Michigan Land Use Institute

MLUI / Articles from 1995 to 2012 / Your Tax Dollars at Work

Your Tax Dollars at Work

March 1, 2000 | By Keith Schneider
Great Lakes Bulletin News Service

The following taxpayer-financed subsidies over the last 30 years paved the way for suburban sprawl in Garfield:
• Water and sewer construction grants and bond funds, $22 million.The U.S. Department of Housing and Urban Development; the state of Michigan; Peninsula, Elmwood, Acme, East Bay, and Garfield townships; and Traverse City financed the construction of a water and sewage treatment system that extended deep into the township. (see map on page 15). Taking advantage of the hookups were the developers of two malls, dozens of subdivisions, eight industrial parks, and scores of commercial buildings.
• Road construction grants, $14 million.The Michigan and U.S. transportation departments financed the construction of new and wider roads, which provided the skeletal framework for sprawling strip development.
• Industrial development grants and bonds, $2 million.Local and state economic development agencies financed new roads, utilities, and water and sewage hookups for the construction of industrial parks in Garfield far from the Traverse City center.
• IRS Section 1031 Real Estate Tax credit, at least $2 million annually.This lucrative federal tax break gives developers the opportunity to buy property of equal or greater value than what they are selling and avoid paying capital gains taxes. One effect of the tax credit has been to encourage developers to buy ever larger parcels of land to build bigger buildings, leading to more sprawl. --K.S.

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