Breaking Down the Numbers

If you've felt overwhelmed by the legal and tax jargon associated with the Non-Homestead Operating Millage, you are not alone. School funding is not simple or straightforward, and our goal is to make it a little easier to understand.

In our last blog post, we provided a high-level overview of the upcoming vote, breaking it into its three main parts:

• Non-Homestead
• Operating
• Millage

Today, we're going to take a deeper look at how funding levels are calculated, and how a failure to pass this renewal would negatively impact our students. We also share a case study from Michigan to consider that's unfolding in real time.

What is a Non-Homestead Property? A Refresher

First, let's talk about the home you live in every day. This is called your primary residence.

So, who does pay the tax? Non-homestead properties do. Non-homestead is just a complicated tax term for properties that are not people's primary homes. This includes:

• Businesses, restaurants, and stores
• Factories and industrial buildings
• Houses or apartments that people rent out to others
• Vacation homes or a family's second house located within the district²

The only time you would ever have to pay this tax on your house is if you run a business out of it. And even then, the state would only charge tax based on a portion of the property.³ State law officially protects family homes from this specific school tax.¹

How are School Funding Levels Determined?

The state of Michigan has strict rules (created by a 1994 law called "Proposal A") about how schools receive and spend their funding.⁴ 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.

Instead of sending school districts their full per pupil funding amount each year, the state expects school districts — including Rockford — to collect a local non-homestead tax to pay for a portion of the total per-pupil amount. Proposal A is the law that set up this school funding approach.²

The amount of money raised by each district is different, because every district has a different number (and total taxable value) of non-homestead properties. For Rockford, the non-homestead millage raises $9.5 million each year, approximately $1,200 per student.⁵ It can be more or less in other districts.

The remainder of the money is provided to each district by the State of Michigan. They will provide more (or less) to other districts, depending on the amount of local tax money each district raises.

Example Scenario: Voters Pass the Non-Homestead Millage

But here is the catch: if residents vote no on their non-homestead operating millage, the state will not add funding to make up the difference. The district will only have the money provided from the state.

Example Scenario: Voters Do Not Pass the Non-Homestead Millage

While complicated, this school funding process was enacted for two main reasons. First, it provided relief for families and their homes by reducing their property taxes and shifting some of that obligation onto local businesses. Second, it also addressed growing financial inequities between school districts.⁶ After Proposal A was passed, each school had the ability to receive the same base of per pupil allowance each year.

Why Does Rockford Public Schools Need This Money?

Money from the school fund is part of a district's general fund, which is commonly used to pay teacher salaries, utilities, and other operational expenses.⁷ Voting no on the operating millage will directly impact these day-to-day operational expenses. The district has not provided the public with a comment about what specific cuts could be taken. According to their overview, it could impact the following:

• Teacher and staff salaries
• Instructional materials
• Student programs
• Educational services
• Technology and operational support
• School safety initiatives and learning opportunities

The tax money generated by the Non-Homestead operating millage represents about 8% of the general fund budget.⁵

Case Study: Oxford Community Schools

Tying it all Together

The impact of a non-homestead operating millage failure can vary. This is because the amount of money districts receive from levying this tax is dependent on the number and taxable value of non-homestead properties located in their district. For some districts, this could be up to half of their operating budget or more.⁷

In Rockford, losing 8% of the school's operating fund budget is substantial. The Oxford case study gives us an understanding of the type and scale of reductions Rockford might experience if the Non-Homestead Operating Millage renewal does not pass. Further, we recently interviewed Dr. Michael Shibler, who served as superintendent of Rockford Public Schools for over 32 years.

Ultimately, it would be up to the current Rockford School Board and administration, with feedback from the community, to determine how budget reductions would impact our district in the event of a budget shortfall.