LANSING – A plan proposed by State Representative Robert Dean (D-Grand Rapids) that will create good-paying jobs and investment in our communities by protecting funding for local economic development projects was signed into law today by Gov. Jennifer M. Granholm.
"Economic development projects create jobs now, beautify our communities and bring more visitors into our stores and restaurants," Dean said. "The tools that local communities use to get these development projects off the ground are necessary to getting our economy back on track. My plan will ensure that these tools are protected."
Dean's plan amends the Tax Increment Finance Authority (TIFA) Act, which is used by communities to fund redevelopment and improvement projects. In a TIFA district, a property is developed through selling bonds. As the property is developed, its value increases. Those increased property taxes are then used to pay back the initial bonds and debt.
Last year, the House passed the Michigan Business Tax (MBT), a comprehensive solution to replacing the Single Business Tax that rewards investment, protects Michigan-based companies, and safeguards funding for education, health care, and police and fire protection. However, the MBT exempted commercial and industrial personal property from a certain amount of school taxes, which has made it difficult for some communities to meet their TIFA obligations for ongoing economic development projects.
Dean's plan allows local governments to retain a certain amount of State Education Tax funds so that they have enough money to meet their TIFA obligations.
"This plan means stronger communities and stronger neighborhoods," Dean said. "Stronger communities and stronger neighborhoods mean more businesses will want to locate here. This plan will help get our state back on track."