What are "tax captures"? (long version)
There are also informational documents about tax captures available at https://detroitpubliclibrary.org/about/commission.
Special Report: Detroit Public Library Tax Captures Information
On Tuesday, March 23, 2021, the Detroit Public Library Commission convened a special meeting to discuss "Taxing Increment Financing (TIF) and Its Impact on the Detroit Public Library Through Tax Captures."
What are we talking about? In 2014, the citizens of Detroit voted to approve a millage for the Detroit Public Library for a period of 10 years (2015 - 2025) for an additional 3.9943 mills (combined with the .63 mill in perpetuity). This millage on taxable property (paid through property taxes) accounts for 89% of the Library's revenue.
What are tax captures? The City of Detroit is allowed to “capture” portions of the millage revenues to use for economic development projects. One example is the Downtown Development Authority (DDA), which is able to capture the additional property taxes collected through increases in the assessed taxable value of properties in its district. So as properties are improved, their taxable value increases, and then the property pays more taxes. Much like a house--if improvements are made or an addition built--that house is assessed at a higher value and its property taxes increase. The Library is only able to receive property tax funds from the original taxable value, while the city and DDA can "capture" the extra property taxes that are generated.
How does this affect the library? Within the 2014 Millage Proposal approved by the citizens of Detroit, it stated that of the revenue collected for the Library from the millage "5% may be captured by the tax increment authorities under the Detroit Economic Growth Corporation, as required by state law." Since the 2015 fiscal year, $167,011,122 in property taxes has been collected on behalf of the Library. During this time, a total of $12,487,250, or slightly more than 7% of the property taxes has been captured by the Detroit Development Authority and used for economic development projects during this period.
What does this mean for the future? Budgets for the Library for fiscal years of 2022-2023 estimate revenues to be collected on behalf of the Detroit Public Library at $57,672,621. Of these revenues, it’s estimated that a total of $6,705,140 will be captured and used for existing economic development plans. This amount is slightly less than 12% of property tax revenues to be captured and will be diverted from library operations. There are numerous and critical capital expenditures the Library needs to make for the improvement of Main Library and Branches. As these tax captures continue to increase above the voter approved 5%, there is less revenue to fund library operations and the ability to plan for the future.
Special Report: Detroit Public Library Tax Captures Information
On Tuesday, March 23, 2021, the Detroit Public Library Commission convened a special meeting to discuss "Taxing Increment Financing (TIF) and Its Impact on the Detroit Public Library Through Tax Captures."
What are we talking about? In 2014, the citizens of Detroit voted to approve a millage for the Detroit Public Library for a period of 10 years (2015 - 2025) for an additional 3.9943 mills (combined with the .63 mill in perpetuity). This millage on taxable property (paid through property taxes) accounts for 89% of the Library's revenue.
What are tax captures? The City of Detroit is allowed to “capture” portions of the millage revenues to use for economic development projects. One example is the Downtown Development Authority (DDA), which is able to capture the additional property taxes collected through increases in the assessed taxable value of properties in its district. So as properties are improved, their taxable value increases, and then the property pays more taxes. Much like a house--if improvements are made or an addition built--that house is assessed at a higher value and its property taxes increase. The Library is only able to receive property tax funds from the original taxable value, while the city and DDA can "capture" the extra property taxes that are generated.
How does this affect the library? Within the 2014 Millage Proposal approved by the citizens of Detroit, it stated that of the revenue collected for the Library from the millage "5% may be captured by the tax increment authorities under the Detroit Economic Growth Corporation, as required by state law." Since the 2015 fiscal year, $167,011,122 in property taxes has been collected on behalf of the Library. During this time, a total of $12,487,250, or slightly more than 7% of the property taxes has been captured by the Detroit Development Authority and used for economic development projects during this period.
What does this mean for the future? Budgets for the Library for fiscal years of 2022-2023 estimate revenues to be collected on behalf of the Detroit Public Library at $57,672,621. Of these revenues, it’s estimated that a total of $6,705,140 will be captured and used for existing economic development plans. This amount is slightly less than 12% of property tax revenues to be captured and will be diverted from library operations. There are numerous and critical capital expenditures the Library needs to make for the improvement of Main Library and Branches. As these tax captures continue to increase above the voter approved 5%, there is less revenue to fund library operations and the ability to plan for the future.
For more information, visit our website to view the financial documents shared at the meeting, learn about the Library Commission and Commissioners, and find dates for upcoming meetings: https://detroitpubliclibrary.org/about/commission
