Tax Capture Causes Skirmish

November 22, 2006
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GRAND RAPIDS — County commissioners recently allocated $6.1 million for the coming year to provide care for the county’s senior citizens.

The 2007 allocation was $1.3 million higher than last year’s, due to voters renewing and increasing the senior millage last August. But at least two county commissioners clearly thought the amount allocated should have been even higher.

Outgoing County Vice Chairman Dan Koorndyk, who was praised by the Kent County Senior Millage Review Committee for his dedicated work on behalf of seniors, criticized the handful of downtown development authorities in the county for capturing a portion of the millage instead of letting those tax dollars go to needy seniors.

“I think it’s disappointing and disgusting,” said Koorndyk.

But Commissioner Paul Mayhue, who represents the county on the Grand Rapids DDA, countered that the panel made a commitment in June to dedicate monies to a new office on South Division Avenue for Senior Neighbors, a nonprofit that offers a variety of services to seniors.

“We’re going to do as much as we can to help seniors,” said Mayhue.

Although the DDA didn’t reveal in June how much money it would commit, DDA Executive Director Jay Fowler said then the board would set aside more than the $128,000 the panel was asked to contribute to Senior Neighbors.

Fowler said the DDA could exceed that amount because the funds would be going to a brick-and-mortar project, a type of activity authorized under its state charter. But he added that the board needed to create a new policy before it could fund Senior Neighbors because the agency chose a site for its new office that is outside of the DDA boundary.

DDA counsel Dick Wendt told board members if they waived any tax-increment revenue, they would breach the agreement they have with holders of the Van Andel Arena bonds. He also said if they waived their portion of the senior millage, they would have to do the same for the school operations millage. The DDA pays the annual debt service for the arena.

“As you are aware, the DDA relies primarily on school-tax-increment revenues to pay debt service on the bonds. A proportional reduction of such school-tax-increment revenues would have an impact on the payment of debt service on the bonds,” he said in June, using the Downtown Development Authority Act of 1975 as the basis for his opinion.

Commissioner David Morren, though, said he would rather have the money go to seniors than to a brick-and-mortar project.

Commissioners allocated the funds to the Area Agency on Aging of Western Michigan, which will distribute the monies to dozens of agencies that provide essential services to seniors. Those services include meals, transportation, in-home chores and health-related needs.

Voters renewed the eight-year-old senior millage of 0.25 mills and raised it by 0.08 mills to a third of a mill in August.    

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