Union Township officials look to close doors on two downtown development authorities

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Two downtown development authorities could close doors in Union Township by next month as part of a money-saving effort.

Debate stemmed from the method of funding for DDAs — capturing taxes. Some local groups disagree with the funds allocated by Union Township to the East and West DDAs because other programs are stripped for financing.

DDAs are funded with a percentage of tax increases in areas where the DDA operates. Several groups would otherwise receive those tax dollars. Among them are the Commission on Aging, Isabella County Transportation Commission, Chippewa River District Library and Mount Pleasant Public Schools.

Several people voiced their dissent to keeping the DDAs at Wednesday’s township board meeting.

“This DDA capture is a burden,” said Tom Delia, Chippewa River District Library board president.

More than $4.4 million was captured from 2004 through 2008.

The DDAs were established in 1985 to increase the area’s tax base, township Supervisor John Barker said, and most communities close DDAs after this goal is accomplished.

Stay or go?

The township plans to make a decision by March on whether to discontinue the authorities, but officials are still in the process of gathering information.

Mount Pleasant Public Schools has been one of the areas hardest hit with the money now going to the DDAs. The school district is beginning to make cuts that will affect class work of the students, Superintendent Joe Pius said Wednesday, noting the state could cut another $255 per student.

“Right now, we are looking at cutting almost 3 million out of our budget,” he said. “We are looking at changes at the top and all the way through the entire program.”

But Jim Zalud, treasurer of the West DDA, believes the authorities should stay intact.

“The only taxes we capture are for the increase of growth in our area,” he said. “When these things were conceived years ago, there was some fairness.”

The DDAs were forced to downsize by hard economic times in the mid-90’s and have already cut most of the fluff from their organizations, said Mike Brehm, East DDA chairman.

“We’re a very efficient organization, we’re all volunteers, we’re all unpaid,” he said. “Ninety-six cents of every dollar that we bring in is used for projects, how do you get more efficient than that?”

No matter the decision, the township will still have to pay off the bonds of the West DDA, Barker said, and each group — the Commission on Aging, ICTC and others — would likely still have part of their taxes captured to help pay that off.

“If we reduce our tax capture, we still have commitments to meet,” he said.