Bond proposals, tax renewals abound on Michigan, Ohio ballots

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Voters in Michigan and Ohio will decide hundreds of millions worth of bonds and taxes on the presidential primary ballot this month.

Michigan voters on March 10 will decide on over $600 million of school bonding proposals, which mostly will fund upgrades to facilities. In Ohio, voters have a number of bonding proposals and tax levy requests on the March 17 ballot.

Eric Lupher president of Citizens Research Council Michigan said that Michigan school districts may be seeking bond approval now because of several factors.

Michigan is one of 12 states that does not provide state funding specifically for school buildings and infrastructure.

“We do have many school bond proposals on the ballot next week,” said Eric Lupher president of the Citizens Research Council, a not-for-profit public affairs research organization in Michigan.

Lupher said that school districts may be seeking bond approval now because of several factors. “Certainly favorable interest rates play a part, but rates have been low for some time; school districts are developing ways to harden their schools to protect against active shooters and other violence" and perhaps most significantly "property values are returning to pre-Great Recession levels and school officials feel that the time is right to deal with deferred capital needs," he said.

Lupher said, however, that none of the bond proposals for capital improvements really stand out to him as significant in size.

Among the largest bonding proposals on the ballot is a $147 million bonding proposal from Pontiac School District located in Oakland County. The school district is hoping for a renewal of a school bond to update aging buildings. Voters also will decide on a building and site sinking fund renewal of 0.8 mills for up to five years for construction and repair work. The tax would raise an estimated $2.1 million in 2021.

The district seeks approval of the two questions, and the combined 2.8 mills as a millage decrease, since it will replace the current levy of 2.87 mills that expires with the summer 2020 tax bill. The new tax will begin in 2021. The owner of a home with a market value of $100,000 now paying $287 a year will see taxes drop slightly to $280 annually.

The district is one of several in Oakland County looking to fund capital improvements with bond funds.

Bloomfield Township will vote on a $195 million bond proposal for Birmingham Public Schools district. The bond proceeds would address facility needs and enhancements and is not expected to increase taxes for homeowners.

Flint Community Schools is taking a $30 million bonding proposal to voters on Tuesday. The proceeds would go directly toward eliminating the district's deficit. Flint is seeking a new tax that will be paid by all property owners, residential and business, while it continues to levy the 18-mill business tax to finance its per-pupil foundation grant.

Taxpayers won’t see an increase in taxes because the district is also looking to the authorization to levy a sinking fund millage from 4 mills currently to 1.18 mills, according to Citizen Research Council of Michigan blog.

The sinking fund dollars would fund new lighting in hallways, new roofs in remaining facilities and upgrades to building exteriors.

“Flint just happens to be the first district, after Detroit, to propose the new deficit borrowing and a plan to levy a new tax for debt repayment,” Citizen Research Council wrote in the blog.

The debt repayment bond is a fairly new option for districts facing deficit and debt issues. Under a 2016 law change, which eliminated deficit borrowing and taxing restrictions adopted under Proposal A, bonds called “school financing stability bonds” can now be placed on voters' ballots in Michigan school districts.

The law change came when Detroit Public Schools was facing massive debts and building deficits.

At the beginning of the school year, Flint Community Schools faced at least a $5 million deficit and $22 million in long-term operating debts. If passed, the bond would allow the district to pay off the debt in seven years instead of 18, according to the district.

The Detroit Institute of Arts is asking voters in Wayne, Oakland and Macomb Counties to renew a millage that is set to expire in two years.

The DIA stated in a release that the millage renewal will allow the museum to continue to offer free educational opportunities to students in local schools and provide free professional development to more than 1,500 teachers annually.

Voters approved a 10-year, 0.2 tax millage in 2012, which added around $23 million a year in funding to the museum. At the time, the DIA said it would not seek a renewal. In return for that tax, residents of the three counties have free admission to the museum.

Bloomfield Township is asking voters to renew a 10-year, general fund operating millage that generates about $5 million a year. If the renewal fails, the township is giving cuts to public service and operations.

Meanwhile, in Ohio, voters have a number of bonding proposals and tax levy requests on the ballot.

Bellbrook and Troy school districts are asking for tax increases to improve services or build new facilities.

Troy City Schools is turning to voters to approve nearly $100 million of borrowing. The funds would pay for building three new elementary schools and also include new furnishings, equipment, technology and site improvements. The bond issue would result in a property tax in which a $100,000 home would pay $248.52 per year, or $20.71 a month.

If the bond issue passes, once the building projects are complete, the state will write a check to the district for about $31.8 million, which can be used to reduce the millage amount or the number of years the bond issue is collected.

The Bellbrook-Sugarcreek and Valley View districts are seeking a new property tax to fund day-to-day operations.

Bellbrook is looking to raise $3.3 million a year starting in 2021 if the levy measure passes. It would cost a homeowner of a $100,000 home about $16.60 per month.

Bellbrook school board members said the operating levy, if passed, would allow the district to be in the black as projected by the district’s most recent five-year forecast.

If the levy fails, then the district, which has already made $2.3 million in cuts and reductions, will face further reductions.

Greene County’s request for a 12-year, 0.25% sales tax increase to fund construction of a new, larger jail that would cost $70 million.

The sales tax measure would increase county sales tax by 0.25%. Combined state and local sales tax in Greene County is currently 6.75%. The increase would raise the sales tax to 7% for up to 12 years, the period of the construction bond. County officials expect the sales tax increase to raise $7 million in revenue per year over that period.

The tax would be retired after the bond was paid off, likely in less than 12 years, county officials have said.

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