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    2010 Senate Bill 1092, introduced by Senator Ron Jelinik (R) on January 27, 2010, and passed by the Senate on February 11 (25-12-1), aims to amend the Michigan Renaissance Zone Act to provide for a prorated formula for reducing state reimbursements to localities in a Renaissance Zone. A Renaissance Zone is essentially a "tax-free" area for any resident or business located within them. There are 89 such zones in the state, which are used to entice business and residential development to specific communities. Property taxes, state and local income taxes, single business taxes, personal property taxes, and others are all completely exempt in these zones. As a result, the local school districts, libraries, and community colleges lose operating revenue. To make up for this, the state has been reimbursing each of these entities for the entire amount of revenue they lose as a result of the Renaissance Zones.

    .
    This bill would change the way in which reimbursements are handled. Instead of basing the reimbursements on lost revenue, future reimbursements would be based on FY08-09 reimbursements. Further, the bill would allow that the reimbursements be prorated if in future years the Legislature appropriates less funds than are sufficient to cover the costs of reimbursements. Under this plan, the prorated formula would give the entities a reimbursement based on the percentage of funds received in the prior year's appropriation. To summarize, this bill changes the formula for Renaissance Zone reimbursements so that the Legislature could reduce reimbursement costs in the future to combat the State's deficit problem.

    The bill had 100% support from Republicans in the Senate, with only 2 Democrats voting for it, and 12 voting against it. As the bill heads now to the House, which is Democratically controlled, it will face an uphill political battle for passage. Because this bill leads to reduced reimbursement funding for these entities, Democrats will likely not be in favor of the bill. The original bill called for only reducing payments to public libraries, but a new bill was substituted so that it would affect all Renaissance Zone reimbursements. Obviously, community colleges, libraries, and school districts will be against this plan, and Democrats tend to support these institutions. Therefore, without some major alterations, or data showing that this measure is a necessity given the state's fiscal problems, this bill will likely not be passed in the House.

    http://www.michiganvotes.org/2010-SB-1092
    http://www.legislature.mi.gov/documents/2009-2010/billanalysis/Senate/pdf/2009-SFA-1092-F.pdf
    http://www.muskegon-mi.gov/departments/planning/renaissance-zone/
    http://www.mla.lib.mi.us/advocacy/policy

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    Michael Raley is a fourth year Sociology and Public Administration/Public Policy student at Michigan State University. He is especially interested in the public policy, politics, and sociology of urban space, as well as transportation systems and public transit. A native of the Grand Rapids area, Michael is currently an intern in the office of State Representative Roy Schmidt, who represents the west and northeast sides of the city. He also aspires to pursue a career in urban and regional planning, and hopes to attend graduate school for such a course of study.