A news service for the people of Michigan from the Mackinac Center for Public Policy

Legislature Split on Funding For Land Bank Authority

Senate wants to fund program; House wants to defund

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The Michigan House and Senate disagree about the state spending $1.7 million for operational purposes to the Fast Track Land Bank Authority. The Senate wants to send the money to the Land Bank Authority, but the House doesn’t.

This issue has arisen in regard to Senate Bill 608, a supplemental appropriations bill that makes approximately a quarter of a billion dollars in adjustments to the current fiscal year budget. The House passed version of Senate Bill 608 cut 20 initiatives and projects that would have been funded in the Senate's version — the $1.7 million for the Land Bank Authority was one of the cuts.

"It is a good sign that legislators are taking a closer look at land banking," said Audrey Spalding, director of education policy at the Mackinac Center for Public Policy and a national expert on land banks. "Michigan land banks have been receiving too much taxpayer money with too little accountability."

Land banks and how they operate in Michigan have increasingly become contentious topics. The Kent County Land Bank in the Grand Rapids area has been using a backdoor method of acquiring tax reverted properties in spite of the fact that under Michigan law potential market buyers are supposed to get the opportunity first.

Rep. Ken Yonker, R-Caledonia, is the sponsor of House Bill 4626, which is aimed at giving potential property buyers a means of contesting the sort of activities in which the Kent County Land Bank has been engaging.

"We are currently working with the administration and other legislators to find a solution that is acceptable to everyone," Rep. Yonker said. "The state created the ability for land banks to be formed. As private economic activity continues to grow, land banks will become less and less useful and the state needs to create an exit plan for land banks when they are clearly no longer necessary. Supplemental funds for land bank operations are not a priority for me. I believe supplemental funds should be used to address our crumbling roads."

Rep. Al Pscholka, R-Stevensville, is vice chair of the House Appropriations Subcommittee on Supplementals and has been named to the conference committee where the differences between the House and Senate versions of Senate Bill 608 will be hashed out.

"We need some kind of an understanding on what is the business model to get to self-sufficiency. That is why we pulled that out," Rep. Pscholka said, referring to the Land Bank Authority funding.

Both the Senate and the administration of Gov. Rick Snyder still favor sending the $1.7 million to the Fast Track Land Bank Authority.

In relative terms, the proposed $1.7 million appropriation for the Fast Track Land Bank Authority is a small line item among the quarter of a billion dollars in spending shifts and reallocations in Senate Bill 608. However, the fact that the House has made the appropriation a point of difference could signal that the Legislature may be reluctant to automatically provide funding for land banks.

Those representing the Senate and the House on the Senate Bill 608 conference committee were announced March 5. The three representing the Senate are: Senate Appropriations Committee Chair Sen. Roger Kahn, R-Saginaw; Sen. John Moolenaar, R-Midland; and Sen. Glenn Anderson, D-Westland. Those Representing the House are Rep. Pscholka; House Appropriations Committee Chair Rep. Joe Haveman, R- Holland; and Rep. Rashida Tlaib, D-Detroit.

Sen. Kahn did not respond to a request for comment.

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See also:

CapCon Land Bank Coverage

Lawmakers Movew Away From Giving Land Banks Special Privileges

Kent County Land Bank Is Not a Good Deal For Taxpayers

Land Banks Profit By Cutting In Front of People Wanting To Buy Homes

Kent County Land Bank Circumvents Market To Fund Operations

Proposed Bill Would Provide Accountability For Land Banks

Questions Raised About Land Bank Conflict of Interest

Land Banks: Subsidizing House For Government Workers

Land Bank Powers Abused, Costly to Taxpayers

County Block Private Citizens From Purchasing Home; Buys the Property Itself