Oakland County Policy Improves Its Review of Tax Incremental Financing Authorities.

Author:van Felt, Laurie

As the economy continues to improve, more communities within the State of Michigan are considering using tax increment financing (TIF) to improve distressed areas. As a result, Oakland County, Michigan, needed to fairly evaluate proposals and to protect its budget by establishing a limit on county revenue available for revitalizing distressed areas. Additionally, the county has advocated unsuccessfully for several years to change state law to sunset TIF districts that are able to capture revenue without an end date. As a result, the county created and implemented the Policy for Review and Potential Participation in Downtown Development Authorities (DDA), Corridor Improvement Authorities and Local Development Financing Authorities and Limitation on Tax Capture by all TIF Authorities.The policy gives the county the ability to exit some of the older TIF plans when a new district or new TIF plan is proposed by a community with an older plan in place.


The Oakland County policy addresses how the county will evaluate its potential participation in the DDA or TIF plan by providing objective criteria for consideration and a clear review process. Several types of entities are allowed to use tax increment financing in Michigan. The primary ones in use are DDA and Corridor Improvement Authorities (CIA); Local Development Financing Authorities (LDFAs) also exist. State law gives taxing jurisdictions that are subject to capture 60 days to opt out of participation in the creation of a DDA or the establishment of a TIF plan by a CIA. The 60-day period begins after a local unit of government holds a public hearing to adopt its plans.

Before Oakland County implemented its policy, the County Board of Commissioners had multiple resolutions addressing DDAs, CIAs, and LDFAs separately. None of the resolutions provided an overall limit to the county's participation in these plans. Before state law was changed in 1994, the county and other entities subject to capture did not have the right to opt out of these arrangements when they were established. The county would like to set an end date on the capture of county tax revenue for several TIF entities created before 1994.

The policy sets forth eight requirements that municipalities must meet if they are seeking county participation. Many of these requirements are to ensure that the plans are well thought out and that other sound economic principles are being used. For example, those seeking...

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