Wrapping your Head around Headlee

First, a Quick Refresher on Proposal A

Proposal A, the current State of Michigan school funding model, was adopted in 1994. It strictly controls how school districts receive and spend their funding from the state each year.¹

Each year, state lawmakers set school funding at a certain per-pupil level in the state budget, called the per-pupil allowance. In 2026–27, the total per-pupil allowance is $10,300.²

A portion of the per-pupil allowance is provided to each school district directly from the state. The remaining portion must be collected by the district through a local tax.

Proposal A regulates how much of the per-pupil funding comes from the state versus how much comes from a local community via local tax. In order to receive the full allowance, Proposal A says each school district must collect an operating millage set at 18 mills.¹

The state calculates how much a district will collect through its millage, and then subtracts that amount from the per-pupil allowance. This determines how much the state will contribute to each district. Every district has a unique number of non-homestead properties with varying taxable values, so Rockford's 18 mills will generate a different dollar amount than other districts. Ultimately, the goal is for each district to successfully levy 18 mills on non-homestead properties, allowing them to receive the full $10,300 per student.

An 18 mill tax rate charges $18 for every $1,000 in taxable value on non-homestead properties in the district.³ In Rockford, 18 mills delivers about $9.5 million each year, which translates to $1,200 per student.⁴

This is why the millage matters so much: it's the local portion of a funding formula the state has built its contribution around. If the local millage does not pass, the state will not make up the difference.

In summary, state law dictates that school districts must levy 18 mills to cover the local portion of school funding. So why is there "21 mills" in the Rockford ballot language? What's up with those extra 3 mills? This is where the term "Headlee" comes into play.

What is "Headlee" and What Does it Mean?

There are two parts to consider: the Headlee Amendment and the Headlee Restoration (also known as the Headlee Override).

The Headlee Amendment was a state constitutional amendment approved by voters in 1978. Its goal was to ensure homeowners did not pay a tax amount that was higher than the tax rate that voters originally approved. Property values change over time, and this can happen when values rise very quickly. The amendment automatically "rolls back" the tax rate to adjust for this growth.⁵ As a result, the district does not collect the full 18 mills the state expects and will not receive the full per-pupil funding allowance.

It's easy to think, "Lower taxes = good." But remember, this funding pays for operating expenses: teacher salaries, utilities, and other operational expenses. School districts would not receive a portion of this funding, even though voters approved them to receive it. And the state of Michigan doesn't automatically fill in the gap.³

That is where the Headlee Restoration (or Headlee Override) comes into play. This restoration allows local entities to ask voters to approve preserving the tax rate at the same level (in this case, 18 mills) across the millage period, at times when increasing property values would automatically roll back the tax rate to less than the 18 mills previously approved.⁶

No one knows if or when a Headlee rollback will happen in the future, or how large it might be each time. When voters approve a millage, it is often for multiple years — Rockford's covers the next four years. It's expensive and time-consuming to hold a special election just to restore the 18 mill rate.⁷

So school districts often include language in the ballot that gives them enough flexibility to restore the tax rate back to the full 18 mills, covering the entire multi-year millage period.

RPS has set its Headlee Override at 3 mills for the next four years. Other districts may ask for more or less depending on factors like the length of the millage — there is much more uncertainty about Headlee rollbacks over a 10-year millage than a 4-year one.

Proposal A is clear, though: this school funding tax rate cannot exceed 18 mills. So while a Headlee Override allows school districts to restore the tax rate, they are restricted from ever setting it above the required 18 mills for this operating millage. If there's no rollback, those 3 mills are not touched.

Here's how that plays out in the actual ballot language (bold and underline added for emphasis):

Your 2026 ballot includes both parts in one vote:

• The Operating Millage — Authorization to levy 18 mills on non-homestead property, which funds day-to-day school operations and is factored into the state's contribution to the per-pupil foundation allowance.
• The Headlee Override — A cushion of 3 mills that exists to authorize the school district to continue collecting exactly 18 mills each year for the next four years.

Has Rockford Used the Headlee Override?

Yes. Looking back, Rockford has had to use the Headlee Override to restore the tax rate back to 18 mills each year for the past four years. The chart below shows the rollback and restorations for Rockford Public Schools during that time period.⁸

How are these rates calculated? Kent County calculates the millage reduction fraction. RPS uses this to complete its annual L-4029 form, a mandatory tax filing to request and set property tax millage rates each year.⁹

Can You Explain It a Different Way?

Still a bit confused about how Headlee works? It's a complex topic with plenty of nuances. Here's a short story to explain it through a simpler framework.

Tying It All Together

State of Michigan law expects school districts to levy an 18-mill non-homestead property tax to cover a portion of state school funding each year. Rockford Public Schools is asking voters to approve this property tax on its November 3 ballot for the next four years. In order to account for economic uncertainty during that time period, they are also asking voters to give them the ability to periodically adjust the tax rate to ensure it stays exactly at the 2026 voter-approved 18 mill level for the duration of the millage.

The same 18-mill rate has been approved by Rockford voters since 1994, when the current school funding model was adopted. By approving this school millage, Rockford voters ensure that the district and its students receive full per-pupil funding for each of the next four years to pay for critical operating expenses.