On Monday, the Escanaba School Board held a regular meeting to discuss various agenda items, including the Headlee Rollback. (Sophie Vogelmann | Daily Press)

ESCANABA — The Escanaba School Board on Monday discussed the impact of a Headlee Rollback that could reduce district revenue by roughly $1 million over the next six years.

Nearly all Michigan school districts levy an 18-mill operating millage on non-homestead properties to qualify for state school funding. Revenues from that millage support daily school operations, said Coby Fletcher, Superintendent of Escanaba Area Public Schools.

He added that the state compares how much a district raises from that millage and then provides additional funding, so each district reaches the full per-pupil foundation allowance.

The operating millage applies to non-homestead properties, including businesses, rental properties and second homes, but not primary residences.

According to district officials, Escanaba Area Public Schools is currently authorized to levy 18 mills, but a Headlee Rollback will reduce the maximum levy to 17.3939 mills.

“With that said, we have some options,” said Kevin Pascoe, director of business services for Escanaba Area Public Schools. “You can go and propose to the taxpayers a Headlee Override, or a restoration millage, when you ask the voter to approve restoring it back to 18 mils.”

The Michigan Headlee Amendment, approved by voters in 1978, requires local governments to reduce millage rates when property value growth exceeds inflation. The rollback is intended to limit increases in property tax revenue without voter approval.

Pascoe said failing to restore the millage could cost the district nearly $1 million over the remaining six years of its current 15-year operating term. The state does not replace revenue lost to a Headlee Rollback.

“So you know that if you don’t do anything about it, you will lose out on $156,000 each of the next, you know, these six years that are remaining, which can amount to $936,000 at least, because if there’s any additional rollbacks in any of those years, it’s just going to add to it,” Pascoe said.

Pascoe also discussed a possible “Headlee hedge,” in which voters could authorize a higher millage cap — such as 20 mills — while the district is capped at levying 18 mills unless future rollbacks occur.

“Then what happens is, let’s say you lose half a mill through a Headlee Rollback. Because you’ve asked for that cushion or that hedge, you’re good for two extra mils. It’s wherever you want to set that,” Pascoe said.

If placed on the November ballot, the proposal would appear as a tax increase for the community, though it would apply only to non-homestead properties. Voters can restore the non-homestead rate to the full 18 mills by approving a Headlee Override.

Fletcher said the board will likely need to decide by June whether to place a Headlee Override on the November ballot.

In other business, the board:

— Agreed to seek bids for new or used steel and aluminum track bleachers, which are expected to be installed by next spring. Existing bleachers will be salvaged and scrapped.

— Heard an update on the district’s summer school program. Fletcher said the K-5 program will primarily operate by invitation because of reduced grant funding. Transportation will still be provided, and secondary summer school will focus primarily on credit recovery, Fletcher noted. Students in grades six through eight will be attending summer school in the Escanaba Upper Elementary building due to kitchen renovations in the Junior/Senior High School. The first day of summer school for students in grades nine through twelve will be Tuesday, June 9; for K-12 students, Tuesday, June 16.

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Sophie Vogelmann can be reached at 906-786-2021 or svogelmann@dailypress.net.