For the past two legislative cycles, the Northern Michigan Chamber Alliance and our local downtown development partners have kept a close eye on proposed legislation that would make large changes to the state’s Downtown Development Authority (DDA) authorizing statutes.
After hearing that a long-debated draft would be introduced in the House in March, work on a formal version of that bill seemed to stall as the spring legislative session moved into summer recess.
The day before the legislature broke for summer recess, State Senator Ken Horn (R – Frankenmuth) introduced SBs 987-990 which also look at making changes to current DDA statutes.
We have heard from multiple insiders that the Senate looks to roll out its reforms in two phases: a phase one, which includes the bills recently introduced, that looks to tackle some consolidation and less controversial changes, and a phase two which would attempt some more controversial areas, presumably, many of the same controversial parts of the House bill.
The Chamber Alliance has been firm in our belief that DDAs are an important local development tool for northern Michigan and other rural communities around the state, and have communicated the following thoughts on the legislation:
This economic development tool has worked in the Alliance geography. Many northern Michigan communities have made the choice to use this tool and it is one of the most successful economic development and prosperity tools communities have at their disposal.
We fully support transparency and the establishment basic reporting requirements and processes. However, we also feel that any changes should take care that these measures and processes are not overly burdensome as many districts and authorities, especially in rural areas, have very few staff members with which to complete the requirements.
We are open to eliminating the requirement that downtown districts capture special millages. For example, this would include special millages that voters approve for specifically for veterans programs, road projects, and certain emergency services.
We could support the concept of a small gain sharing provision in lieu of what we view as some of the more damaging concepts such as additional opt-out provisions, arbitrary sunsets, and tax base resetting. We feel there are many provisions for these concepts already in the enabling law, and further restrictions would only harm the important and long-term work of cultivating downtowns.
Any definitions or provisions to limit the amount of time that captured revenue can be held, or establish a time frame for expending revenues should proceed with extreme caution. Many rural authorities have small tax bases which in turn means a longer period of time required to capture taxable value for projects. A limitation or process that is too strict or cumbersome will limit the size and scope of projects that rural communities can take part in.
The Alliance will continue to be vocal about defending this important economic development tool.