Cities and States are Closing Their DDAs

leech

Macrobdella decora

In Ann Arbor:

—The Downtown Development Authority (DDA) takes funding away from city and county services, parks, and libraries

—The unelected DDA board decides how over $26 million per year of taxes and parking revenues are spent on less than a half square mile area

—The DDA gives sorely needed tax dollars to already-wealthy developers

US cities and states, most notably California, are finding that DDAs do not increase local economic activity. Worse, DDAs strain local resources by siphoning off tax monies intended for city services, parks, and libraries.

Here’s why.

DDAs are funded through a procedure called TIF—Tax Increment Financing. TIF diverts Ann Arbor downtown property taxes to the DDA. What does the DDA do with these funds? Besides installing a glass elevator in a parking structure, ornaments, and streetscaping, many thousands of dollars in subsidies are given to developers.

Because a good portion of downtown taxes divert to the DDA, residential neighborhoods are disproportionately burdened with funding city services, including for the downtown. So much for the DDA contributing to the city’s general welfare.

—Some roads, parks, solid waste, and library millage taxes are diverted to the DDA; many voters are unaware of this. Specifically, the DDA skims taxes from the city, the county, AADL, WCC, AAATA. Neighborhoods are forced to pay a disproportionate share of these millages.

—The DDA does not support a green space atop the library parking structure because no taxes can be skimmed from a park. Their interest is solely in garnering tax revenues from residents in newly developed buildings.

—The DDA is not supportive of Historical Preservation downtown since they are only able to siphon taxes from newly developed buildings.

Why not just reform the DDA? DDAs, because of their structure, are exceedingly difficult to reform.

So what to do? Contact your city council representatives and encourage them to vote to dissolve the DDA. If city council votes to dissolve the DDA, its assets and diverted taxes return to the city. Downtown developers will then make decisions about how, when, and where to build based on economic feasibility. Without a DDA, our taxes will be used for the intended purposes and not on subsidies to wealthy developers.

Additional information:

Tax increment financing, or TIF, is a public financing method that is used as a subsidy for redevelopment … TIF subsidies are not appropriated directly from a city’s budget, but the city incurs loss through foregone tax revenue. (Wikipedia: Tax Increment Financing)

California: As the use of TIFs increases elsewhere, in California, where they were first conceived, in 2011 Governor Jerry Brown enacted legislation which led to elimination of California’s nearly 400 redevelopment agencies [RDAs] that implemented TIFs, in response to California’s Fiscal 2010 Emergency Proclamation, thereby stopping the diversion of property tax revenues from public funding. The RDAs are appealing this decision. (Wikipedia)

Further reading:

Ann Arbor DDA awards $390K grant to downtown hotel developer

Ann Arbor DDA violated state sunshine laws when giving director raises

Michigan tax-capturing authorities could rake in $1.2B a year but have little oversight

Ann Arbor DDA agrees to chip in $650K to help pay for streetscape improvements along South Main

An Expert on TIF

Ann Arbor DDA agrees to chip in $650K to help pay for streetscape improvements along South Main

Redevelopment: The Unknown Government

Email gormatthews@gmail.com to help disseminate this information in the community, door to door, or electronically.

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