In 2002 the Board of Trustees created the Downtown Development Authority (DDA) to improve the Whitmore Lake business district. The other reasons it was created are outlined on pages 6-7 of this document, a document created a year later to define the DDA's Tax Increment Financing authority. You can read the document online at the above link or download a copy from the township website here.
The DDA is an unelected body, a special interest group unaccountable to the taxpayers from whom, by the DDA's own optimistic spreadsheet projections (p.18, pp.23-30), it would eventually have captured and spent $58 million in tax receipts.
"Scholars often explain the rise of tax increment financing (TIF) as a natural progression toward localized revenue sources born of devolution, increased interlocal competition for business investment, and fiscal constraint. Although such factors provide important context, our genealogy of TIF in the state of Illinois reveals that critical actors—private real estate consultants—actively promoted the adoption and subsequent promotion of TIF as an economic development tool. Through interviews and a review of primary documents, we uncover a network of private consultants who had prior experience shepherding federal urban renewal dollars to cities and who later mobilized concerns around the 1970s deindustrialization crisis to steer the use of property tax incentives from job creation/retention to real estate development."
by Rachel Weber and Sara O'Neill-Kohl, Department of Urban Planning and Policy, University of Illinois at Chicago
"If normal infrastructure bonds were issued outside of a TIF district, they would generally have to be approved by a taxpayer vote, and receive 60 percent or more support. The property taxes of all citizens would be increased to pay for the bonds. Following development, the increased property taxes from the new appraisals would be divided among all taxing authorities, as normal
However, as Americans have learned over the past five years – all financial decisions, even magical things, involve risk. Not every project or idea is a success just because one wants it to be. There is no free money.
The potential moral hazard of TIF is becoming apparent. Many people, both taxpaying citizens and elected officeholders, are asking questions about TIF benefits. In many ways the questions reflect the local impact of negative bailout and crony capitalism decisions at the national level."
The source of this study has vanished from the earth.
Policy Study, Deborah Thornton, Public Interest Institute, 2012
The link is dead. It was:
http://scholar.googleusercontent.com/scholar?q=cache:xGvZpA8GvKQJ:scholar.google.com/&hl=en&as_sdt=80000005&sciodt=0,23
"School taxes captured by tifas are funded by every single school in the state. Public education dollars are skimmed off to fund economic development to the tune of tens of million of dollars annually. If AA loses $1 million to the LDFA and Lansing makes it up, that’s $1 million lost that would have been otherwise available for school spending somewhere, whether AA, Bridgman, Detour or Ontonagon.
While the state says they hold the local schools harmless, the reality is that the pot of money to provide public education is smaller because of it. That’s the dirty little secret of tifas."
- Mary Eastcreek, The Ann Arbor Chronicle, June 25, 2014
Page 1 of 2
