BD tax mistake hits district residents with double winter tax millage

Some residents in the Britton Deerfield school district were surprised to find a large increase when they opened their winter tax bills at the end of November. Taxes from a millage for a district addition were double what is normally billed, according to resident Greg Gaw.

The 20-year bond, which passed in fall 2006, levied a millage yearly until August 2022 when the tax form the district completes was left blank on the line that specifies the amount to be collected from taxpayers. That meant that those taxes were not billed or collected in late 2022.  

The tax issue came to the attention of Gaw last Monday when his neighbor asked him if he’d looked closely at his tax bill. “He was freaking out because he’s on a fixed income and he has no idea how he’s going to pay this. He’s considering putting his house up for sale over this,” said Gaw.

For many in the community, the increase in their winter tax bill is between $500 and $1,000, he said. “If you have an escrow account, it’s going to short your escrow.”

A representative from TLC Community Credit Union confirmed that such an increase in the millage rate will affect monthly mortgage payments. The credit union or bank will have to pay the tax, and early next year will calculate how to recoup the shortage from the mortgagee, who has the choice of paying it in a lump sum or spreading it out over 12 months by adding the amount to their mortgage payment. In addition, the mortgage holder will increase the amount of the property owner’s payment to compensate for what they calculate will be a higher tax bill the next year.

Lenawee County Equalization Director Marchelle DeLong released a statement on December 5 stating that the issue affects the townships of Raisin, Ridgeway, and Macon, and approximately 1,400 parcels.

“In September of 2022, the L-4029 form (the tax rate request form) for Britton Schools was received in the Lenawee County Equalization Office without a millage in column 11 for a millage to be levied. We need this to set the tax roll and to send the amount to be taxed to the taxing authorities,” she wrote.

DeLong said her department must set the tax roll based on the request indicated on the form, and that there can be many reasons why a school district may not request the same millage they levied in previous years.

“In January 2023, we were informed by the State of Michigan that the form for Britton Schools sent to Lenawee County did not have the 2.78 bond debt millage on it, but the form sent to Monroe County did. They inquired if the millage was collected,” DeLong’s statement said. “Lenawee County did not collect the millage because we cannot collect a millage that is not requested on the L-4029 form. The state indicated that one way to correct a levy for prior year is through the July or December Board of Review for the current year and the year prior.”

In an interview, Britton Deerfield Superintendent Stacy Johnson was adamant that the tax rate was not doubled for this year and took no responsibility for the error. “Governmental entities somewhere say that the 4029 was incomplete. We do not have an incomplete form here in our office. The only form we have in our file from last year is complete and executed with signatures,” she said. “Our schools suffered because of that error. We had to borrow the money and still pay the bond, and all of that is reflected in four public meetings.”

According to DeLong, “It would appear that the Britton-Deerfield Board of Education met in June of 2023 and approved the amended 2023 tax rates, which included 5.61 mills for Lenawee County compared to the 2.73 mills for Monroe. It would also appear that at their August meeting, they approved a loan from the Michigan School Loan Revolving Fund of over $300,000 to cover the deficit in their budget.” That deficit was the amount of the missing millage funds that were not included in the winter 2022 tax bills, which is $320,860.

In response to those who have said the district could have alerted residents of the missed millage payments, Johnson said, “I feel bad that the community didn’t know, and I hope this can be a learning lesson. How can we as governmental agencies work together so that people would know? Of course, it’s an easier pill to swallow had I known a year ago, that hey, if you get this back from your escrow, don’t spend it, you’re going to need it.

“We assumed that when we were told from the state there was a problem, that everyone was told,” Johnson said, stating that issue was addressed in meetings in June, July, August and September. Minutes for those meetings contain no specific mention of a millage collection shortage, but a handwritten note on the workshop agenda for July 17 states, “Discussion under #10 (which was named “Bond Initiatives”) was relative to tax issue discovered early in 2023.”

When asked what date the superintendent did find out about the mistake on the L-4029 form, she said, “I don’t know the answer, the specific date. But I do know this. In January the taxes start coming in to the business office, but they’re not all the way in until they’re due. So, it would have been late winter, early spring, and then because we’ve done this for sixteen years and never had a problem before, of course Mrs. Andries (Business Manager Sue Andries) and I, we’ve got to make phone calls and call attorneys and figure out what happens now. It doesn’t matter who made the mistake – we don’t feel the mistake was ours.”

“It is my understanding that the superintendent of the district was informed in January by the state at the same time my office was informed. I am unaware of when the education board was informed by the superintendent, but it does look like the loan was taken out in April of 2023,” said DeLong on Wednesday.

According to the Michigan Department of Treasury School Bond Qualification and Loan Program, the district drew $328,860 from the program on April 21, 2023, although board approval was not until August. Interest accrued as of December 6 was $8,717.63.

“I don’t feel the error was made at the Equalization Office. The L-4029 was signed and submitted by the superintendent and business manager with column 11 left blank,” DeLong said. “We cannot collect a millage that is not requested on the L-4029 form.”

Johnson mentioned a line on a copy of the L-4029 that DeLong forwarded to the district recently, where the empty space for the millage amount is highlighted in yellow. “You highlighted it in yellow. Clearly there’s something missing. It says right next to that it doesn’t expire until 2026. So why didn’t somebody make a call. We would have fixed it immediately,” she said.

DeLong said that after Gaw contacted her office in late November to ask about the increase in his tax bill, “We highlighted the form to illustrate the missing information and sent it to Mr. Gaw. We also sent a copy to the business manager at the school district that same day upon request,” she said.

According to DeLong, the Boards of Review for Raisin and Macon townships met in July and acted on the correction for the parcels in Britton Schools. The Ridgeway Township Board of Review did not act on the correction; they can still take action at their December meeting.

“Stacy claims it wasn’t her fault at all,” Gaw said. “When I questioned her, she said ‘not my job.’ It’s money for the school, it’s her mistake, so why would the equalization department tell the community? Stacy would not answer that question.”

Gaw said State Representative William Bruck called him on Saturday to gather details so he can look into the issue, and told Gaw that he contacted Senator Joseph Bellino, who he felt would be interested in helping. “I have had conversations with LISD superintendent Mark Haag and he is trying to gather information as well. No one from the school board has said a word or returned an email,” said Gaw. The school district did have their attorney reach out to him last week.

“My biggest issue with this entire thing is lack of accountability,” he said. “If Stacy Johnson was aware of this on January 3, 2023, it would have been very easy for her to make the community aware so they could have prepared for this, and it would have been a much easier pill to swallow.”

Gaw wants a solution that would make it easier for taxpayers in the district to come up with the money, such as spreading the extra amount over the remainder of the years left in the millage. He would also like Johnson to explain why she withheld this information from district residents for so long. “You knew for at least ten months and nothing was said,” he said. “That’s ridiculous.”