Last week the House Local Government Committee took testimony on tax increment financing districts. The chair (Rep. Amanda Price) wanted to take the opportunity to give committee members an idea of what TIFs were and how they function. The Department of Treasury testified first giving a brief overview of TIFs, their functions and how they operate. Concerns regarding these districts were stated by both the Department of Treasury and the Citizens Research Council in that residents are not aware of where their tax dollars are actually going (municipality, TIF district, etc).
The League testified in support of TIFs and the important functions they hold within a community. We also stated the importance of having buy in from all taxing jurisdictions if these districts are going to be successful in rebuilding part of a community which in turn benefits an entire region, into a vibrant, beautiful place where people want to live and work. The Michigan Downtowns Association also testified in support of TIFs.
Many of the comments and questions from legislators were centered on these TIF districts renewing themselves and capturing taxes “in perpetuity.” The Michigan Association of Counties testified that there needs to be some sort of overhaul to the system to allow the county to opt out of these types of agreements where the DDA seemingly completed its purpose and the renewal can go on and on, give them some say in the projects, and to allow the counties to keep funding for services they are mandated to provide.
There will be workgroups beginning in the near future on TIFs and tax capture. The League expressed our desire and willingness to participate in these workgroups.
It is important that your legislators know how vital these TIF districts are to your community and the jobs and investment they have brought in. As these workgroups start rolling, we cannot lose sight of the benefit and service they have brought to not just the specific local municipality but the region and state as a whole. Please feel free to contact me with specific examples from your community.