25LINKBUDGET(FULL) - Flipbook - Page 56
City of Plymouth 2024 / 2025 Budget
Tax Abatement and Tax Capture
Tax Abatements
The City of Plymouth has utilized various state laws designed to promote the development of
businesses and industries. Historically, the City has implemented up to four personal property
abatements involving two industrial establishments under Act 198 of 1974, as amended. These
abatements allow industries to expand their operations while paying taxes at a reduced rate,
effectively 50% of the normal levy rate. Abatements are applicable to both commercial and
industrial properties and can now be granted for periods not exceeding 12 years. Unlike laws
facilitating tax capture, abatements decrease the tax levies that would otherwise be collected
by the City, assuming the developments would have proceeded without the abatement.
Downtown Development Authority (DDA) Tax Capture
In addition to offering abatements, the City of Plymouth promotes property development and
re-development through the operations of the Downtown Development Authority (DDA) and
the Brownfield Re-Development Authority (BRA). DDA statutes allow for the redirection of a
portion of taxes that would typically go to each of the taxing authorities into the DDA to fulfill
the purposes outlined in their approved plan, endorsed by both the DDA Board and the City
Commission.
The DDA plan for the City of Plymouth primarily focuses on downtown parking needs and
beautification projects. Originally, the plan was formulated to address debt retirement
associated with the construction of the existing parking deck in 1982 and the sale of bonds for
the streetscape improvement project initiated in 1994. Later, in late 2006, the plan was
amended to offer more flexibility in fund utilization within the DDA and extend the term of the
tax capture until December 31, 2033.
The amount of tax revenue diverted to the DDA typically correlates with the increase in
taxable value of the DDA district since its inception. The taxable value of the district at its
outset is termed as the "base value," while the difference between the current taxable value
and the base value in any subsequent year is termed as the "captured value." DDA revenues
are determined by applying eligible millage rates of all taxing authorities to the captured
value.
With the implementation of Proposal “A” in 1994, local and intermediate school taxes were
exempted from the DDA’s tax capture, except in cases where prior contractual obligations
existed. Under this provision, the City could continue capturing school taxes until the existing
debt from the 1994 bond sale was settled during the 2008/09 fiscal year. Starting from the
2009/10 fiscal year, the DDA could no longer capture any school or intermediate school taxes
to fulfill the purposes of its plan. Additionally, in late 2016, Public Act 506 was enacted,
permitting libraries to exempt themselves from DDA tax capture. However, due to
outstanding public debt related to DDA projects, this ability is suspended until the debt
expires in 2024/25. The extension of the DDA's lifespan will facilitate the ongoing maintenance
of streetscape and other improvements within the DDA district, as well as support the
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