Kent Likes Plan Allowing Ren Zone Action Input

April 28, 2008
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GRAND RAPIDS — Kent County will be keeping a close eye on the governor’s office to see if Gov. Jennifer Granholm signs House Bill 5600 into law.

If the governor does take that action, then county officials will get one of their legislative priorities filled.

The bill gives county governments throughout the state a say in whether a Renaissance Zone gets extended. Counties currently aren’t able to legally voice an opinion when a city or township extends the timeframe of an established zone, which exempts most local and state taxes including the real and personal property taxes that counties rely on to fund services.

“Counties should have a say in a decision that will directly impact the amount of tax revenues they can collect,” said State Sen. Mark Jansen, a Gaines Township Republican, in a statement.

“The language that I added to the bill puts county leaders at the table as we all work together toward successful economic growth. It is common sense that all parties affected should have their voices heard,” he added.

The amendment Jansen added gives counties the right to approve or deny the extension of a Renaissance Zone, which can last for up to 15 years. A full tax exemption can last for a dozen years and a graduated partial exemption is in place for the final three years. Several sites have received time extensions in the past few years. If a county denies an extension, a zoned property doesn’t get additional time in the zone.

Kent County Administrator and Controller Daryl Delabbio said county officials were pleased to learn that both chambers passed the legislation and sent it to the governor.

“We appreciate the efforts of Senator Jansen. It’s a good start. We have to have a seat at the table. Everyone should justify the decisions that are made, and this is going to help in that process,” he said.

Being able to deny a Ren Zone extension would be a first for counties and different from the power that counties have to opt out, or refuse to let their tax revenue to be captured, in certain tax-increment financing situations.

Counties can opt out of, but not deny, SmartZones, Corridor Improvement Districts, Historic Neighborhood Tax Increment Financing Authorities and property expansions of Downtown Development Authorities. Counties can’t opt out of other tax-altering economic development incentives such as brownfields and industrial abatements. Nor can counties opt out of DDAs when the board’s timelines are extended.

Kent County established an economic development participation policy a year ago and commissioners have stuck to it. They’ve opted out of the last five tax-increment financing entities that have come before them for county participation, but have encouraged these entities to enter into separate tax-sharing agreements with the county. So far, agreements have been made with Plainfield and Grand Rapids townships for the Plainfield Avenue CID.

“We’re certainly not going to give up on our quest. But we’re trying to be strategic about it. We’re trying to make it clear that we are not by any stretch of the imagination opposed to economic development. This is not about that. This is about being able to share in some of this, as well as justify what economic development is,” said Delabbio.

“This is a step. We’re certainly grateful to Sen. Jansen and others for their assistance on this.”

The county reported that $6.75 million of its tax levy was captured or abated by cities and townships in 2006, which is 5.89 percent of the total tax roll of its general operating budget — the account that covers most of the services the county provides. The policy the county established last year limits the general fund tax-levy loss to 7 percent and restricts a city’s or township’s capture to 10 percent of the taxable value in that district.

“County governments across the state have been losing tax revenue without having any say in the matter,” said Jansen. “I look forward to seeing the bill signed into law.”

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