How We Are Funded
TIF is derived from taxes generated by new building construction in the DDA District since 1982. This is not a special assessment; rather, these are tax revenues created by new development that are then directed into downtown purposes. The A2 DDA TIF is fairly unique among Michigan DDAs as it does not include tax increases created by property value escalation or by inflation. Thus, as the Ann Arbor DDA works to generate increased economic activity in the downtown, one of the important offshoot benefits is tax revenue growth through increased valuations of downtown real and personal property. The A2 DDA TIF capture is approximately 28% of the city taxes generated within the DDA District; the City capture is 72% of city taxes generated within this District.
In addition to TIF, parking revenues are the other major source of funds for DDA projects. The City is responsible for parking enforcement, but the DDA has operated the downtown parking structures and several lots since 1992, and in 2002 took responsibility for the remaining public parking system including the on-street meters. DDA parking revenues are used to operate the parking facilities, pay for repairs and maintenance, regular equipment upgrades, and debt service. The DDA also uses its parking revenues to fund alternative transportation programs that support the downtown including the go!pass, the Link, bike lockers, and the getDowntown program. In addition, a significant portion of DDA parking revenues are provided to the City to fund major & local street repairs and maintenance, as well as to the City's General Fund.