VBT Director Mullen explains ‘attack’ on DDA TIF funding

By Diane Madigan
Independent Special Writer
At the regular meeting of the Van Buren Township Local Development Finance Authority (LDFA) on Feb. 11, VBT Director of Planning and Economic Development Arthur Mullen gave a presentation on what he considers “legislative attacks” to LDFA and DDA funding.
Mullen said there have been discussions in Lansing about Tax Increment Finance (TIF) collecting agencies, especially the Downtown Development Authority (DDA).
There are eight different types of tax capture authorities allowed by state statute for downtown development, neighborhood improvement, brownfield redevelopment and other uses, according to the Michigan Treasury Department.
The first of these was the Downtown Development Authority Act authorized by Public Act 197 of 1975. It allows local authorities to collect and levy taxes, issue bonds and spend tax dollars within the boundaries of downtown to support new development.
Opponents say the DDAs should be dissolved and all the tax money collected go to the municipality, which needs it so badly these days, where the tax revenue would be handled by elected officials instead of TIF appointees who are not accountable to voters.
Mullen told the LDFA that there are draft bills that have been introduced to the State House Tax Policy Committee to reduce or eliminate the DDAs ability to capture all revenues within TIF districts. Recently the DIA and Zoo Authority have been successful in opting out and the Michigan Association of Counties, Michigan Library Association, and other groups are interested in doing the same.
Mullen said a draft bill sponsored and scheduled to be presented by Rep. Eileen Kowall, R-White Lake, may have options from previous draft bills which included:
• Resetting the TIF base year;
• Automatic elimination of TIF capture after completion of bond-funded projects;
• Automatic expiration of TIFs after 10 years unless indebted and if so, then after 20 years;
• Ability of taxing jurisdictions to opt-out of TIF capture at any time;
• Mandatory expansion of DDA boards to include representatives from all TIF capture taxing jurisdictions;
• Immediate return of all unassigned funds to taxing jurisdictions; and
• Increased transparency due to perceived lack of elected oversight of authorities.
Mullen said Draft #4 bill is out for comments that include some automatic opt-outs still in the bill. The counties still want increased transparency and reporting requirements. There is also some concern that taxing jurisdictions be represented in DDAs.
Mullen said if the bill goes through as drafted if could have significant impacts to the VBT DDA. He added that the VBT DDA does not have any significant outstanding bonds.
[Actually, the VBT DDA has outstanding bonds for Fire Station #2, the Belleville/Ecorse Road project, and future projects within the LDFA.] Mullen is the chairman of the Michigan Downtown Association’s Legislative and Advocacy Committee and he said he has been attending work group meetings with Rep. Kowall in efforts to stop what he called the “risky proposal” that would “de-fund” DDAs and other tax-capturing entities, eliminating successful economic development programs in downtowns, brownfields, industrial districts, and other improvement zones.
Audience member John Delaney asked how this bill would affect the LDFA.
Mullen said the language right now wouldn’t impact the LDFA unless it refinanced its bonds or was planning to do additional investment in the LDFA district. There can only be one LDFA at a time in the community, he said.
He said, right now they are only looking at the DDA Act.