GRAND RAPIDS — For the third time in the last three months, and for at least the fifth time in a little more than a year, county commissioners decided not to participate in a new or expanding tax-increment financing authority.
Commissioners agreed last week to “opt out” of the Downtown Development Authority expansion the village of Kent City is likely to ratify later this spring. The decision means the Kent City DDA won’t be able to capture a portion of the county’s property-tax revenue in the expanded areas that comes from physical improvements and the higher tax assessments made in those areas.
County Administrator and Controller Daryl Delabbio said the county hopes to enter into a separate revenue-sharing agreement with the Kent City DDA. If so, the contract is likely to be similar to those the county reached in December with Plainfield and Grand Rapids townships for the new Plainfield Avenue Corridor Improvement District.
Those agreements are for 10 years, both have a 10-year option, and they exclude the senior services and corrections millages from capture. The county opted out of the Plainfield corridor a year ago in March.
The county took the same action regarding the expansion of the Grand Rapids DDA in January and the creation of the new Division Avenue CID in Gaines and Byron townships in February. The county also opted out of the Byron Center DDA expansion in February 2007.
The actions commissioners have taken with TIFAs are chiefly the result of the economic development participation policy they approved last May. Commissioners created the policy because they felt guidelines were needed to deal with the new and expanding authorities and because they felt the county was getting precariously close to losing too much property tax revenue to such tax-capturing entities.
The county reported that $6.75 million of its tax levy was captured or abated by cities and townships in 2006, or 5.89 percent of the total tax roll for its general operating budget. The policy sets a 7 percent capture limit as a total of revenue to its operating budget and restricts a city or township’s capture to 10 percent of the total taxable value in that district. At least six districts exceed the 10 percent limit.
Nearly $450 million of the taxable value was captured in 2006 by 13 cities and townships in the county, and another $810 million of the taxable value was abated by 20 governments that year. The county is likely to receive the 2007 capture and abatement figures in April.
County Fiscal Services Director Robert White told commissioners last year that, at the current pace, it would take about seven years for the capture and abatement of county revenue to hit the 7 percent mark.
The Kent City DDA plans to add 16 properties to its district that revolves around Main Street and Muskegon Avenue, and also extend the authority’s life by 15 years to 2037.