An article in the December Ann Arbor Observer also addresses this question and raises another one: whether increases in parking fees for revenue purposes (beyond the cost of providing the service) violates the tenets of the Bolt decision. That Michigan Supreme Court decision held that fees (not assessed valuation, as the mayor wrongly stated in that article) must not exceed the cost of providing services, else there is a violation of the Headlee amendment to the state constitution. According to that amendment, any increase in taxes must go to the voters before enactment, and a fee levied for more than the cost of service was deemed to be a tax.

Here is the way SEMCOG summarized it in a publication [link]:

“In the Bolt decision, the court established a three-part test for distinguishing a valid user fee from a tax:
• The fee must serve a regulatory purpose rather than a revenue raising purpose.
• A user fee must be proportionate to the necessary costs of the service.
• A user fee must be voluntary – users must be able to refuse or limit their use of the commodity or
service.”

It seems to me that some argument can be made that parking fees are voluntary and regulatory (the higher they are, the fewer parkers, and the DDA is proposing a differential rate). The middle question – proportionality – might be an issue when the city is pulling so much revenue out of the system.

I’m generally a supporter of the A2DDA (and of the concept of DDAs in general), and think they’ve done a lot of good work over the years. However, I think the idea of funneling TIF funds into the City’s general fund via the parking fund is wrong. Legal, but wrong. The City Council has spent years holding a gun to the DDA’s head (“give us what we want, or we’ll disband you and take it anyways”); while the DDA Board has called the City’s bluff sometimes (pointing out that the City would inherit all of the DDA’s obligations, without the non-city TIF revenues to pay them – oops), this hasn’t happened often enough.

Why is this “wrong”? DDAs are enabled by PA 197 of 1975, “to provide a means for local units of government to eliminate property value deterioration and to promote economic growth in the communities served by those local units of government” – at the time, the problem at hand was declining downtowns and near-downtown neighborhoods. Under the Act, DDAs are empowered to use TIF, but must prepare a Development Plan outlining the activities to be funded by the TIF revenues.

To handwave the history a bit, downtowns were being shortshrifted at various levels of government – while important economic engines of cities, the tax revenues they generated were going to fund outlying development via utility construction, school construction, library construction, etc around the periphery. A DDA’s TIF power arrests this trend, ensuring that at least some portion of the tax revenues generated by new downtown development be used to service the downtown’s needs – as well as providing a mechanism for spurring that development.

The Development Plan lays out the case for TIF: we assert that we need to use some tax revenues – from all local taxing entities – in the downtown area, and here are the needs that we plan to serve with them. The TIF is not intended to be, nor should it be treated as, merely an available pool of money for the municipality.

As an out-county taxpayer, I completely support the A2DDA’s use of TIF (including various County-level taxes) to strengthen Ann Arbor’s downtown. Downtown Ann Arbor is the heart of the region that I’m a part of, and provides many people’s first impression of the area. The various complete streets, streetscaping, utility, and similar projects that the DDA has undertaken support this role by making downtown functional and attractive. I also agree with the DDA’s assertion that sometimes projects that best support & enhance the downtown will be located somewhat outside of the DDA’s boundaries, in the adjacent neighborhoods or along the transportation corridors leading into downtown.

But I have to draw the line at the DDA using TIF to capture County tax revenues and transfer them to the City’s general fund: it’s beyond a stretch to convince me that keeping the streetlights on in the north side neighborhoods, or police response time to Briarwood quick, is vital to the enhancement of downtown Ann Arbor. At this point, the TIF becomes a tool of the City to raise revenues by using other units’ dollars, rather than by raising their own taxes. If there aren’t downtown needs to be filled, then perhaps the TIF should be ended once the current obligations are paid for, or reduced to the amount necessary to address downtown’s needs.

But, as I said, I think this is – in a very thin veneer – legal. After all, the TIF dollars are not per se going into the city’s general operating fund. They are going to the costs of constructing and maintaining a downtown transportation system, which any business owner or landlord will tell you, very loudly and at great length, is absolutely critical to downtown’s wellbeing. (I say “transportation system” because parking is clearly only one piece of it – bicycle and pedestrian improvements, as well as transit components like the go!pass, are part and parcel of the overall “getting people to downtown” system.)

But pulling the funds out the other end of the transportation fund, and claiming that transportation system operating revenues are distinguishable from the TIF dollars going in, makes this a very thin veneer indeed. We clearly have no good reason to push TIF dollars into the transportation system when it’s operating at a net surplus – a net surplus, that is, up until the cream and then some is skimmed off the top. More appropriate would be to maintain the transportation system dollars in-system, and, as I said, reduce the TIF capture accordingly.

I’m definitely sympathetic to the City’s funding situation – they are only one of thousands of local units across the State that are facing structural deficits as the culmination of 30 years of irresponsible anti-tax activism, with the recent collapse of the housing bubble merely the coup de grace. But all of the local units who might otherwise enjoy revenues captured by the TIF are similarly struggling, and it’s irresponsible for the City to stand on their neighbors’ shoulders to keep their own heads above water.

In order for the financial difficulties facing local government to be addressed, there need to be systemic changes made at the State level. If units like the City of Ann Arbor are maintaining their general fund at the expense of the AADL, the AATA, Washtenaw County, and others, it only feeds the fiction of mismanagement as the culprit. Unfortunately, our fragmentation of local government means that this self-preservation is the only course we could possibly expect the City Council to take – if they weren’t looking for every opportunity to game the system, they wouldn’t be doing their job.

This is tiresome…

“…I didn’t suggest any such comparisons, you did. I just thought you might need a pointier pencil. I also specifically said that I was not weighing in on the parking….”

I specifically did not. I specifically stated the exact opposite. Read the post I responded to. I stated, yet again, “…we shouldn’t compare it to Chicago, New York, LA, etc.” Your statement is not only wrong, it’s so wrong that it leaves me in disbelief over how it could be so wrong.

…. and then you state many things that neither deal with Downtown Ann Arbor, Chicago, or Parking…

My entire point is that Ann Arbor should not be compared to Chicago. Your point is… well, it’s so far from anything relevant that it’s moot. I truly care less what you feel for my credibility. To be honest, based on your recent comments, I would be happier the lower my credibility is with you.

I bid you good day.

SEMCOG, I got my numbers from SEMCOG.

“Please tell me why would we compare Ann Arbor parking to Chicago?” I didn’t suggest any such comparisons, you did. I just thought you might need a pointier pencil. I also specifically said that I was not weighing in on the parking.

My post was simply designed to address population areas, as many people equate the City of Ann Arbor with the Ann Arbor Metropolitan Statistical Area (MSA), which apparently is defined to be the county. The county, by the way, has a population of about 350,000 and is up 7.7% from 322,000 in 2000 (U.S. Census Bureau).

When population numbers are taken out of context they can lead you to think that ‘Ann Arbor’ hasn’t grown in decades because the population inside the strict city limits has not risen substantially, which is true. The city proper has hovered around 100,000 people since 1970. Ahhh, but the surrounding townships doubled (adding more than 50,000) from 1970 to 2000, and the county’s population was up 40% (adding more than 90,000) during the same time frame (SEMCOG).

And let’s discuss those strict city limits. Do you know that some businesses just south of The Produce Station, on State Street are not in the city, they are islands of Pittsfield Township. Do you know that a number of houses between Geddes and the river, on Huntington and Rock Creek and Riverview, are not in the city, they are islands of Ann Arbor Township. Their statistics are not attributed to the city but to the townships.

So, feel free to make all the assertions you want about parking and housing trends but your credulous belief that these statistics are supporting those assertions undermines your credibility.

I don’t know where you get your numbers… mine are from the US Census:

Population, percent change, April 1, 2000 to July 1, 2006: -1.0%

2000: 114,024
2006: 113,206
2009: 112,920

Now I did say Chicago Metro in my post, and you put the same number. Not sure why, but ok. We can list numbers till we’re blue in the face.

The entire state of Michigan is estimated at under 10 million. Please tell me why would we compare Ann Arbor parking to Chicago? Their metro area is bigger than the entire state of Michigan. Why compare it?

I disagree with your statement that the Ann Arbor area has growth, let alone 7%. Not only do I disagree, I find the belief incredulous. I’m also certain that anyone trying to sell a home finds the statement to be incorrect as well.

However if you really believe that the area is in a growth period….. I mean 7% is well beyond baby-boom growth rate. We better prepare for it! Maybe we can turn all the businesses that are closing into more parking.

Let’s keep this apples-to-apples and get our terms and numbers straight.

Chicago city – about 3 mil.
Chicago metro – about 10 mil.

Detroit city – about 1 mil.
Detroit metro – about 4 mil.

Ann Arbor city – 114,024 in 2000, and 114,529 in 2008
Ann Arbor township – 4,385 in 2000, and 4,488 in 2008
Pittsfield township – 30,167 in 2000, and 35,355 in 2008
Scio township – 13,421 in 2000, and 16,430 in 2008
Ypsilanti township – 49,182 in 2000, and 53,663 in 2008

You will notice that all of the townships surrounding the city are up in population, even the city is up a little. This data shows a 7% growth during a difficult time frame. Go back further and you will find the growth rates were higher. The county’s population is also up.

Much like a bomb blast, populations are messy things. They tend not to stay within the lines.

I am not wading in on what to do about the parking but you said, “… falling was the key”. As best we know the population is not falling. It may not be growing as fast as it had been, but falling? No.

Selling assets and getting a big hunk of change could be very crucial compared to expecting income from an area that’s both losing business and population.