Breaking it All Down

Term 1

Non-Homestead

Michigan properties are divided into two categories:

Homestead

A principal residence — the home that you both own and occupy as your primary place of residence. Each taxpayer may claim only one property as their homestead.¹

Non-Homestead

All other properties, such as businesses, rental properties, commercial and industrial property, and second or vacation homes.

Your property has what is called a principal residence exemption, shown as PRE/MBT on your tax bill. This exemption lowers your property tax bill by omitting the non-homestead tax. When you see 100% PRE/MBT, it means your home is fully exempt from the school operating millage because you own and occupy it as your primary permanent residence.

Can principal residences have a PRE/MBT less than 100%? Yes. For people who have a registered business where they also primarily live, the PRE would be less than 100%. For example, a bed and breakfast operating out of someone's home: the State of Michigan allows a partial exemption on the portion of the property used as the owner's principal residence.²

Term 2

Operating

This is the purpose for the money generated by the millage. For this millage, the money raised primarily pays for day-to-day operating expenses, including:

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

It makes up more than 8% of the district's total budget.³

Term 3

Millage

A millage charges tax as a percentage of a property's taxable value. One "mill" equals $1 in tax for every $1,000 in taxable value.⁴

RPS does not independently choose its own rate for this millage. The state expects that every district will pass an operating millage set at 18 mills, as part of the 1994 Michigan Proposal A school finance reforms⁵ — 9 mills on the Summer Tax Bill and 9 mills on the Winter Tax Bill. And since 1994, Rockford has consistently renewed this millage every time it's been on the ballot, most recently in November 2022.