The House Commerce Committee took testimony Wednesday on House Bill 5856 that would revamp state law on downtown development authorities — revamp, but not reform, argued MAC’s Deena Bosworth to committee members.
According to the MIRS News Service (paywall protected) Bosworth “… said the bill ‘falls far short of what we consider real reform.’
“Bosworth argued the continued idea that TIF districts can capture county tax dollars without any say from the counties is ‘fundamentally unfair.’
“‘The proponents of downtown development authorities anywhere and everywhere across the state will tell you that that increased revenue would not be there if wasn’t for their efforts,’ Bosworth told the committee. ‘I happen to disagree.’
“Bosworth used the example of a Home Depot being built outside a true downtown through a DDA. Westland apparently used its DDA dollars to build a city hall, she said.
“‘County revenue for municipal infrastructure projects, I don’t think that was the intention,’ Bosworth said.
“Over the last 10 years, Oakland County has had $70 million in tax revenue captured.
“‘Oakland County wants to have a say in how long they’re there, what projects are done and what county revenue is being captured for what purposes,’ Bosworth said.
“Bosworth also told the committee that MAC had been promised ‘significant reforms.'”
The effects of poorly designed tax capture laws on county services was the topic of the second day of a special MLive series on tax increment financing, with MAC staffers making the case for obvious and immediate reforms.
Commenting on a longstanding problem with downtown development authorities created decades ago, MAC’s Deena Bosworth said, “If something was created in 1980, we’re getting as much revenue from that property as we did in 1980.”
MLive’s Emily Lawler also reported on the effects on special millages:
“Little known to voters is that the capture can also come out of special millages.
“For example, voters might approve a special millage for senior citizen services at the county level. If the county includes a tax capture district, that district is entitled to capture a portion of that millage – something that’s not included in the ballot language. As a result, some voters may not know that when they voted to increase senior services, they were also voting to give part of that increase to a DDA.”
For example, in Bay County alone over the last decade, about $4.5 million in special millage funds have been diverted via tax capture. These funds would have gone to programs for everything from veterans and seniors to insect control and roads.
Keep your eye on www.mlive.com and the blog all week for additional coverage of this issue.