For Many Years, Downtowns in Communities Across the State Have Suffered Because of Suburban

Dear Editor:

Since 1975, Michigan cities have used a very powerful development tool that has ensured tremendous redevelopment success – Tax Increment Financing. The State’s cities were facing decades of terrible disinvestment. That year, the State Legislators passed the Downtown Development Authority act to stop this slide and over the years this financing tool has leveraged hundreds of thousands of dollars of private investment in our downtowns. Incredibly, some state legislators now propose guttingthis successful tool.

For many years, downtowns in communities across the state have suffered because of suburban sprawl and big box retailing. To attract and keep businesses downtown, coordinated management and investment (just like a mall or shopping center) is needed for street and sidewalk improvements, tenant recruitment programs, and special events. Downtown Development Authorities, funded through Tax Increment Financing (TIF), bring new business, jobs, homeowners, and reinvestment to their communities. As downtown businesses grow, new revenuesare created that are reinvested directly into the Downtowns. TIF allows citizens to gain a vibrant downtown, while not paying any additional taxes for the investment.

The premise behind TIFs is simple: public investment leverages greater private investment. As Downtown Development Authorities (DDAs) improve their districts, property taxes within the districts grow. By investing just these new revenues – dollars that would not have existed without the efforts of the DDA – back into the downtown, they continue to grow employment and generate additional local and state tax revenue. Thus the general public benefits from downtown investment with limited direct costs. It should be made clear that TIF is not an extra tax; rather, it is the return on investment that is reinvested for continued improvements within the downtown.

Every state in the nation, except Wyoming, has TIF legislation. Michigan DDAs have used TIFs for almost 40 years. Research shows that nationally every dollar of public money invested into downtown development spurs $18 of private investment. Tax increment financing is a win-win for everyone – residents, businesses, local communities, and the state.

Unbelievably, some legislators want to significantly alterMichigan’s successful TIF development tool by limiting the tool’s effectiveness.There is no question this will decimate communities across the state by forcing them to ask for additional taxes to support downtown revitalization efforts. Great downtowns don’t just happen. Unfortunately, bad downtowns do – one abandoned storefront leads to another until the whole circle of disinvestment snowballs and grows beyond the Downtown district.. The future without TIFs is certain: curtailing TIFs will halt growth in our state’s downtowns. As downtowns disintegrate, property values for the entire community decline,. As the general fund decreases, residents will be forced to pay more taxes or forego many local services.

Think about a community with a vibrant downtown – those positive images carry over to the entire community, raising property values and creating opportunities for residents and businesses. Now picture a struggling downtown – what does it say about the community?- If you care about your downtown; if you don’t want to reverse decades of progress; if you recognize we must invest in our communities to protect our Michigan’s 21st Century competitiveness and Quality of Life, then I encourage you to contact your legislator and stop this risky proposal.

Sincerely,