Debate over property tax millage reduction for OCCOA continues

GAYLORD — Earlier this month, the Otsego County Board of Commissioners signed off on a measure that will have the voters decide on whether to renew a property tax millage to fund the Otsego County Commission on Aging for the next five years.

The county board approved the ballot proposal with two changes: one involves reducing the longstanding one mill rate to .8929 of a mill, roughly a 10 percent cut, and instead of placing it on the Aug. 6 primary ballot, the question will appear on the November ballot.

More: County board trims OCCOA millage request, moves issue to November ballot

Jason Clement of District V has been among a core group of commissioners seeking a millage cut for OCCOA. Basically he believes that the commission on aging has a strong enough balance sheet and when combined with rising property values, which in theory should increase the money generated from the tax, will enable the commission to weather the cut without significant damage to programs and services for the county's senior population.

Hayes Township Supervisor Mary Sanders also serves as president of the board overseeing the OCCOA. She noted that the senior population represents the county's fastest growing demographic group and said the commission must have sufficient funding so it has the resources required to address food security, estate/tax planning, and medical and mental health issues that can suddenly leave someone in a vulnerable position.

The millage reduction for the commission has been percolating in board and committee meetings for the last month and has sparked considerable debate.

Clement said the county will take in approximately $16 million from all of its property tax levies in 2024. Of that amount, approximately $9.5 million is used to fund animal control, the county transit or bus system, the library, OCCOA and other services.

He points out that the commission on aging has doubled its savings account, called fund equity, from $700,000 to $1.4 million in the last five years.

At a previous county board meeting, commissioners Henry Mason and Jonathan Turnbull proposed reducing the OCCOA millage to .50 of a mill, or a 50 percent reduction.

"A few of us jumped in and said I get the idea that you want to see this get cut. But I feel like you can't just cut someone's budget in half. I think we need to take another look at it," Clement said.

Later at a special meeting of the finance committee that was attended by the OCCOA, the organization was told that "you have got a group of commissioners that want to see a reduction and one mill is not going to go through," Clement recalled.

It was at that juncture when OCCOA suggested reducing the millage to about .90 of a mill, according to Clement. Eventually that number was reduced to .8929 and that is what was passed by the county board on a 7-1 vote, with only chairman Doug Johnson dissenting at the May 14 meeting.

"They essentially offered the cut and we agreed," said Clement.

He also noted that the transit and recycling systems voluntarily agreed to a similar reduction.

"They volunteered to do it because they are building money up," he said.

"We went into that meeting with the concept that we would reduce the millage from one mill to .95 of a mill because there was a prior meeting with commissioners that indicated that they would not support anything if we continued to ask for one mill," said Sanders. "We thought that reduction was appropriate as it was equal to (the reduction) for the bus (transit) system."

Clement believes the $1.4 million OCCOA has accumulated in savings will enable the organization to adjust to a temporary reduction in property tax revenue. He noted that because of rising property values, the money the millage will bring in is likely, although not guaranteed, to increase over the next five years.

"For example when the millage was passed five years ago, the money was about $1.2 million. This year it will total about $1.6 million," he added. "I would say the way it is going they (OCCOA) are going to be back to even (where they are now) in about two years and if a slowdown occurs, they will back (to even) in three years in a worse case scenario."

Sanders said trimming the OCCOA's millage by about 10 percent will make it challenging to meet the needs of the county's senior population.

"It will be very difficult to provide the increased services that the seniors will need in the next few years with the reduction," Sanders said. "We are already seeing an increase in demand for services and we have been for the last few years. We want to provide the services at the same level of expertise that we are now providing those services."

For example, Sanders said OCCOA provided over 63,000 meals to seniors last year.

"We helped 337 seniors with tax returns for no charge and that (program) has an income qualifier so I could not get that help," she added.

In the fourth quarter last year, the advocacy department had over 1,100 appointments and 800 of those were for the yearly requirement of the Medicare Part D insurance program, Sanders said.

Sanders said the transit or bus system did reduce its millage rate to .55 of a mill from .60.

"However in a previous year they only levied .50 (of a mill). Interesting isn't it?" she said.

Sanders said recycling was authorized to levy up to .35 of a mill.

"I have not looked at my tax bill to see if they levied the .35 for this past year or whether it was less. I know in past years it has been less than .35," she said.

Sanders said she couldn't confirm whether OCCOA had $1.4 million in its fund equity or savings account but said the agency needs financial flexibility to adjust to unexpected surges in demand for services.

"However, we have been very fiscally responsible because we are looking to the future to be able to provide all of the services that seniors demand. We may have to provide 70,000 meals this coming year. We might have to provide in-home services for the most frail and needy that will take up a great deal of resources. It takes personnel and funding and if we had not been fiscally responsible, we would not be able to provide the same level of services next year," said Sanders. "Could anyone have predicted that the cost of food would have gone up as much as it has over the last two years?"

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For his part, Clement doesn't object to OCCOA having a savings account to help with unexpected emergencies. He questions whether it needs to be $1.4 million.

As to whether rising property values will enable OCCOA to take in the same amount of money in two or three years that is does now from the one mill tax, Sanders said that requires a lot of assumptions that may not pan out over time.

She is a township assessor with many years of service and noted that after the passage of Proposal A in 1994, which limited the amount that property taxes could increase on an annual basis, the inflationary factor that could be applied to the tax bills in the first year was 1.026 percent and then it went to 1.028 percent and so on.

"That's a long way from the 1.05 percent that we had for '23 and '24. In 2022 it was only 1.03 percent. The norm is about 1.02 something for all of these years so I can't predict what the future is going to be," she said.

Will commissioners judge budget requests from county administration, the courts, prosecuting attorney and the sheriff department by the same standards they are now applying to OCCOA?

"We are putting pressure on everybody who comes before us to get their number down and we will judge them by the same standard that was used for OCCOA," Clement said. "Next on the list is the renewal for the University Center/M-TEC next year."

— Contact Paul Welitzkin at pwelitzkin@gaylordheraldtimes.com.

This article originally appeared on The Petoskey News-Review: Debate over property tax millage reduction for OCCOA continues