a Potential $300,000 Taxable Value

To make the numbers easier to understand, consider a hypothetical rental property with a taxable value of $300,000. This is simply an illustration.

Again, this example pertains to a hypothetical non-homestead/rental property—not a principal residence with a Principal Residence Exemption.

On a $300,000 taxable value, 1 mill equals $300 per year. Using my own math, the potential differences would look like this:

Illustrative Scenario	Millage Difference	Annual Difference	Monthly Equivalent
Approx. annual reduction under district’s 4% assumption	0.35 mill	$105/year	$8.75/month
District’s projected additional override need under 4% assumption	Approx. 1.2 mills	$360/year difference at 1.2 mills	$30/month equivalent
Illustrative maximum: if the full 3 mills of additional authorization were needed to restore Headlee reductions	3.0 mills	$900/year difference at 3 mills	$75/month eqivalent

The 3-mill example is an illustrative maximum based on the amount of additional authorization being requested. It is not the district’s projection. Under the 4% taxable-value-growth assumption provided by Dr. Matthews, the district estimates approximately 1.2 mills of the Headlee override would be used to maintain 18 mills over the four-year period.

The ballot limits the authorization to restoring Headlee reductions and caps the total operating levy at 18 mills in any year.

What could this mean for rental-property owners and renters?

For rental properties, both residential and commercial, the property owner is responsible for paying the property tax directly.

However, property taxes are part of the cost of owning and operating a rental property. An owner could choose to account for higher property-tax costs when setting or adjusting rent, subject to the terms of the lease and applicable law.

This means renters could experience an indirect financial impact, although there is no way to know whether—or to what extent—a particular property owner would pass that cost along to tenants.

For perspective, using the hypothetical $300,000 taxable-value example above, the difference is equivalent to approximately $30 per month under the district’s projected 1.2-mill scenario based on the 4% taxable-value-growth assumption, or $75 per month if the full 3 mills of additional authorization were ultimately needed in a given year.

Those monthly figures are simply another way of expressing the annual property-tax differences shown in the table. They should not be interpreted as a prediction that rents would increase by those amounts.

What is the practical tradeoff?

If Headlee reduces the millage and sufficient authorization is not available to restore it, affected non-homestead taxpayers would pay a lower school operating rate, while the district would receive less operating revenue.

If sufficient authorization is available, the district can restore the levy up to the full 18 mills, preserving that operating revenue while affected non-homestead taxpayers continue paying the full 18-mill rate.

So the comparison is not 18 mills versus 21 mills.

It is 18 mills versus whatever lower rate could otherwise be levied after Headlee reductions.

Those are two sides of the same financial equation.

Why I wanted to understand the numbers

My question was not whether the 18-mill non-homestead operating levy plays a role in school funding. I wanted to understand something more specific:

What is the practical difference between approving and not approving the additional Headlee override authorization?

The historical figures show that the district has needed progressively more override authority to maintain 18 mills.

The district’s forward-looking estimate adds important context: under an assumed 4% increase in taxable values, approximately 1.2 mills of additional override authority may be needed during the four-year authorization period.

At the same time, voters are being asked to authorize up to 3 mills, providing additional capacity if future Headlee reductions are greater than currently projected. Regardless, the ballot language limits how that authority can be used and caps the total operating levy at 18 mills in any year.

I appreciate Dr. Matthews taking the time to answer my follow-up questions and working with the district’s business office to provide additional information. The information I received helped me better understand a complicated proposal, and I think these details are important for voters to have as well.

The question I believe every voter should ultimately be able to answer is: What are we being asked to authorize, why is it needed, and what could the real-world impact be?

My goal in asking these questions and sharing what I learned is to make this proposal easier to understand so voters have the information they need to answer that question—and make their own informed decision.

Final note: The historical figures and district projection came from Dr. Matthews. The hypothetical property examples and dollar calculations are my own illustrative math. I may not have every calculation or interpretation exactly right, and I welcome corrections supported by verified information.