Daniel Prince
New members learn about mills, differences in operating millage and debt service millage
The three new school board members got a crash course in the budgeting process Monday night at a special workshop meeting of the Union County Board of School Trustees. Former Finance Director Kelly Richardson led the workshop and explained some of the terminology involved.
One major term that is used many times is the mill, which taxes are based on. A mill is defined as 1/1000th of a dollar. The school district has operating millage of 127.9 and debt service millage of 48. She noted that by state law, owner-occupied property is not subject to be taxed for the school district’s general fund budget, though it does get taxed for debt service. The bulk of the local tax revenue for the general fund budget comes through other types of property, such as cars, boats, and other personal property other than a person’s primary residence. She noted that debt service millage is used to pay for capital projects throughout the district. This year, the school board is allowed to raise the millage by up to 10.2, and they can also go back and claim 6 mills from the previous year, if they so choose. A single mill increase would add $6 to the tax bill of someone with $100,000 worth of property. Again, this does not apply to the primary residence. A 16.2 mill increase would add $97.20 to the tax bill on $100,000 worth of property. A single mill is estimated to bring in $42,202 in revenue to the district, so raising taxes to the maximum would bring in just under $684,000.
Board Chair Manning Jeter urged the board members to consider raising the millage this year and to get on a set schedule of small millage increases in order to keep some of the programs and positions that ESSER money is currently funding. Richardson said that would also help the district keep up with inflation. Tax rates were last raised by 3 mills for the 2019-2020 budget year. Richardson again noted that new homes coming to Union would not increase the district’s revenue—it is their vehicles and other property that would increase it.
Richardson noted that currently, around $1 million is available each year for capital projects from debt service revenues after the payment for the bonds for Sims and Jonesville are paid. She noted those schools will be paid off in 2032, which would free up an addition $2.7 million to use for capital projects. The bulk of the rest of the session was given over to the district’s five-year capital projects plan, which we will explore in future newscasts.