Michigan Senator Ken Horn recently re-introduced a proposal (Senate Bill 393) that would strengthen transparency, reporting and accountability standards for tax increment finance districts across the state. DGRI manages two TIF districts - the Grand Rapids Downtown Development Authority and the Monroe North Tax Increment Finance Authority - and supports the proposed bill. Here is the testimony DGRI Chief Outcomes Officer Andy Guy shared with members of the Senate Economic Development Committee, who unanimously moved the proposal for full Senate consideration.
Members of the Senate Economic Development and International Investment Committee:
On behalf of City of Grand Rapids and Downtown Grand Rapids Inc (DGRI), I’m honored to submit this letter of support for SB 393. Over the past three years, the City, DGRI, Kent County and other partners have worked to elevate local, regional, and state conversations about optimizing tax increment finance (TIF) tools and recognizing the contributions that communities make to effect more prosperous futures for themselves. We’ve done this because when done well, we believe that TIF is a tool that can inherently organize communities around a shared set of economic and community development objectives.
The draft introduced by Senator Horn provides several important first steps in that optimization and alignment process. First, it introduces some significant upgrades to the transparency of how resources are used and where that accounting of investments can be found – such as on each entity’s website. This will help to assuage - if not relieve - substantial, pent-up frustrations on behalf of local units of government whom feel that TIF was done to them, rather than with them.
Second, it substantially increases the amount of reporting to be provided to the State of Michigan. These requirements will help the State to better quantify the full scale of TIF in Michigan, and where some standardization can occur – also assist in understanding how TIF revenues are being invested in local communities. This will invariably provide our lawmakers with better, more reliable information about what is and isn’t happening in TIF districts across the state.
Last, and perhaps most importantly, this draft includes measures to ensure the accountability of TIF entities to the purposes they were established and the newly elevated reporting standards. Sometimes it takes the threat of real penalties to help incentivize the good behavior you are seeking from hundreds of TIFs from across the State.
We appreciate the opportunity to provide this testimony and participate in the process. We recognize that this bill provides improvements to TIF management procedures, but that there may be more work to do in the future. We stand ready, willing, and able to assist this Committee and other lawmakers by providing the reliable insights of experienced practitioners – ultimately wanting to protect the integrity of the tools for the needs of this and future generations. We look forward to continuing to be a part of this good effort.