Lansing Builds a 'Scaffolding for Plunder'

Historian James Coffield once described the British income tax system as “scaffolding for plunder.” Michigan has its own version — hordes of government tax-borrow-and-spend authorities like Downtown Development Authorities, Corridor Improvement Authorities and at least 10 others that get little public or media attention, have minimal accountability, and once created are almost impossible to dismantle.

A new bill introduced by Rep. Joseph Haveman, R-Holland, would create yet another version called “neighborhood enhancement districts,” with the power to impose higher property taxes (special assessments) to pay for a wide range of projects favored by local planners. The scheme is designed to “empower” locals to raise yet more money to enhance their area, but what it really enhances is local government taxes, spending and power.  No vote of the people would be required.

The bill would empower local planners to borrow and spend for faddish projects such as pavilions, amphitheaters, snow-melt systems and surveillance equipment, the razing of “nonconforming structures,” and yet more government recreational programs and facilities. Governments could also increase property taxes without a vote of the people to promote the area, and to provide broadband or other telecommunications services.

There is much wrong with this bill.

1. It gives local governments yet another tool for dunning taxpayers, and does so during a trying economic time.

2. Projects sold as enhancements necessarily diminish taxpayers: There are no free lunches, so ultimately this bill just transfers resources from the many to enhance a few.

3. The value of this spending is highly dubious. For example, government-run recreation facilities and amphitheaters are notorious money losers that almost always require ever larger taxpayer subsidies to maintain. Even if they did generate revenue, that would just be an argument for leaving it to the private sector.

4. In units with local prevailing wage laws, money may be wasted simply paying union scale wages for the construction projects and due to distortions that arise when government escapes its proper limits. For example, had not a state film subsidy program skewed local government incentives, the city of Allen Park would never have taken on massive debt for a film studio whose collapse has brought the city to the edge of bankruptcy and the appointment of an emergency manager.

In addition to Rep. Haveman, this proposal is cosponsored by Reps. Lyons, Price, MacGregor, Crawford, Heise, Yonker, Wayne Schmidt, Roy Schmidt, Haugh, Shaughnessy, Kowall, Foster, Dillon and Howze.