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Tax Increment Financing Development Erodes Library Millages

by aadl-news

If public libraries are to continue to exist beyond the first half of this century, we all need to make that decision and we need to make it right now. I’m not talking about an emotional decision that “libraries are good”, and “we all loved story time”, and “what’s not to like about libraries?”

I’m talking about money and civic priorities. Many libraries in Michigan and across the country will survive the current annihilation of public library funding by state and local politicians, but a good number of them will not. Those that do will still contend with eroding tax bases: sometimes the enemy appears friendly. The best example on the local level is Tax Increment Financing Authority, or TIFA, diversions on property taxes captured by local taxing authorities. District Library millages are eroded by these tax diversion structures and in a poor economy the use of TIFA diversions increase. Common TIFA authorities are Downtown Development Authorities, Brownfield Redevelopment Authorities, Historical Neighborhood Authorities, Corridor Improvement Authorities and several others in Michigan. Sometimes public library Boards can opt-out of a TIFA diversion, but most of the time opt-out is not permitted by statute. The long and short of it is this: When a community votes a millage into effect for their local library, TIFA diversions in that community take taxes off the top of the Library millage and that money does not go to the purpose it was originally voted to support. There is great good in Brownfield Redevelopment, and Downtown Development Authorities provide important infrastructure and economic development support for communities. The cost can be too high, though, for tax supported public institutions. Legislation providing TIFA opt-in or opt-out language needs to be adopted. Libraries can only use taxes for library purposes. Libraries have no other taxing options available to support themselves. Library Boards are responsible for providing certain services with voted millages, and expectations for those services do not decrease with the tax base.

The statewide public library funding picture in Michigan is bleak, and at the same time sadly telling in terms of legislative values. The talk is always righteous about education, life-long learning, and literacy, but even when the money was flowing into the state budget, cuts were being made to public library funding. Libraries have been cut disproportionately compared to all other areas of the state budget - 17% in 2009, 40% in 2010 – and no increases since 1998. Public libraries are asking for 7M this year in state money to protect statewide library services such as Michigan Electronic Databases ( available to all Michigan residents. When the State of MI closed walk-in unemployment offices and moved forms and processes online, where did unemployed persons without the money to pay for an internet connection go to file and to look for work? They went to the home of a friend or relative, or to a public library.

Public libraries in the United States have changed and flexed through a century. Those that are governed well and managed carefully will make it through this difficult time, but the individual community member needs to value them and be aware of what they represent in a community, and to know what they cost a community. Public libraries are not free, but access to them is equitable and the doors are open to all. If we neglect to fund them, or allow the voted public will to be diverted for some other purpose, we are taking away chances for thousands of persons trying to get ahead in Michigan and that is not friendly.


This essay first appeared earlier in July at Concentrate


I read the entire statement. What are you saying? What is your point? Are you saying we voted to fund libraries but the money is not going to libraries? Then where is it going and how can the spending authorites evade the law? Don't tell me you want more taxes to fund public programs. We spend too much already.

I'm nonplussed. When I was on the Library Board, we informally discussed opting out of the proposed Broadway Village tax increment financing plan. I think. Do I remember correctly? If so, then can't he Library opt out of *some* tax increment financing plans?


You remember correctly. The Library can opt-out of DDA's, for example, but not Brownfield Authorities. It depends on how the statute was written or has been amended.


I am saying that the public votes to fund libraries at a certain millage level and expects the library to provide services accordingly. TIF authorities divert some of that money to other purposes. These diversions do erode the will of the public and affect how well a library can provide expected services. The spending authorities are not evading the law. State statutes authorize these tax diversions. They are a legal mechanism to take authorized taxes for one purpose and use them for something else. District libraries such as AADL have elected boards and are authorized to levy a millage. The AADL is not part of any other governmental unit, and the Library Board is responsible for how the money for the library is collected and spent. The issue as we see it is that library Boards do not have opt-out or opt-in on all of these TIF authorities and are subject to the votes of City Councils and County Commissions. It is important, also, to note that while these authorities are set up for limited periods of time, those periods of time usually range from 10 to 30 years. That is not insignificant and gives new meaning to "limited". I am not asking for more taxes, I am saying that libraries do not get all that you and others intended that we should receive when you voted to fund the Library. I am also saying that Library Boards should have the authority to decide whether or not library funds are better spent by the library or by a TIF authority.

If you have questions or concerns about how the money is spent once it is collected by the Library, I am happy to hear you out and talk to you about why we make the decisions we make. My email is and my phone is 327.4263.

But, what can we as cardholders do to make sure the libraries get the money they need and not have it go to other programs? If as you say (and I have no reason to doubt you), they are within the law in diverting funds, what can the average person do to stop them? They have boards and whatnot and we don't really have a say in how the money is spent.


You do have a say. You can let your state legislator know that tax diversions redirecting funds away from the will of the voter is not something you support and that you believe that Library Boards should have an opt-out or opt-in on these diversions. Sometimes these proposals really are in the best interest of the entire community, and will be a positive force for the long term. A Board may choose to support them, but it should be a choice.

You can also ask your city council member or county commissioner when a tax diversion vote is upcoming how they can justify diverting taxes away from the public library, community college, WISD or public schools? Job creation is the new catch phrase, but it is difficult to justify taking money from public institutions that are laying off, freezing salaries, and generally downsizing in the name of job creation for the private sector.

While I'm at it, I'll add that economic development is not exclusively a private sector outcome. I doubt anyone in Washtenaw County questions how much a great public school system or outstanding public library system adds to the economic development potential of a community.

Thanks for asking, and I hope that you follow up with your elected officials.


New taxes just penalize the people in Ann Arbor who own property. I go to the Northwood Branch and the place is full of students who are living in U of M housing and neither they nor their landlord are contributing anything to the library but there they are using the facilty and its' resources. Why don't you change the whole process and finance the system with membership cards that people can buy yearly?


I believe you mean the Traverwood Branch. I don't know where all of the people using the library branches reside, and while some do live on campus, many do not, and they or their landlords are paying taxes that support the library. Membership would cost much more per person to fund a system such as the AADL and is not a viable solution.

I am not proposing NEW taxes. I am simply saying that taxes that should come to libraries are diverted by TIFA, and that Library Boards should have a vote to opt-in or to opt--out of these diversions.

I'm very glad that you use the library.


Josie, this is an interesting post, but, like some of the others, I was a bit puzzled as to what the "takeaway" should be. It sounds as if you are saying that our state legislators need to hear that we want library funding to be protected. Correct me off-line if I am wrong, but I have the impression that our local state legislators are pretty good supporters of the library system, in which case the implication is that we need to influence legislators in other parts of the state. That's not going to be easy for those of us living here in Ann Arbor!

Mr. Zimmerman,

Only the legislature can amend the statute regulating TIFA, and that is where the change allowing library boards to vote to opt-in or opt-out of these diversions will or won't happen. In addition, it is at the legislative level that these authorities are created. Yes, our local legislative group generally supports libraries, and I know that most of them certainly do at the local level in their communities. However, they work on committees with legislators from all around the state and they need constituent feedback and support to oppose the development of new TIF authorities.

My point in the post is that it cost more and more to run a good library, too. It is not the time to be diverting funds from libraries. It is being done in the name of economic development and job creation, and that is working right now because everyone is afraid.

Thanks for the comment, and you can reach me directly anytime at or 327.4263.



I suppose you are being careful with your choice of words for political reasons, but the end result is a lack of clarity. You've corrected that in subsequent posts.

I agree that TIFs steal taxes legally designated for the use of properly elected bodies, such as park districts and library boards. In Michigan's broken political environment, one expects no less. There is no spine in Lansing to declare that, for the level of services we require to function as a modern state, we are undertaxed. And more specifically, the reliance on property taxes and constitutional imposition of a flat state income tax is regressive.Tax reform, including the end of TIFs, is what we need, not a simple reduction in taxes. The problem is that the some people carry less than their fair share of the burden.

I'm shocked that anyone with the time and interest to log onto a public library site and leave a comment would insist that libraries be funded by membership card. That is contrary to the whole point of a public library. All brave libertarians should avoid them and buy their own books, or move out of the taxing district. There's plenty of rolling hills across our fair state unburdened by library districts.

Alan Benard

Mr. Benard,

It is not so much being careful politically, as it is likely trying to say too much in a short essay. I wouldn't say "steal" because it is not literally theft. It is a diversion used by governmental units to fund something with taxes voted to fund something else using mechanisms made legal by the legislature. The public library may see financial benefit somewhere down the line, but not for a decade or longer. My title is likely misleading, too. It is less descriptive of my essay, than it is a reaction to recent decisions made by the Ann Arbor City Council, and action pending before the Washtenaw County Commission to award Brownfield status to a local business.

I haven't heard anyone saying that change in the tax structure of Michigan is not needed, but the how and what of it is surely debated and will play out over time.

I apologize for the lack of clarity, but appreciate that people have cared enough to ask good questions and have stated their own opinions in a respectful and civil manner.




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