Property is typically subject to a number of different local property taxes.

Graphic 4, see "Calculation of an Individual Tax Bill," shows the real property tax bill for a resident of Midland. The bill lists eight different taxes; the three prefaced by "MPS" are levied for the public school system.[xxxii]

We will briefly discuss each type of local property tax levied by local school districts.[xxxiii]

Local School Districts

General Property Tax for Operating Purposes[xxxiv]

Local school districts can levy a general property tax on nonhomestead real and personal property to finance school operations. The amount of this levy must be approved by the voters in the district, and the millage rate is limited to the lesser of 18 mills or the number of mills levied by the district for operating purposes in 1993,[xxxv] prior to the passage of Proposal A.[xxxvi]

In other words, up to 18 mills can be levied on commercial, industrial, developmental, personal, certain timber cutover and unqualified agricultural property, though this millage is subject to Headlee rollbacks. Revenues from these sources are primarily intended for "operating" purposes. According to Michigan law, operating expenditures include personnel, "furniture and equipment, for alterations necessary to maintain school facilities in a safe and sanitary condition, for funding the cost of energy conservation improvements in school facilities, for deficiencies in operating expenses for the preceding year. ..."[xxxvii] They do not include a sinking fund (the purchasing of real property for building construction and renovations), financing a current or projected operating deficit through district-issued bonds,[43] operation of certain libraries or operating a community swimming pool.[44]

‘Hold-Harmless’ Millage

An exception to this 18 mill operating tax limit is commonly referred to as a "hold-harmless" provision. This provision is tied to a district’s "foundation allowance" — that is, the number used to calculate state government’s contribution to operating spending in conventional local school districts and charter schools.[xxxviii]

Of the 552 conventional Michigan public school districts, 51 are considered "hold-harmless districts," because they have been able to levy a "hold-harmless" millage at one time or another since 1994, the year that Michigan voters passed Proposal A. These districts have been permitted to levy this millage above the amount that Michigan statute typically allows because the districts had fiscal 1995 per-pupil revenues that were higher than $6,500. The millage must still be approved by a majority of voters in the district[45] and is subject to the rollback provisions of the Headlee amendment.

A hold-harmless millage can be levied on both homestead and nonhomestead property, but the size of hold-harmless millages is limited by certain provisions of Michigan law. The first is that a school board of a hold-harmless district

"may reduce the number of mills from which a principal residence and qualified agricultural property are exempted … by up to the number of mills … required to be levied on a principal residence and qualified agricultural property for the school district’s combined state and local revenue per membership pupil for the school fiscal year ending in 1995 to be equal to the school district’s foundation allowance for the state fiscal year ending in 1995, and the [hold-harmless district’s] board also may levy in 1994 or a succeeding year that number of mills for school operating purposes on a principal residence, qualified agricultural property, and qualified forest property."[46]

This statute means that after 1994, a qualifying district may levy a large enough homestead property tax millage to produce a total state and local revenue equal to the amount available to the district in 1995. The effect is to allow a hold-harmless district to receive at least as much under Proposal A as it did before Proposal A (an additional provision of the State School Aid Act ensures that increases in per-pupil operating revenues are financed by state government).[47]

Second, the number of hold-harmless mills must be reduced if a growth in the district’s taxable value drives the annual per-pupil revenue increase above either the dollar increase in the state’s basic foundation allowance[xxxix] or the percent increase in the consumer price index, whichever is less.[48] This provision prevents any growth in hold-harmless property taxes from exceeding the inflation rate, but the provision also makes sure that hold-harmless districts, which already spend more than the average district, do not move too much further above the average when the taxable value of property in the district rises rapidly.

Third, hold-harmless millage rates cannot be greater than the number certified for each district by the state Treasury Department in fiscal 1995.[49]

As of fiscal 2006, 28 districts levied hold harmless millages.[xl] These districts are listed in Graphic 6.[xli]

Graphic 6: Hold-Harmless Districts Levying Hold-Harmless Millages, Fiscal 2006

District Name

Homestead
Hold-Harmless

Homestead Second
Hold-Harmless

Nonhomestead
Hold-Harmless

Ann Arbor Public Schools 5.509

0.000

0.000

Avondale School District 1.320

0.000

0.000

Birmingham City School District 8.950

0.000

0.000

Bloomfield Hills School District 8.116

0.000

0.000

Center Line Public Schools 15.578

0.000

0.000

Clarenceville School District 0.727

0.000

0.000

Dearborn City School District 5.219

0.000

0.000

East Lansing School District 0.857

0.000

0.000

Farmington Public School District 9.160

0.000

0.000

Grosse Ile Township Schools 2.156

0.000

0.000

Grosse Pointe Public Schools 6.265

0.000

0.000

Lamphere Public Schools 14.500

0.000

0.000

Livonia Public Schools 0.600

0.000

0.000

Midland Public Schools 3.591

0.000

0.000

Novi Community School District 3.566

0.000

0.000

Oneida Township S/D #3 6.147

0.000

0.000

River Rouge School District 18.000 1.437 1.437
Romulus Community Schools 8.990

0.000

0.000

Saugatuck Public Schools 1.487

0.000

0.000

School District of the City of Royal Oak 3.503

0.000

0.000

South Lake Schools 4.853

0.000

0.000

Southfield Public School District 18.000 1.633 1.633
Trenton Public Schools 3.732

0.000

0.000

Troy School District 5.739

0.000

0.000

Walled Lake Consolidated Schools 2.108

0.000

0.000

Warren Consolidated Schools 6.717

0.000

0.000

Waverly Community Schools 6.037

0.000

0.000

West Bloomfield School District 3.716

0.000

0.000

Source: "LEA Millage Rates," Michigan Department of Education.

Property Taxes for Capital Purposes

Money expended to finance debt and to obtain, build or upgrade physical assets like school buildings and equipment is considered "capital spending," while money spent on day-to-day needs like school supplies and staff for classrooms is considered "operational spending."[xlii] Michigan law requires that local school districts separate their operational and capital expenditures, and different taxes are levied for each purpose. The revenue sources for school districts’ capital expenditures are discussed below.

Building and Site Sinking Fund Millages

According to Michigan law, conventional school districts may levy a tax on the property in a district to create a sinking fund "to be used for the purchase of real estate for sites for, and the construction or repair of, school buildings."[50] A sinking fund is similar to a savings account into which a district makes regular deposits until the district has saved enough to pay for real estate, repairs or construction.[51]

A building-and-site sinking fund millage is limited to 5 mills for no more than 20 years, and these millages are subject to Headlee rollbacks. The millage must be approved by the voters in a school district and must be presented on the ballot in the following terms: "Shall (district name) levy (number not to exceed five) mills to create a sinking fund for the purpose of (projects to be addressed) for a period of (number not to exceed 20) years?"[52]

Compared to the debt millage that will be discussed below, the building-and-site sinking fund millage is little used. In 2002, taxes levied to service debt accounted for more than 92 percent of combined debt and sinking fund levies.[53] Of the 552 conventional school districts, three districts levied 4 mills or more for sinking fund levies in fiscal 2006.[xliii]

Capital Outlay Bonds for Debt Service

In addition to sinking fund levies, local school districts can finance capital projects by issuing bonds. Bonds are bought by investors who are then repaid by the school district over the period stipulated by the terms of the bond. Depending on the bond’s type, the principal (the amount borrowed) and interest (the fee paid to borrow the principal) must then be paid back from the district’s general fund or by revenue raised through a debt service property tax. Such debt service property taxes, unlike general operating millages, are not subject to Headlee rollback provisions.[54]

Local districts can issue three types of bonds,[55] all of which must be approved by the state treasurer, in keeping with Public Act 34 of 2001:[xliv]

  1. "Resolution bonds" are issued by a motion of the local school board and do not require the approval of the district’s voters. Resolution bonds and the district’s other debt cannot total more than 5 percent of the SEV of all property in the district.[xlv] Annual payments on the principal and interest are made from existing school district monies, not from additional property tax levies.

  2. "Nonqualified bonds" can be issued by a school district for a period of one year to 30 years, and the bonds must be approved by a vote of the school district electorate. The board of education must then levy a tax to make principal and interest payments on the bond. Michigan law does not allow nonqualified bonds to exceed 15 percent of the SEV of all property in the district.[56]

  3. State "qualified bonds" are sold by the district but guaranteed by the state of Michigan, meaning that the district may use the state’s — rather than the district’s — credit rating. Since the state’s credit rating is usually better than the district’s, the district is able to obtain a lower interest rate. Still, the district must first seek and gain approval from the state treasurer to sell qualified bonds, and a majority of the district’s voters must approve a property tax levy to finance the bonds. If the property tax revenue is not sufficient to service qualified bond debt — i.e., to make annual payments on the bonds’ principal and interest — the district can borrow from the Michigan School Loan Revolving Fund. Details about the MSLRF and the numerous steps districts must follow to issue qualifed bonds appear in Graphic 7.

Graphic 7: State Restrictions on Qualified Bonds

To receive state approval to issue qualified bonds, the district’s application to the state treasurer must include the following information:[58]

  • the proposed ballot language to appear before voters;

  • a description of the project that will be financed by the bond issue;

  • a projection of the estimated mills the district will levy to pay the bond;

  • evidence that new buildings financed by the bond issue will be used at a rate of 85 percent and that renovated facilities will be used at a rate of 60 percent;[59]

  • evidence that the cost per square foot of the projects to be financed will be reasonable with reference to local economic conditions;

  • the overall utilization rate of all current buildings in the district, excluding special education purposes;

  • the total outstanding bonded debt and total taxable value of property in the district in the year the application is filed;

  • evidence that the district will pay all outstanding qualified loans related to qualified bonds not later than six years (72 months) after the date on which the bonds are due and payable;[60]

  • the average age of the district’s school buildings weighted by square footage;

  • a declaration of environmental or usability problems to be addressed by the projects;

  • an architect’s analysis of the condition of facilities being renovated or replaced; and

  • an amortization schedule showing that the weighted average maturity of the qualified bond issue does not exceed 120 percent of the average reasonably expected useful life of facilities — not including land and site improvements — being financed or refinanced by the sale of qualified bonds.

Before qualifying new bonds, the state treasurer must determine that the additional bond issue will not prevent the district from repaying outstanding qualified loans.[xlvi] After determining that a district’s application for qualified bonds has met the requirements of state law, the treasurer can grant "prequalification," which allows the district to present the request for a bond issue to voters in the district. If the voters approve the qualified bond issue, the district has now met all the conditions necessary to issue the qualified bonds, and the district may levy up to 13 mills of property tax to service its bond debt.

A district need not always levy a property tax large enough to repay all of its qualified bonds. If a district can get voter approval for at least 7 mills of property tax to repay a portion of the bonds, it can borrow from the state government’s Michigan School Loan Revolving Fund any extra money it needs to supplement the millage and make its bond payments on time.[xlvii] Once the bonds are repaid to the bondholders, the district then continues to levy the millage until the proceeds repay the MSLRF for the loan. The loan may not equal more than the difference between revenue from the millage that a district says in its application will be proposed to voters in the school district[xlviii] and the amount required to pay principal and interest on the qualified bonds. The district is also able to borrow to cover projected lost revenue due to some property owners’ failures to pay taxes.[61]

The full MSLRF loan must be repaid by the district within six years of the bond’s maturity date. For example, if a 10 year bond were issued on July 1, 2006, and the district acquired a loan from the MSLRF to repay the bond, the district would have to repay the loan in full by July 1, 2022, since the bond would reach maturity on July 1, 2016.[62]

Sources: Various, including the School Bond Qualification, Approval, and Loan Act of 2005 and "State of Michigan Bond Qualification Process Overview" (Michigan Department of Treasury).

Recreational Millage

Public Act 156 of 1917 authorizes school districts and municipalities to "operate a system of public recreation and playgrounds."[63] The district’s residents may "vote to provide funds for operating"[64] the recreational facilities, and the district may "acquire, equip and maintain land, buildings and other recreational facilities" and "employ a superintendent of recreation and assistants."[xlix] These recreational millages are subject to Headlee rollbacks.

The 12 school districts that levied a recreational millage in fiscal 2006 are shown in the table below.

Graphic 8: Recreational Millages, Fiscal 2006[l]

Local School District Name

Recreational Mills

Bridgman

0.5000

East Grand Rapids

1.3837

Forest Hills

1.0000

Hamtramck

4.4876

Jackson

0.2000

Northview

0.7500

Novi

0.9800

Rockford

0.9949

Saline

0.8316

Saugatuck

0.2500

Whitmore Lake

0.6099

Zeeland

0.4000

Source: Michigan Department of Treasury

Intermediate School Districts

Under Michigan law, an intermediate school district has some of the powers of local school districts[li] and generally provides certain transportation and special education services to the local districts within its borders. There are currently 57 ISDs, and some of them have boundaries that correspond with county lines. All 552 conventional local school districts fall within the borders of an ISD, and each ISD generally acts as service agency for its constituent districts. (The state’s private schools and approximately 225 charter schools may also receive services from their regional ISD.) Most ISDs are referred to by an area name and an acronym, such as ISD, ESA ("educational service agency"), RESA ("regional educational service agency") and ESD ("educational service district"). Despite the different acronyms, all are ISDs and have the same powers.

ISDs receive revenues from local taxes (discussed below) and state and federal government (discussed later).

Allocated Millage

Before each fiscal year, an ISD’s general fund budget is approved by the ISD’s constituent conventional local school districts. If an ISD is located in one of the 70 Michigan counties without a county tax allocation board, the ISD receives an allocated millage approved by the ISD’s voters at the time the county’s tax allocation board was disbanded.[lii][65] If an ISD is located in one of the 13 counties retaining a county tax allocation board, the ISD submits a general fund operating budget for the coming fiscal year to the clerk of the county in which the ISD is located. The county clerk submits the budget to the county’s tax allocation board,[liii] which then sets a tax rate based on the ISD’s general fund operating budget.[liv] The millage rates for an ISD allocated millage are subject to Headlee rollbacks.

The general fund operating budget includes "revenues from the [ISD’s] share of mills as determined by the tax allocation board or by referendum or state school aid." Expenditures from the general fund operating budget of an ISD include those required for "the operation of all [ISD] programs except cooperative education, special education, and vocational education, [but] … may apply to expenditures from the general fund to assist with the costs of cooperative education, special education, and vocational education."[66]

Information from the Michigan Department of Treasury indicates Clare and Muskegon counties had the state’s highest ISD allocated millage rates in fiscal 2006, each distributing 0.5 mills to their respective ISDs. Oscoda County had the lowest allocated millage rate to an ISD, distributing no millage to the four-county ISD that includes parts of Crawford, Ogemaw, Oscoda and Roscommon counties.

Operating Millage

In addition to the levy discussed in the previous section, an intermediate school district may levy a tax for operating expenses on all real and personal property within the ISD’s boundaries if approved by the ISD’s voters. This tax rate may not exceed 1.5 times the ISD’s allocated millage in 1993[67] and is subject to Headlee rollbacks.

While some intermediate school districts’ boundaries follow county lines, several encompass more than one county. Once a county has collected the revenue from the ISD’s operating millage, the treasurers in the counties encompassed by the ISD disburse the appropriate amount of revenue to the treasurer of the ISD board.[lv][68]

The intermediate district with the highest operating millage is the Branch ISD, which levies 8.0345 mills; the lowest is the Crawford-Oscoda-Ogemaw-Roscommon ISD, which levies 0.6329 mills.

Tax for Vocational-Technical Education Programs

ISDs are given the authority by Michigan law to institute and finance vocational-technical education programs.[69] ISDs may fall into one of two tax limitation categories for financing such programs, but in either case, the tax would be subject to Headlee rollbacks. First, if an ISD levied a tax for a vocational-technical education program in 1993, it may levy additional mills for that program at a rate of up to 1.5 times the number of mills it levied for a vocational-technical education program at that time.[70]

Second, if an ISD did not levy a tax for a vocational-technical education program in 1993, the ISD may establish and finance the program once it has received voter approval to create such a program and to levy a tax up to the limit specified in the ballot question. The highest vocational-technical millage these ISDs can present to voters is 1 mill.[71]

Of the 57 ISDs, 31 levied a vocational-technical education millage in 2006. Of the ISDs that levy such a tax, the Branch ISD has the highest rate, 4.2105 mills, while Oakland ISD has the lowest, 0.6231 mills.

Tax for Special Education Programs

An intermediate school district is required by statute to "develop, establish, and continually evaluate and modify" special education programs for its constituent districts.[72] If an ISD wishes to receive funds from local property taxes specifically for special education programs, it must present to voters in the ISD a ballot question that limits the number of mills that the ISD can levy on all property for operating special education programs.[73] The district may not request a millage rate higher than 1.75 times the number of mills the ISD levied in 1993 for special education operating purposes, and the millage rate is subject to rollbacks under the Headlee amendment.

Every ISD levied a local special education property tax in 2006.Jackson ISD levied the highest tax rate at 5.6229 mills, while Crawford-Oscoda-Ogemaw-Roscommon Intermediate School District levied the lowest at 0.6329 mills.

Property Tax for Regional Enhancement Operating Purposes (Tax-Base Sharing Provision)

Intermediate school districts may levy with the approval of voters a "regional enhancement" property tax. Revenues from the tax are meant to "enhance other state and local funding for local school district operations,"[74] so the revenues are not kept and spent by the ISD itself, but rather passed through to the ISD’s constituent districts. The tax can be levied at the rate of up to 3 mills for up to 20 years and is subject to Headlee rollbacks. The tax can, however, be renewed by a majority of voters in the intermediate school district.[75]

The ISD distributes the revenue to its constituent districts by dividing the total raised under the tax by the number of pupils in the ISD. The per-pupil amount is then multiplied by the number of students enrolled in a particular conventional school district on the most recent pupil count day, and the resulting sum is disbursed to the constituent district within 10 days after the ISD receives the revenue.[76]

The two ISDs that levied this tax in 2006 were the Monroe ISD, whose millage rate is 0.9866 mills, and the Kalamazoo Valley ISD, which has a millage rate for this tax of 1.5 mills.[77]

Borrowing and Bond Issuing

Intermediate school districts may borrow money or issue bonds without the approval of voters[lvi] in the ISD if the total amount of bond indebtedness does not exceed one-ninth of 1 percent of the SEV of the taxable property in the district. Total bond indebtedness does not include bonds issued for vocational-technical education facilities or special education facilities.[lvii][78] The bonds are repaid by revenues from a property tax millage approved the ISD’s voters, but this millage is not subject to rollbacks under the Headlee amendment, which specifically excludes from rollbacks "taxes imposed for the payment of principal and interest on bonds. ..."[79]

Bonds issued under these provisions may be used to purchase building sites, purchase information technology systems and software, or "purchase, erect, complete, remodel, improve, furnish, refurnish, equip or re-equip buildings and facilities the (intermediate school) board is authorized to acquire," including administrative, special education and vocational-technical education facilities.[80]


[xxxii] The first two of these school taxes are for local schools, while the third is levied for the state’s public schools by state government.

[xxxiii] Later, under this primer’s discussion of state taxes, it will be possible to report the total revenue raised by each state tax. A similar breakdown is not possible for local property taxes, however. Government documents report aggregate local tax revenue in such broad summaries as "extra voted operating" taxes, a category that combines at least five different property tax levies. Furthermore, in state Treasury Department reports, aggregate revenues are given not by school districts, but by counties, each of which can contain numerous school districts. See, for example, "2005 Ad Valorem Property Tax Levy Report: Taxable Valuations, Average Tax Rate Data and Tax Levies for Counties, Townships, Cities, Villages and Schools," (State Tax Commission, Michigan Department of Treasury, 2006), http://www.michigan.gov/documents/treasury/2005AdValorem_177897_7.pdf (accessed February 27, 2007).

Two other sources could give the interested reader total locally retained revenue, but again not by property tax type. The fiscal data reported in the electronic module described in Appendix 3 presents total revenue from local sources by district. Readers can also arrive at an unaudited but roughly accurate figure by calculating the revenue from the millage rate for a particular tax — most are listed in this primer — and the taxable value for the appropriate class of property.

[xxxiv] Because this primer focuses on school finance, property taxes levied by counties, cities or municipalities for noneducation purposes will not be discussed.

[xxxv] Certain districts can in fact levy more than 18 mills on nonhomestead property, but they must levy these additional mills through a “hold-harmless” millage, which is discussed below. Michigan education fiscal year runs from July 1 through June 30. Note that this fiscal year is different from the fiscal years of Michigan government and the U.S. government, both of which start on Oct. 1 and end on Sept. 30.

[xxxvi] MCL § 380.1211. According to the statute, a local district, with approval from the electorate, “shall levy not more than 18 mills for school operating purposes or the number of mills levied in 1993 for school operating purposes, whichever is less.”

[xxxvii] MCL § 380.1211(8)(g). Personnel are not directly listed, but are implied.

[xxxviii] This state grant spending is discussed in detail under the section entitled “The Foundation Allowance.”

[xxxix] The basic foundation allowance is the minimum amount of per-pupil state and local tax revenue a school district receives for operating purposes if the district levies the maximum possible nonhomestead property tax millage (either 18 mills or the school property tax millage in 1993). For further details, see the section titled “The Foundation Allowance.”

[xl] Since hold-harmless districts are those that have levied such additional property tax millages at some time since 1995, not all 51 hold-harmless districts continue to levy hold-harmless millages.

[xli] This list is compiled from “LEA Millage Rates,” Michigan Department of Education, http://www.michigan.gov/documents/lea_millage_39045_7.pdf.

[xlii] The distinction between capital expenses and operating expenses is not always intuitive or clearly defined. For instance, the capital expenses that local school bonds can (and cannot) defray are listed at length and in some detail in MCL § 380.1351a. In the case of sinking fund millages, the Michigan School Business Officials Web site posts a series of letter exchanges between Michigan school districts and Michigan Department of Treasury concerning whether a sinking fund millage can be used for a variety of specific expenses (for example, acoustical insulation, basketball backboards, replacement of water heaters, kitchen dishwasher rooms); see http://www.msbo.org/library/SinkingFund/Table_Contents_E_L_.pdf.

[xliii] These are Union City Community School District (4.8575 mills), Dearborn Heights School District #7 (4.5909 mills) and Highland Park City Schools (4.9970 mills); see "LEA Millage Rates."

[xliv] Public Act 34 of 2001 is the Revised Municipal Finance Act, MCL §§ 141.2101-2821; for approval provision, see MCL § 141.2303(8).

[xlv] MCL § 380.1351(2). The district’s current debt as a percentage of SEV is often referred to as the "debt-to-assessed-valuation ratio."

[xlvi] Public Act 92 of 2005 added this provision (MCL § 388.1926(a)) to prevent a district from carrying debt longer than the due date on the bonds the state sold to cover the qualified loan it made to finance the district’s own bonds. Previously, a district could postpone repayment of a loan from the state, a practice that could force the state to incur debt service costs. For an explanation, see House Fiscal Agency, “Legislative Analysis: Create School Bond Loan Revolving Fund,” June 27, 2005, 2.

[xlvii] Prior to July 20, 2005, such loans were financed by a similar program known as the “Michigan School Bond Loan Fund,” also run by state government. The MSBLF still exists to finance those loans, but all districts borrowing from the state after July 20, 2005, receive the loans from the School Loan Revolving Fund. See “School Loan Revolving Fund Process,” (School Bond Qualification and Loan Program, Michigan Department of Treasury, 2006), 2, http://www.michigan.gov/documents/3272_2816_7.pdf (accessed March 12, 2007).

[xlviii] This is called the “computed millage;” see MCL § 388.1923(a).

[xlix] The latter two provisions apply specifically to “any city, village, county or township” in MCL § 123.51, but MCL § 123.52 extends the same provisions to school districts: “Any school district ... may exercise all other powers enumerated in section 1.”

[l] Data provided to the authors by the Michigan Department of Treasury.

[li] Specifically, the law empowers ISDs to perform two basic functions: (1) educate students in kindergarten through 12th grade, as well as operate programs for “preschool, lifelong education, adult education, community education, training, enrichment, and recreation programs for other persons” (see MCL § 380.601a(1)(a)); (2) provide for the “safety and welfare of pupils while at school or a school sponsored activity or while en route to or from school or a school sponsored activity” (see MCL § 380.601a(1)(b)). The other functions as described in MCL § 380.601a involve self-referential duties that stipulate an ISD may manage its own budget and facilities; see MCL § 380.601a(1)(c)-(e).

[lii] A county tax allocation board is disbanded by a vote of the county electorate, and the ISD’s maximum millage rate is set by the voters during that election. Such elections have been occurring in counties throughout the state since 1964 (Tuscola County), with the most recent occurring in August 2006 (Manistee County, Presque Isle County and Chippewa County).

[liii] MCL § 380.624(1); for details related to tax allocation boards, see MCL § 211.211; for ISDs that contain more than one county vis-à-vis tax allocation boards, see MCL § 211.211a. According to the Bureau of Local Government of the Michigan Treasury Department, 13 counties had only allocation boards to set tax rates for the county, township and ISD in 2006; those counties were Arenac, Barry, Cheboygan, Ionia, Iosco, Iron, Kalkaska, Livingston, Mackinac, Mason, Newaygo, Ottawa and Washtenaw.

[liv] MCL § 211.211(1). If the budget would require a millage rate that exceeds the funds available (county and township governments also have claims on the county millage distributed by the tax allocation board). State law stipulates certain conditions for setting tax rates; see MCL § 211.211(3)‑(6).

[lv] ISDs have boards selected by school board members from the ISDs’ constituent districts (MCL § 380.614).

[lvi] MCL § 380.629(2). Approval is not required for bonds issued for energy conservation improvements to school facilities under MCL § 380.1274a or bonds to repay loans from the Michigan Municipal Bond Authority issued in the amount of one-half of the state’s payment to certain districts as resolution to the 1997 Durant v. State of Michigan Supreme Court decision (see MCL §§ 388.1611h, 1611i: see also MCL § 380.629(2)). On Durant-related bonds, see the section titled “Durant-Related Payments” under “State Categorical Grants.”

[lvii] The total bond indebtedness also does not include bonds issued under MCL § 388.1611i, which can be up to one-half of the total payment a district was to receive as settlement of the Durant case regarding special education. These bonds can then be repaid as districts receive settlement payments from the state. For a list of districts and payments involved, see MCL § 388.1611h.