Ann Arbor DDA says it stands to lose $700,000 under proposed city income tax

By Ryan J. Stanton Political Reporter

Posted on Wed, Sep 2, 2009 : 5:14 p.m.

The Ann Arbor Downtown Development Authority stands to lose out on nearly $700,000 in tax-increment financing revenues if a city income tax is enacted, the DDA's executive director says.

Although the proposed income tax is currently on hold, DDA Executive Director Susan Pollay presented the board today with statistics showing the potential impact of the tax on the DDA.

The report shows the DDA would lose out on nearly $700,000 in tax-increment financing revenues that it annually nets from the city's operating millage. If an income tax is passed, the operating millage would be eliminated per city charter.

Pollay said the DDA hasn't yet discussed how it would make up for that revenue loss or whether the city would cover it. The City Council recently tabled putting the income tax proposal on the November ballot, but has indicated it may put the issue before voters in February or May.

Mayor John Hieftje, a DDA board member, said today that he's never been a proponent of the city income tax idea. But he noted the Ann Arbor City Council could approve putting it on the ballot without his vote.

Hieftje said it most likely would come before voters in May, and it it passed, the tax would go into effect in 2011.

"So there's a lot of time to think about this," he said. "I don't want anybody to worry about the $700,000. It will be quite a ways down the road."

Ryan Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.