Headlee override worth considering

On Nov. 5, Bessemer voters will be asked to consider a proposal to restore the city’s maximum taxing authority for general government purposes to the charter-authorized 20 mills. 

Earlier this year, the Bessemer City Council adopted a resolution authorizing the following proposal to override the tax limitation of the Headlee Amendment to the Michigan Constitution:

“Shall a Headlee Override be adopted so that the current limitations on the amount of city taxes that may be levied against all taxable property in the city of Bessemer, Gogebic County, Michigan, be increased as follows:

“Up to 20 mills from approximately 17.3564 mills ($20 from $17.3564 per $1,000 of taxable value) for general operating expenses.

“If approved and levied in its entirety, this millage would raise an estimated maximum amount of $73,150 for the city of Bessemer in 2014 by allowing the city to levy the maximum mills previously approved by the voters and authorized by the city charter and state law which have been reduced as required by the Michigan Constitution of 1963.”

A 1978 amendment to the state constitution, among other things, imposed a limit on the rate at which property tax revenues of local governments could increase. The Headlee Amendment requires that when increases in a community’s taxable value exceeds the rate of general inflation, the maximum millage rate that could be levied would be reduced or “rolled back.” The purpose of this roll back was to insure that property tax revenues from existing property would not increase by more than the rate of general inflation.

When the city charter was adopted, voters authorized a maximum millage rate of 20 mills. The effect of the Headlee Amendment in Bessemer has been a reduction in the maximum authorized rate to its current 17.3564 mills.

Passing this proposal does not mean an increase in millage.  The primary intent of asking for this override vote is to provide a “cushion” against future rollbacks. With that said, it is possible the taxable millage may increase in the future. Cutbacks in state aid, for example, may require the city to generate additional revenue. But rest assured, this “last resort” would only happen after all other options have been exhausted.

So please carefully consider this proposal before casting your vote. If you have questions, please contact me or any of our council members.

John Frello

Mayor of Bessemer