As many already know, HB 4317 was introduced which would allow for any governmental unit to opt-out of existing DDA’s. This legislation would effectively kill many DDA’s throughout the state. I had a very good meeting with Rep. Mike Callton (R-Nashville), who is the sponsor of the bill.
First, his intention was not to allow immediate opt-outs. He is a former county commissioner and has concerns with tax capture by DDA’s. His original intent was to allow pre-1993 DDA’s to have an option to opt-out. I explained to him how a DDA captures only incremental growth and that the development would not have happened otherwise. I also explained how post-1993 DDA’s only have the opportunity to opt-out before the DDA is set up, and that any opt-outs after the creation of a DDA could have tremendous negative effect on jobs and economic development. We had a good discussion about the ins and outs of DDA’s and TIF’s, including how they are structured and funded. We also talked about the need for regionalism in economic development and the burdens being placed on all entities.
In the end, the discussion focused around the possibility of allowing DDA’s to return dollars raised from special millages back for those purposes. Under current law, a DDA can reduce a total tax capture but cannot send money from a special millage back to the source. The final discussion also centered around the possibility of units of government being able to recapture the natural inflation of the district (and not the growth created by the DDA).
Rep. Callton was very open to what the League had to present, and expressed an interest in continuing to talk about these issues before moving forward with the legislation. I will continue to talk with him and his staff to see if there are appropriate ways to compromise moving forward.
Andy Schor is the Assistant Director of State Affairs for the Michigan Municipal League. Contact him at (517) 908-0300 or by email at aschor@mml.org.
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