The current boundaries of the Downtown Development Authority. Inside this zone they capture all property tax revenue from increases in land value and reinvest it back into this bubble, without letting anything "trickle" back out to the rest of the city. This is known as "Tax Increment Financing," or TIF. So essentially the property tax rate paid by the most valuable parcels in the city has not gon
We first unveiled this information we FOIA'd on tax captures before City Council and members of the local press on September 5th, 2023. We gave printouts of the data to each Councilmember and reporter, and for 20 minutes explained in detail to them each feature of the data sheet, and what effects it had on taxpayers and our millage-funded institutions by listing what that stolen money could have paid for had it not been tax captured. Our aim was to show the shocking—and at its core, racist—ways tax captures affect Detroiters. Our demand was that City Council use its power to end this deeply unjust practice, by dissolving the tax capturing authorities of the DEGC, something which they have been empowered to do by state law.
We asked, "If the DDA's mission was to help revitalize downtown, and downtown has in fact been undeniably revitalized, do they still need to exist?" Do we still need tax captures? There is a provision in Section 125.4230 of PA 57 that says "An authority that has completed the purposes for which it was organized SHALL be dissolved by ordinance of the governing body." That's City Council by the way, and the word "shall" implies that it is mandatory. We told City Council of this provision, and asked them to do what it required, but Council President Mary Sheffield merely deflected, stating that in order to end tax captures we needed to change state law—even though we had just cited the state law as clearly naming City Council being the responsible party.
Section 125.4230 goes on to say, "The property and assets of the authority remaining after the satisfaction of the obligations of the authority belong to the municipality." In other words if City Council dissolved the DDA (or any other tax capturing authority), the bond debt of that authority would then become the City's debt. So the DDA keeps issuing new bonds, to dissuade Council from ever thinking about dissolving them. In April 2023, a spokesperson from the DDA told Axios that the authority's dissolution is "legally impractical" because it would need to satisfy all of its outstanding bond debt obligations, which extend to 2048." City Council could do something to stop the DDA from constantly issuing new bonds, especially since their mission of revitalizing downtown has been fulfilled, but they do not.
Despite this predictably lackluster response to our presentation, it was but a necessary first step in our mission to bring awareness to the general public of how we are being looted by tax captures, and to demonstrate the intransigence of City Council to do anything to stop the injustices that pay for corporate welfare even when the ball is absolutely in their court. It may also be worth noting here that the City Council President (Mary Sheffield) is also an ex-officio Director of the DEGC. Not only that, but Council is also empowered to approve (or deny) the DEGC's budget every year.
