The school millage on the November ballot was, we were told, to fund operations, not to build (or repair) things. The school district proposes not to stop its “building” program (funded by separately-voted construction & repair millages that are not available for operations), but to lay off teachers, the ultimate purveyors of the intangible. The battle to spend public education funds is not between the intangible (economic development agencies) and the concrete (public school buildings), but whether we will spend public education dollars on the intangible of, well, public education, or the intangible of an economic development agency.

Some may suggest that “people” (but not your readers) are too conceptually challenged to understand that in life there exist many intangibles that are vital, and that intangibles “exist” that might be more important than particular physical structures. I know that you are not among the “some”.

The idea that it is OK to fund economic development agencies (not necessarily identical with actual economic development, by the way) by de-funding public education requires, I suggest, examination. The idea that we will fund economic development agencies by de-funding k-12 public education, and then claim that we need to pass new taxes to support k-12 public education, suggests that our current political class is not impressed with the savvy of the local populace.

There are those who suspect that in this day and age, an educated population -not an economic development agency – is the key to economic development, the single greatest economic development tool in anyone’s arsenal. Some wonder if diverting k-12 public education funds away from k-12 public education is but a way to eat our seed corn. Some even believe that diverting taxes voted for a specific use by a specific government unit, to an unrelated use by an unrelated government unit, without the approval of those who agreed to tax themselves in the first place, constitutes a breach of faith with voters and taxpayers, no matter how “legal” Solons in Lansing have made it.

The “somewhere else” that would get taxes captured by the DDA is the City of Ann Arbor, The Ann Arbor Transportation Authority, The Ann Arbor District Library, Washtenaw Community College, and The County of Washtenaw. It is possible that some people prefer the concrete of the city court building or a new underground parking garage to intangibles like police services, public health initiatives, or service to the homeless, but I would not want to have to support that position in a debate.

This state came to the collective decision to fund k-12 public education more equally per student across the entire state than had been done in the past. That is, po’ kids should have their educations funded at an amount closer to the funding of rich kids educations than has been the case in the past. Of necessity, this means that not ever dollar of state public education tax will come back to above-average-income school districts like ours. The “somewhere else” that will get the school dollars captured by the LDFA (besides Ann Arbor Public Schools, which would receive some of the otherwise-captured taxes) are k-12 districts with a lot less money than ours has. I, for one, think that widely-improved public education is our seed corn, and that the existence of an underclass (of any race) with no way out is the single greatest threat threat to our economic prosperity, and our national security.

The argument that it’s OK to divert school taxes to our LDFA because this way we get to keep more of them here for non- k-12 uses, instead of somewhere else for k-12 uses, is just a way of saying that it’s OK to de-fund k-12 education for kids in The Thumb, or the UP, or Benton Harbor, Detroit, Flint, (and Ann Arbor) etc. so that already highly-educated adults here don’t have to read up, or network, or ask volunteers like Stew Nelson, about how to run a business. Maybe this argument is offered sincerely – I hope so. Still, as much as I would prefer to be wrong, this argument seems at least consistent with a cynical defense of crony capitalism.

You bring up the debate about how well tax incentives truly work to make and keep local businesses – vs. other types of community investment. This relates directly to some of the points Michael Shuman makes (see the recent story on We Want to Change the World).

So I don’t think he was limiting his call for support to just one (funding) or the other (business plan and accounting support) — although, based on his remarks, I don’t think it’s fair to say that he was calling on the city government to actually provide the venture capital.

It was not surprising that Rapundalo took the opportunity to point out the similarity to what Schlansker called for and the activities that SPARK’s business accelerator is designed to support. But one rather large difference between SPARK’s activities and one of Schlansker’s ideas is that Schlansker seemed to be calling on the government itself (the energy commission) to help identify the specific products in need of design — thus involving a government entity at a fairly early stage. An interesting question is whether that kind of early-stage involvement could be arranged to allow the city government to have part ownership of patents that might be awarded.

And that gets to one of the challenges SPARK faces in convincing taxpayers that the investment of their property taxes in the business accelerator is giving an adequate return. Those property taxes are originally paid to support schools, and which would have otherwise been sent to the State of Michigan for partial redistribution back to Ann Arbor Public Schools, if they weren’t captured by the LDFA, which then funds SPARK’s business accelerator. If they’d gone to the schools, then if someone asks, “Where’d your tax money go?” then we’d point to some physical building like Bach Elementary and say, “Look at that collection of bricks-and-mortar right there — my taxes supported that.” And physical bricks and mortar are hard to pry loose from a community.

Many (probably not all) of the Downtown Development Authority’s projects also have this “bricks-and-mortar” permanence, e.g., ADA compliant sidewalk ramps at intersections, Fifth & Division streetscape improvements, alley improvements. Like the LDFA, the DDA is funded though capture of property taxes that would otherwise go someplace else. So while one might take the view that the DDA should not exist and that those taxes should go through the regular budget process — with downtown alleys competing for funding with repaving neighborhood side streets, for example — those projects have a bricks-and-mortar quality that allows someone to point to some tangible thing that we got for our property tax dollars. Maybe someone might wish we hadn’t bought that particular thing — but the identity of the thing we bought is not in dispute.

So when it comes time to ask, “What did the LDFA do with our property tax money?” the “thing we bought” is currently measured in jobs. One challenge is that there’ll be arguments about which jobs SPARK should receive credit for and which they shouldn’t — you don’t buy jobs the same way you buy sidewalk ramps. And even if SPARK can convince people that yes, these N jobs would not have otherwise existed were it not for the investment made with our tax dollars, the “thing we bought,” namely jobs, can still be pried loose from the community. And it’s more likely that someone will want to pry loose jobs than to pry loose concrete. As far as I know, nobody wants to pry up the sidewalk ramp at the corner of Fourth and Liberty and take it to North Carolina.

Did I read this correctly, does Spark take credit for creating over 7,000 jobs in three years? If true, this is an astounding figure – it seems like more jobs than a new auto factory would have added. Did Spark really create 7,000 jobs that would have not otherwise existed in Washtenaw County? What are some of the companies (say, 5 or six), and how many jobs did these companies create? How does Spark determine that the jobs would not have been created without its help?

Dave,

The engineer seemed to be asking about funding (e.g. Venture Capital) support, not, say, business plan and accounting support. Did I miss something? Please correct me if I did.

For the other material, in reporting “an additional .75 FTE of Phase II consultants, spread over two people” I relied on SPARK’s documentation that shows in addition to a new person to manage the incubator, there’s also .5 for a new person for Phase II consulting, plus an increase from .25 to .5 FTE for Phase II consulting for Scott Olson — for a total of .75 FTE increase in Phase II consulting.

In reporting

a few questions from councilmembers, including one from Sandi Smith (Ward 1) about how much of SPARK’s business accelerator is funded by the city of Ann Arbor. Simms clarified that the business accelerator is funded solely by the LDFA.

I relied on my notes — and have reviewed the video of the meeting which confirm their accuracy.

The notes/video demonstrate that Sandi Smith asked: “What percentage of SPARK’s funding comes from the city of Ann Arbor?” She did not ask, as you suggest, how much of the LDFA funding goes to SPARK. As Mayor Hieftje later drew out, the basis of the line of inquiry was really to determine the original source of the funds — namely, the LDFA is funded through tax increment financing, that is, tax capture.

Skip Simms answer was not “none,” as you suggest, but rather to state that the funding for the business accelerator comes from the LDFA — which is accurate as far as it went, but did not really respond to Smith’s question. Granted, “the city of Ann Arbor” is somewhat ambiguous — it could mean “the city of Ann Arbor general fund” as well as “Ann Arbor property taxes.” But if you understand the question as being about the general fund, then the most helpful answer is this: Ann Arbor SPARK has received a total of $125,000 over the last two years from the city of Ann Arbor general fund. And if you understand “the city of Ann Arbor” to mean Ann Arbor taxpayers, then the most helpful answer to give would have been: SPARK’s business accelerator is funded solely by Ann Arbor property taxes via tax increment financing administered by the LDFA.

Thanks. Elizabeth Parkinson, Ann Arbor SPARK

When I called 911 between 3:05 and 3:10 (I don’t know if mine was the 3:06 call mentioned) the flames were well above the roof line. That the fire occurred in the middle of the night seems to have been a greater factor in the response, simply due to the fact that most people in the neighborhood were sleeping, so the _calls_ were delayed. Please check your smoke detectors/batteries.

I’m not sure what to call it, but the council discussion on the Percent for Art program doesn’t seem to have been about art, in the sense that art isn’t typically created to serve the purpose of informing the public. I wonder if the AAPAC members have a different understanding.