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Mayors beware County board has new fondness for DDAs
Yes, you read that right. Representatives of the Kent County Board of Commissioners believe they are entitled to a bit of cash dictates in regard to the Grand Rapids Downtown Development Authority.
Mayors of all Kent County cities take heed: Tax increment funding is always a hot topic for the county, whether they are capping it, taking it or attempting to otherwise pave the way for County Fiscal Services Director Bob White — the czar of county “Just Say No” to economic development policy.
Grand Rapids DDA set its budget for the coming fiscal year and voted to provide the city $500,000 — from its reserve fund — for specific services within its specific boundaries. This comes at a time when the city (and all Michigan governmental units) is seeing state revenue sharing whacked while city tax revenues are depleted, leaving Grand Rapids, for example, with a budget deficit of $2.4 million. The DDA is giving back to the city that helped provide its financial reserves by allowing abatements for economic development. The county, on the other hand, decided a few years ago, in its more short-sighted view, to cap its participation in various abatements — much to the countywide consternation of governmental unit leaders and economic development experts.
The county fiscal services director has been concerned that the number of individual DDAs throughout the county offering tax abatements for new economic development issues would severely hamper county budgeting if not capped. Those who are economic development experts, however, have repeatedly warned that many such projects will move to where the project developers can save money — even if for a limited, specific time period. Capping tax abatements regardless of the project leaves the county with no prospect of eventual tax capture as developers go elsewhere. The county, for example, picked a fight with Wyoming and Walker officials two years ago when Cabela’s was considering building in those jurisdictions.
The DDA last week targeted its reserve fund contribution to the city specifically for the fire, parks and police departments, which all play a role in the serious matter of maintaining the world’s window on West Michigan’s downtown, most eloquently represented by the JW Marriott.
County Commissioner Jim Talen, representing the city on the county board and the county on the city’s DDA, is adamant in proposing the Grand Rapids DDA be required to meet with county officials for a county spanking over the DDA’s decision to use the reserve fund for city services. Talen said the county board does not agree with the DDA’s decision and should give time for the county to be heard.
Despite the DDA’s use of reserve funds, Talen’s gumption is seeded in the DDA’s capture of property tax revenue within its boundaries, including the county’s share of the tax and two millages. His demand has so far been denied by the rest of the DDA board.
Over the past few years, the county board has taken an uncompromising hard line on money matters with municipal leaders within its boundaries, most recently in regard to its charges to specific communities for jail inmate housing.
The county’s actions have often regrettably been philosophically couched as the county versus cities. In fact, times like these require long-term thoughtfulness and a halt to individual philosophies that impede success and defy the expertise of economic professionals.
The Grand Rapids DDA is entirely within its rights to spend reserve funds as it believes to be necessary. The county whining is sickening.