What Do You Need to Know Before Voting on the Millage Question?

Send your questions about the May 3 election into the Ferndale Patch and we will answer them.

Ferndale residents will head to the city's nine precincts May 3 to vote on a millage increase called a Headlee Override. If the millage passes, it will allow the Ferndale City Council to raise the city's general operating tax rate 3 mills for fiscal year ending 2012 and up to 2.45 mills for the next four years. The increases would expire Dec. 31, 2015.

The increase would raise your total tax bill about 6 percent the first year and an additional 5 percent the next four years.

The money would go into the general fund to help close a projected $2.3 million shortfall for fiscal year 2012 and a projected shortfall of $16 million the next five years.

Those are the basics of the millage.

Check out our May 3 election landing page for your polling location, previous budget stories and context .

What questions do you have? You can drop them in the comments or email Ferndale Patch editor Terry Parris Jr. and he'll find the answers for you: Terry.Parris@patch.com

Joann April 28, 2011 at 12:44 PM
What is the true percentage of increase? Some are saying 38% while others are saying 11%. What is the truth???????
Susan April 28, 2011 at 02:11 PM
Does this mean raise 6% now and than lower to what would have been 5% and than keep it the same or less for 3 more years? I could live with that. But they need to have a plan so we can return to what it is now...which is difficult enough for most people. I would like to see the plan before I vote.
Ardy April 28, 2011 at 02:38 PM
Joann -- That's a product of the "No" group propaganda. They want you to believe that you total tax bill is going up 38%, that's why they have worded it that way. The "No" group has only recently came out publicly and admitted they were wrong. Now, the "No" group is saying that your city tax portion of your bill will go up 38%; which is closer to the truth but still not quite right because the first year city tax would go up a portion of the allotted amount, then if needed the amount would go up to the full 5 mill amount for four years. However, Your total tax bill will not go up 38%, it will only be going up 11% if the full allotment is enacted after the first year. As the article cites, the first year would only be a 6% total tax bill increase. This increase is timed to sunset with other mills like the school bond and debt servicing; in turn your taxes should drop about 18 mills in five years.
Terry Parris Jr. April 28, 2011 at 02:45 PM
Joann: The percentage increase of the Millage, if it passes, will be about 6 percent this year to your overall tax bill and up to an additional 5 percent the next year (spanning through 2015). It's a five year millage, expiring on Dec. 31, 2015.
Terry Parris Jr. April 28, 2011 at 02:48 PM
Susan: If the millage passes, it will raise your overall tax bill about six percent this year (July 1) and then about 5 percent the next year (July 1) -- for an overall increase of about 11 percent. The millage will expire on Dec. 31, 2015, if it passes. It says this in the language of the proposal. It would be against the law for them to keep the millage passed Dec. 31, 2015, without the vote of the people.
Greg Pawlica April 28, 2011 at 02:51 PM
Joann, If the millage passes, you will see an increase of 6.2% to your 2011 TOTAL Property Tax bill. This is because the millage rate will only increase 3 mils for 2011. In 2012, the millage would increase to a maximum of 5.45 mils (or an additonal 2.45 mils over 2011) you will see an increase in 2012 of 4.8% OVER 2011. Add 6.2 and 4.8 and you get 11%.
A. Citizen April 28, 2011 at 03:02 PM
I wouldn't trust any of these percentages because they are based on averages. No one person is average. Each household will be impacted differently. If you are a long term resident it is likely your taxes will rise significantly because the Headlee Amendment prevented them from getting more than the rate of inflation on your house values. With the overide you will pay one big increase this next year, without ever seeing any prior reduction. If you are a more recent resident whose taxes decreased with the decline in values, you will pay more, but possibly less than you paid in the past when house values were higher. You need to look at your individual impact. Don't buy into the Yes group averages!
Terry Parris Jr. April 28, 2011 at 03:05 PM
A. Citizen: The percentage that taxes will go up are not based on averages. The 11 percent is based on whatever taxable value you put in, divided by 1,000, multiplied by the rate. If you're taxable value is $35,000 or if it is $100,000, your taxes will still go up about six percent in 2011 and about 5 percent in 2012.
A. Citizen April 28, 2011 at 03:14 PM
And for the record our City Tax will go up 24.5%, put the total property tax is only 9.7%. So be very careful in what numbers you use to compare. And to to the older longer term owners please note your taxable value is still climbing if it is less than your SEV, so the overide is a double edge cut. Tax increase on value increase.
Terry Parris Jr. April 28, 2011 at 03:35 PM
A. Citizen: Are you talking about the 24.7689 (2010) tax rate? The City portion of taxes will increase about 22 percent. Just as the general operating tax rate will increase 37.5 percent. But your overall tax bill, what you pay to the city, the number you write on the check, will be 6 percent more this year and 5 percent more the year after, if the millage passes. If the millage doesn't pass the increase (or decrease) will be based on your TV going up or down. Some taxable values are going up, some are going down. But regardless of that, the percentage increase on a tax bill will be the same (if it passes)... what you pay won't be the same because TVs aren't all the same... but the increase in percentage will be the same for all of Ferndale.
Greg Pawlica April 28, 2011 at 04:09 PM
Percentages are based on the TOTAL Millage Rate that is used to calculate property taxes. The current rate is 48.0584. This rate does NOT fluctuate. Add 3 mils, you get 51.0584 - an increase of 6.24% increase for 2011. In 2012, 2.452 mils are added (total of 5.452 mils overall), the total millage rate equals 53.5104 - an increase of 4.80% increase OVER 2011. 6.24 + 4.80= 11.04% The VARIABLE is not the tax rate of 48.0584...it's the TAXABLE VALUE of property...that determines whether taxes go UP or DOWN...NOT the TAX RATE!!! A home purchased in 1999 for $50,000...(homestead)...now sellable for $80,000 2010 Taxable Value = $47,630 - paid about $2300 in taxes. 2011 Taxable Value = $38,760 - WOULD PAY WITH MILLAGE = $1980 Even with the millage, the taxes decrease because the taxable value on the home dropped...because their taxable value is lower today then when the purchase...so they dropped. A home purchased in 1987 for $24,000...(homestead)...now sellable for $80,000 2010 Taxable Value = $30,240 - paid about $1500 in taxes 2011 Taxable Value + $31,752- WOULD PAY WITH MILLAGE = $1621 This resident is paying more because their taxable value increased -- by law, a taxable value cannot exceed 5% per year. This millage will affect each home owner differently, but without the millage we will ALL be affected EQUALLY.
Derek Pratley April 28, 2011 at 04:38 PM
JoAnne - the true answer to your question is "both percentages are correct"... quite why so few people will 'admit' this is beyond me... When you get your property tax bill, there are charges from the City of Ferndale, the Ferndale school district, Oakland County, the Zoo, the list goes on.... What the Citizens are voting on is to increase the City of Ferndale portion of the tax bill only. The millage increase doesn't affect the school district, Oakland County, the Zoo, etc etc. So if you consider the City of Ferndale portion of your tax bill only, the full 5.45 mill increase is indeed 38%, there is no getting around that. If you bring in all of the other taxes, the full increase represents 11%. The higher your homes' taxable value, the more $$$ your increase will be. There seems to be a dispute about the average taxable value of homes in Ferndale - in 2010 it was $43k (i.e. theoretical market value of $86k) but of course that is a City-wide average. Regards, Derek
Terry Parris Jr. April 28, 2011 at 04:46 PM
Well said Derek (as usual) ... except it's not the whole city portion, just the general operating portion that will increase 38 percent. The city portion would increase about 22 percent and the overall tax bill, the check you cut to the city, as you said, will be about an 11 percent increase. All of this, of course, is if the millage passes.
Derek Pratley April 28, 2011 at 04:47 PM
Yes Ferndale Patch - here is my question;- Only one budget has been presented for public review. All of the adjustments to the budget will be incorporated into follow-up budget documents, which will be made public AFTER the millage vote > why is that? Surely the best overall version of the budget is what voters should have to hand before they make their decision.... just sayin'
Terry Parris Jr. April 28, 2011 at 04:53 PM
So you want to see the budget and the cuts that would take place before you head to the poles on May 3?
Derek Pratley April 28, 2011 at 05:05 PM
Terry - what I'm saying is the Citizens were presented with a budget producing a $2.3m deficit, which in due course prompted the request for a millage increase. After all of the follow up work that has been done since this original budget was drafted, what does the budget look like now and what is the current budgeted deficit? Specifically - would City Council have asked for the same millage increase now, given the revised budget figures? Who knows? We won't - at least not until AFTER we have voted on out-dated numbers.
Terry Parris Jr. April 28, 2011 at 05:12 PM
Followup work as in the concessions? (Finance director says that will save about $170K.) We've discussed this before, but state revenue sharing is still a question mark. I'll see what I can find out on what they think is the new shortfall number is.
A. Citizen April 28, 2011 at 05:15 PM
Terry, because my taxable value is increasing and I know aht the 2011 value is, alonng with the proposed City rate, my City Taxes would increase 24.5%. Not the 22% average. There are other factors along with the overide that impact each homeowners taxes. Therefore, each homeowner should ignore all these rates being thrown about and look at their own individual numbers and the impact. Mr Pawlica's example provides where an longer term resident taxes will increase in comparison to prior years, rather than decrease. Now use that and put in some realistic home values a look at the impact. Our TV is more than double the 1987 example, and why the impact is greater than the "average".
Terry Parris Jr. April 28, 2011 at 05:26 PM
A. Citizen: You're absolutely right. Everyone should do their own math: 2010: TV divided by 1,000 multiplied by the tax rate (about 48) = dollars paid 2011: TV divided by 1,000 multiplied by the tax rate (about 51 [if millage passes]) = dollars paid 2012: TV divided by 1,000 multiplied by the tax rate (about 53.45 [if the millage passes]) = dollars paid As Greg said: The variable is the TV, not the rate.
A. Citizen April 28, 2011 at 05:39 PM
So Terry, knowing that the older, longer term homeowner is going to bear the larger portion of this overide, by nature of the examples, will you conceed that this is the element of the city population that may be the least likely to afford the tax increase as well? If you have owned the house for a while where TV is still rising to the SEV, and you add the overide impact, those of us closer to, or already at retirement are going to take a larger hit than the newer residents if this passes. And what does this do to those older owners, on fixed income, where their taxes grow 9-10% (not 6%). Will they give up their food or medicine to pay these taxes to keepa roof over their head? Will they forgo maintaining their houses to the detriment of house values overall? Cause and effect.
Terry Parris Jr. April 28, 2011 at 05:48 PM
Everyone has a different situation A. Citizen. I think it would be unfair and inappropriate to assume what one can pay and what one has to give up, without knowing who that "one" person is. We've never reported that 11 percent is a small number or that 11 percent is a big number. We've just reported that taxes, if the millage passes, will increase about 11 percent.
Terry Parris Jr. April 28, 2011 at 10:08 PM
Derek: Wollenweber told me that Council, through the budget meetings, have pretty much discussed what cuts would be made if the millage doesn't pass -- even though they are not solidified in a document. He said, with the changes that have been made (concessions), if the millage doesn't pass, about "10 or so" positions would be cut. He said Wednesday, the budget will be finalized and all the changes will be made.
Thomas Gagne April 29, 2011 at 06:56 PM
Terry, I noticed you answered that question from the perspective of "the overall tax bill" without asking Joann if she was homestead or non-homestead. The answer is different depending on which she is, or which any property tax owner may be. You also misstated, I think, when you wrote ".. your overall tax bill" since any taxpayer's "overall tax bill" includes many taxes including state, federal, and personal property. Since the tax is specifically designed to raise revenue for the city's operating budget then the only "precise" answer is the percentage increase for that specific millage, which is 21% the first year over 2010's rate and 38% the second year over 2010's rate. Our city is not facing an 11% budget deficit. It's facing a crippling 30% budget deficit according to the draft FYE 2012 budget posted on the city's website.
Thomas Gagne April 29, 2011 at 07:04 PM
I agree that it would be helpful to see an updated draft budget without the millage increase. I'm curious where those 10 position are, and what other cuts were made. The better informed voter is, I hope, a better voter.
Terry Parris Jr. April 29, 2011 at 07:08 PM
What I'm saying is that the check you write for your tax bill is not increasing 38 percent. The city operating portion of what you pay in taxes is increasing 38 percent. From 14.5 to 20. But when Joann sits down to write her check, her bill will not be 38 percent higher than the previous bill. So, I guess we should clarify: Is the question... How much more am I paying in the city's general operating tax -- which is part of several other millages from zoos to schools to debt bonds? Or is the question, How much more will I be writing my check for? I guess I'm looking at is as I would if I weren't a journalist... and that is the nut of the whole thing -- How much MORE am I paying? Not how much more am I paying in this portion or that portion, but how much more overall. With that said: Joann: If you're looking for a break down on each portion of your tax bill, check out the city budget here: http://ferndale.patch.com/local_facts/may-3-election-resources It's confusing and complex, but I'd be more than happy to explain it to you. Feel free to email me at Terry.Parris@patch.com.
Terry Parris Jr. April 29, 2011 at 07:14 PM
I'll try to get some detail on those 10.
Terry Parris Jr. April 29, 2011 at 07:17 PM
Correction: How much more am I paying in the city's general operating tax -- general government, police, fire? Or is the question, How much more will I be writing my check for -- -- which is part of several other millages from zoos to schools to debt bonds and the general operating tax? Sorry!
T. Scott Galloway May 05, 2011 at 02:50 AM
Mr. Pratley: Thank you for attending the many budget meetings we held and participating, albeit at the end of the process. I don't know how else to reach you so i hope this forum is acceptable for answering your questions of this evening. Ferndale's Unreserved Undesignated General fund balance is $3.987 million which is 21% of our general fund budget for FYE 2010. Our auditor, the accounting firm of Abraham and Gaffney reccomends that this fund balance be at least 20% of the general fund budget. In answering your question about the work we did during the budget process, those were ideas that thankfully were largely not adopted, but if they had been they been adopted they would have brought the budget into balance as required by law.


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