Potential impact of bond on Tecumseh taxpayers

Two bond proposals will be on the ballot May 6, requesting that voters approve the issuing of bonds for infrastructure projects at Tecumseh Public Schools. Proposal I would require levying an additional 0.98 mills, or 98 cents for each $1,000 of taxable valuation, for 22 years, while Proposal II would require levying 1.99 mills, or $1.99 per $1,000 of assessed valuation for 22 years. District officials state that the bond program does not increase a taxpayer’s current millage rate.

“Basically, it’s a matter of extending the present 7.2 mills, and whether the proposals pass or not, you’re out of it by the year 2030,” said Tecumseh Public Schools Interim Business Manager Bill Wright. He said the school district is able to borrow the money through the School Bond Loan Fund with the Michigan Department of Treasury, which enables the district to take advantage of some things, such as using the state’s credit rating, to help hold millage rates down a bit. “You’re paying over a longer period of time, but it will never exceed 7.2 mills, which is what people are paying now,” he said.

Present bond debt also extends until the year 2030, but with the current bond debt remaining as it is now, voters could see a reduction in the millage rate in the year 2016 when it would drop to 5.09 mills. Millage rates then would drop yearly over a 15 year period. With passage of either or both the bonds, that drop in millage rate would not occur and, therefore, taxpayers would not see the savings that currently is anticipated. For a home with an assessed value of $50,000, that translates to approximately $105 that the taxpayer might have seen come off the tax bill in 2016; for a home assessed at $75,000, it would be approximately $158; and for a home valued at $100,000, the drop could have been approximately $211. (All residential properties have “taxable values” and SEVs, or State Equalized Values, which is approximately 50 percent of the market price of a home. The two are different, and only the taxable values are used for calculating property taxes.)

¬If Proposal I passes, the 7.2 millage rate does drop eventually, but not until 2020 when it drops from 7.2 mills to 6.50 mills and gradually declines to 1.41 mills by the final year in 2030. With Proposal II, the decline in the millage rate would not occur until 2025 when it drops from 7.2 mills to 3.27 mills and gradually declines to 1.88 mills by 2030. If both proposals pass, the 7.2 mills would apply until the year 2028, dropping to 7.03 mills in 2029 and to 2.61 mills its final year in 2030. Figures were verified by the City of Tecumseh Assessor Amanda Lacelle.

Wright noted being able to make upgrades that would draw more families into the community and students into the district could also have a positive affect on paying off the bonds.

“If we do get potential growth, then we can pull off the millage quicker,” Wright said. “More growth means ultimately lower millage.”