Opinion | Detroit tax breaks need to help neighbors, not just business empires

Robert Ficano is the former Wayne County Executive and Sheriff. He is now teaches at Wayne County Community College.

One doesn’t have to walk around Detroit long, both in downtown and in the neighborhoods, to see that there is a perception of two cities.

Real or not, longtime residents feel left behind and believe the new “D” does not include the neighborhoods.  While many people deny neighborhoods are in fact left behind, that is in fact the belief of many Detroiters. Demolishing houses and creating empty lots, although a very good start, does not constitute a revitalized neighborhood nor will it be a catalyst for safe streets and schools.

Candidates for governor in this year’s campaign should realize new policies are needed to help revitalize neighborhoods in Detroit and other cities.

Historically, tax breaks have been given to big businesses and developers to expand and build empires. That model was and continues to be successful in “popular” sections of Detroit.

But why are we not giving the same tax breaks to the local businesses and startups inside the neighborhoods?  

When a small business takes a risk, they are putting their life savings on the line.  When big business takes a risk, they simply move on to the next project. No one loses their jobs or their life savings.

Instead, candidates should consider a “people’s tax break.” The concept would work like this: If a small business wants to open new in a neighborhood, a land bank (city, county or state) would waive the property taxes for the first few years to provide the new business an opportunity to stabilize and survive.

This concept also works for existing businesses that want to expand in the neighborhoods. If a business expands and/or improves its property, the improved portion of the assessed value that naturally causes an increase can be waived by the land bank for a set number of years depending on the size of the improvement.

The land bank can work with levels of government to waive all property taxes or protect certain taxes such as ones designated for schools.  

The same concept could even apply for homeowners as well to improve or build new homes.

Does the city lose taxes in this situation? Not really, because without the neighborhood development moving forward there would be no new taxes generated.

Besides, if the big players get the tax break for their projects, why not level the playing field?

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Comments

Doug Reed
Tue, 07/17/2018 - 9:24am

Please go away Bob.
The name Ficano = corrupt.

Disgruntled taxpayer
Tue, 07/17/2018 - 10:43am

This author seems very confused. Land banks do not possess the authority to waive property taxes. Land banks are not involved with assessment or taxation (either establishing millage rates or collecting). Land banks have an optional five-year, 50% property tax capture on parcels that they transfer out of their inventory. (1) This is a very small portion of parcels, statewide. (2) Even if the land bank were to waive its tax capture, the tax would still be collected and distributed to the relevant taxing authorities (state, county, city, township, village, school district, etc). The property owner pays the same in tax regardless.

What the author is suggesting requires massive legislative change, and is not well thought out in that it would be placing administrative control in the hands of an entity (land banks) with very little skin in the game. Land banks would be able to reduce the revenue stream of municipalities and school districts with presumably no consequences for the land bank. What the author is suggesting is akin to allowing grocers (or other retailers) to waive sales tax for certain customers of their choosing. "Hey, if your cashier believes the customer needs a financial break, go ahead and waive all applicable taxes. The taxing authorities won't mind." Really?

Dennis Neylon
Wed, 07/18/2018 - 4:41am

Instead of canceling property taxes, which is unfair to other property owners and to government bodies dependent on taxes, why not freeze the valuation of the property the day a construction permit is pulled and continue the freeze for five years from the day of final inspection. Give this break to every property owner who makes improvements. Local governments loose no revenue, while property owners get a break.