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Rural Libraries and Legal Issues. An overview that focuses on district library formation, tax capture issues and ballot language for millage elections. Our Story. Two millage failures: August 2006 and November 2006

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rural libraries and legal issues

Rural Libraries and Legal Issues

An overview that focuses on district library formation, taxcapture issues and ballot language for millage elections

our story
Our Story
  • Two millage failures: August 2006 and November 2006
  • What did we learn? There was an overwhelming sense was that we were “giving library money away” to the DDAs. Many people did not understand DDA captures or how they impacted their library (or other special voted millages.
  • One more try: We went to the voters again in August 2007. The millage passed overwhelmingly. Why?
    • We demonstrated to the community what things would be like with less library services through hours, services & staff reductions
    • We went to our DDAs and asked each to waive capture so that our ballot language was simply about the library.
what is tax capture
What is Tax Capture?

A tax capture plan (also called tax increment financing) is a government financing program that contributes to economic growth and development by dedicating a portion of the increase in the tax base resulting from economic growth and development to facilities, structures, or improvements within a development area thereby facilitating economic growth and development.

These programs allow municipalities to create separate taxing authorities within their community. Existing taxing entities (such as libraries with a separate voted millage) continue to receive taxes on the original value of the property in the taxing district but all new tax growth is captured by the authority and used for development in the taxing authority area.


the plain truth
The plain truth

Downtown Development Authorities (DDAs) and other authorities have been in existence since the mid 1970s. The legislation that created DDAs gives local municipalities a tool for improving the quality of downtown areas.

Sounds like a good thing, right?

These authorities are funded, in part, by capturing funds from special voted millages, like library millages or other voted millages. School district millages are often exempt from capture, and in some communities, library millages are exempt, too.

It is difficult to estimate how much library funding has been captured. One estimate, from 2000, stood at $9.4 million dollars, state-wide.

From 1996 to 2006, the Lapeer District Library lost $112,886.67 to tax capture.

why do we care
Why do we care?

MCL 211.24f – A law, effective in 2001:

Sec. 24f.

(1) If a taxing unit submits a proposal on the question of authorizing the issuance of bonds, imposing a new millage, or increasing or renewing an existing millage, except an ad valorem special assessment millage for police or fire protection under 1951 PA 33, MCL 41.801 to 41.813, the ballot shall fully disclose each local unit of government to which the revenue from that millage will be disbursed

we created a fact sheet
We created a fact sheet

We sent the fact sheet out to all of our municipalities, and highlighted it in our quarterly newsletter. Most people did not completely understand the captures.

The fact sheet caught the attention of one of our DDAs and started an important conversation.

what this meant for us
What this meant for us:

Legally, we had to include the disclosure in our ballot language. But the voters told us they didn’t like this.

This brought about the question?

What if we ask the DDA to not capture? Could we? Would they?

educating the ddas
Educating the DDAs

The Lapeer District Library serves 13 townships and the City of Lapeer. We have eight branches and one administration building. There are FIVE Downtown Development Authorities in our service area. Two of them do not capture any special voted millages. Three did. All five DDAs are in communities with library branches.

We went to each DDA and explained how the capture impacted the previous elections. We showed them the letters to the editor and shared the things we heard from the voters. Many wanted to support the library but did not want library dollars going to the DDA.

it worked
It Worked!

The first DDA we visited voted unanimously to waive capture. We sent out press releases and made the front page of the local newspaper.

The second and third DDAs initially voted not to waive, but after explaining the direct impact a losing election would have, not only on the entire library system, but particularly on the branches located in their communities, they agreed to waive capture.

what we did
What we did

Designed & approved ballot language without the tax capture language.

Our legal counsel advised leaving the capture language intact.

We got the waiver in writing from each DDA.

it really worked
It really worked!

On August 7, 2007, the voters in the Lapeer District Library’s service area overwhelmingly voted to approve our new millage. 71% of the votes were YES!

Very important:Not only did we pass the millage, we forged new working relationships with our DDAs and continued to educate the community about the importance of their library.

if you can t beat em
If you can’t beat ‘em

Join ‘em! Some DDA’s will not waive tax capture. Don’t despair.

Is your library within the DDA’s boundaries? If the boundaries don’t include your library and they are close, work to get the boundaries changed so that your library cantake advantage of the DDA’s programs and projects.

Don’t forget your city, township, village or county clerks, as well as your DDA or other authority members. Make sure they get your newsletter, e-mails, Tweets and other important information about your library.

useful resources
Useful Resources
  • Campaign Committee Do’s and Don’ts: Michigan Campaign Finance Act:
  • Michigan Townships Association’s publication, An Introduction to Township Millage Questions
  • Michigan Library Association’s publication, Position Paper on Tax Abatement and Tax Capture Plans -
  • General Property Tax Act (MCL 211.24(f)
  • MLA’s Legislative Committee is actively working to educate our Legislators about tax capture. MLA strives to hold ALL library millages harmless from capture.
feel free to contact me
Feel free to contact me

Kate A. Pohjola, DirectorLapeer District