Both chambers of the Legislature finalized a series of bills allowing local economic development tools to be used for transit-oriented development (TOD). The following bills passed without controversy and are on their way to the Governor: SB 1234 (CIA), 1235 (building authorities), 1236 (commercial redevelopment act), 1238 (tax increment financing act); HB 5211 and 5212 (planning and zoning), 5977 (intermunicipality committees), 5979 (historical neighborhood tax increment financing), 5988 (Transportation Economic Development Fund), 5989 (Local Development Finance Act), 5998 (Economic Development Corporation’s).

SB 1233 also passed, but did have some controversy.  The Department of Treasury opposed the bill because they said that it will be costly to the state School Aid Fund. They requested that state dollars be exempted.  The League opposed this for a number of reasons:

1.     This is a TIF and would not cut the State School Aid Fund.  It would create a new baseline in Brownfield TIF districts. New money resulting from new development would go into the TIF until it ends. The state will see the benefits of development and the School Aid Fund will receive the baseline payments until the TIF ends. But this will not be a cut.

2.     Treasury has supported actual cuts to the School Aid Fund due to new economic development laws in other legislation passed last week, including in the aerotropolis laws (renaissance zones, Smartzones, personal property tax, IFT’s, etc).

3.     The state must invest in new economy tools like TOD. This will attract people to the state. They can’t limit state investments to old economy uses. The local can’t be the only ones investing in important assets to draw talent to Michigan.

4.     The state can choose which projects it actually wants to invest in, because Treasury and MEDC must approve state dollars.

5.     This creates two different classes of Brownfields – one that has state investments and one that doesn’t.

6.     The only other times this has been done in law has been for specific targeted reasons (i.e. Brownfield acquisitions – see HB 5566).

An amendment to exclude state dollars was considered and failed. The League now calls on Governor Granholm to sign SB 1233 and have all the bills in this important package become law.

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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