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November Election 2018: Defining A 'Sinking Fund' Millage And What It Means For The YCS District

Oct 25, 2018

On November 6th, Ypsilanti Community Schools voters will decide a district request for funding through a new tax levy.  This is a “sinking fund” proposal.  It is somewhat different from an operating millage or bond issue request.  What’s the difference?  How would the Ypsilanti schools use the money, if approved?  89.1 WEMU’s Jorge Avellan went looking for those answers.


Lack of funding is the number one reason cited when school districts ask voters for financial assistance.  William Price is an educational leadership professor at Eastern Michigan University. 

"Michigan is one of a handful of states where the state Legislature provides no money to local school districts for facilities, to build facilities, to make major renovations for existing facilities."

There are a couple of ways districts can go about asking the people it serves for more money.  Many of you have been asked to approve a bond issue in the past.  A school district will use that avenue when it has major projects it needs, or wants, to accomplish.  That usually involves the construction of new buildings or facilities or significant additions to existing structures.  Price says a bond issue is simply a way to borrow money and is similar to how individuals go about buying a home.

"School districts do the same thing, but, instead of going to a mortgage company or a bank, they sell municipal bonds on the bond market.  And they first have to see approval from the local voters in the community for permission to actually sell municipal bonds in the amount of money that would be necessary to build the project."

The money needed to run a district comes to the taxpayer in the form of a general operating millage request.  It’s a property tax levy and, Price says, is at the heart of the services a district provides on a day-to-day basis.

"To pay the salaries and benefits of people, to buy instruction materials, textbooks, to pay for the bus transportation, custodial maintenance, and that kind of thing."

That leaves the option that Ypsilanti Community Schools is putting before voters, a sinking fund millage.  It is different from a bond issue in that it does not require the district to borrow money.  It generates money to pay for facility repairs, educational upgrades and things that aren’t so expensive that a bond issue would be necessary.  But, they are things the general operating budget can’t support."

Alena Zachery-Ross is interim superintendent for Ypsilanti Community Schools.  She says to improve the districts educational offerings, it needs more money for building repairs and technology upgrades.

"If we want to provide our students the excellent education that’s necessary for them to move on to either have a credential in careers or to have that kind of college degree, we need to continue to innovate."

Ypsilanti Community Schools is asking voters to approve a 3-mill tax levy for a period of 10 years.  What does that mean to you as a homeowner and taxpayer?  Professor Price explains.   

"Let’s say it’s a $200,000 parcel, so $100,000 is actually subject to tax for the various taxes that we levied in the school district.  So, three mills would be $3.00 per thousand, its 100,000, so $300 worth of taxes."

That’s if the measure passes.  If voters reject the district’s request, Zachery-Ross says they plan put it again on the ballot in May.

"We know, again, we cannot do this alone.  If it does not pass, we’ll go out, and we’ll continue to educate the community.  One of the things that, I feel, is that we’ve got to start to get other people out, we’ve got to get campaigning, so people understand the why."

We'll find out November 6th if those additional efforts are needed. 

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— Jorge Avellan is a reporter for 89.1 WEMU News. Contact him at 734.487.3363 or email him javellan@emich.edu