The proliferation of signs that have sprouted in front yards around town indicates one thing: it’s election season.

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The sunny yellow “Vote Yes! on City Proposal 1” and opposing neon green “NO on City Prop 1” signs hold particular significance for Traverse City residents as the city asks them to decide the fate of downtown’s primary funding source for public improvements over the past 30 years.

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The funding source, called TIF 97, or tax increment financing, comes from property tax revenue in a designated TIF district that is above a baseline amount established in 1997. It also diverts a percentage of tax revenue intended to fund NMC, BATA, Joint Recreation Authority, Veterans Affairs, Animal Control, Conservation District, Commission on Aging, and Grand Traverse County. As property values increase, so does TIF funding. TIF 97 currently captures $4.5 million annually from these sources.

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A Short History of City Proposal 1

Traverse City’s Proposal 1: Infrastructure First TIF Plan is a 2026 ballot measure to extend TIF 97 another 20 years. The city created the TIF district to capture a portion of property tax revenue for revitalization projects downtown after several businesses left for the new Grand Traverse Mall. Back then, city commissioners approved the plan without voter approval in accordance with Michigan Downtown Development Authority (DDA) laws.

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City officials had already established a TIF district in 1985 and knew how it could help transform an area. The Old Town TIF was created to redevelop the Traverse City Ironworks site, which is now the River's Edge condominium complex and Hagerty Insurance building. City commissioners renewed it until 2041.

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Over the past 30 years, the city, through the Traverse City DDA, used approximately $46 million of TIF 97 funds to improve the downtown core. Front Street was revitalized by installing new sidewalks and lighting, planting trees, updating the City Opera House, and constructing the parking structure. The DDA also used the funds to make Clinch Park improvements, extend and upgrade walkways and a pedestrian bridge. The remaining funds under the current plan are being used to develop Rotary Square and construct the Sarah Hardy Farmers Market pavilion.

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Changing the Constitution One Signature at a Time

Three years ago, while the DDA was anticipating the commission’s approval to extend TIF 97, a small group of residents started a grassroots movement intent on putting TIF decisions directly in the hands of voters.

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This small group of about 20 city residents formed TC Taxpayers for Justice and launched a petition drive to change the city charter—a legal document that acts as the local constitution—so that voters could decide on TIF rather than city officials.

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Petitioner Doug Dowdy recalled how getting enough signatures to put a citizen-initiated proposal on the ballot was a lot of work. He and fellow activists went door to door throughout the city to inform residents and obtain the required 661 valid signatures. “I walked the petition around, and I told people, look, vote any way you want. Let’s just get it on the ballot. Everybody deserves a chance to vote,” he said.

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The grassroots activists’ work did not stop there. After the city clerk verified signatures, city commissioners voted to put the charter amendment on the 2024 ballot, which would give citizens the right to vote on anything TIF-related. The amendment then traveled to the state attorney general and governor for a mandatory review process, where both rejected the proposal since it conflicted with the general law of the state.

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At the same time, Michigan law allows petitioner-initiated amendments to be submitted to voters regardless of the governor’s opinion. City Proposal 1 to amend the charter made it onto the November 2024 ballot and passed by a 56-44 percent margin.

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What’s at Stake

Rebranded as the Infrastructure First TIF Plan, the proposed financing tool pivots from revitalization to maintenance and improvements in the downtown core. Proposed projects include trail extensions, lakeshore stabilization, various street reconstructions, and a snowmelt system, according to the city’s website.

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The city also proposes to use the TIF funds for stormwater management, a Community Police Officer salary, trash cleanup, and beautification, according to I Love Traverse City, a political committee established to run an issue-advocacy campaign for the ballot proposal.

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A unique feature of the proposed TIF extension is the city’s offer to keep 70% of the projected $140 million captured tax revenue and return the remaining amount to the participating taxing jurisdictions. This means that NMC, BATA, Joint Recreation Authority, Veterans Affairs, Animal Control, Conservation District, Commission on Aging, and Grand Traverse County would be refunded 30% of their annual contributions.

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If voters reject the proposal, I Love Traverse City asserts that “The city would lose about $2 million a year in revenue currently captured through TIF 97, while becoming solely responsible for downtown maintenance costs—creating new competition for general fund dollars,” according to their website.

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Residents opposed to TIF 97 renewal claim various reasons. TC Taxpayers for Justice contends that TIF hogs resources for downtown, leaving “less money to pay for basic city services, like police, fire, streets and parks,” according to the grassroots organization website. Currently, $2.6 million of annual property tax revenue collected within the TIF 97 district goes toward TIF activities rather than remaining in the city’s General Fund for city-wide expenditures.

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Some residents do not like the idea of Forever TIFs and think that 30 years is enough. “I’m not against the DDA or development, just let it expire as planned and bring me some new ideas,” Traverse City resident Lisa Bolthouse told the White Pine Press.

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While Dowdy does not care how people vote, he is personally opposed to the list of projects in the proposed TIF extension. “I don’t need a pretty bridge in the TIF district. I’d love to see our water and sewer department get more money to fix infrastructure around the city instead,” he said.

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On September 16, the Grand Traverse County Board of Commissioners adopted a resolution asking Traverse City Commissioners to allow TIF 97 to conclude and reject the proposed Infrastructure First TIF Plan even if voters approve it.

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 “Maintaining the long-term fiscal stability of the County must be the priority, particularly during a time of much-needed capital improvements and increased service demands that support residents across the entire County,” stated county commissioners in the resolution. After the city’s proposed revenue-sharing, a projected $22 million of county tax revenue would be diverted to fund downtown Traverse City improvement projects if the TIF plan was extended.

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The resolution further states that county commissioners are committed to continuing good faith discussions with Traverse City about the future of downtown and are willing to support projects following the conclusion of TIF 97.

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TIF Across the Nation

TIF is not unique to Traverse City. Since its inception in 1952, American cities of all sizes use this public funding tool to subsidize redevelopment, spur economic growth, improve public infrastructure, or repay public debt. Arizona is the only state that does not allow local jurisdictions to create TIF districts.

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Municipalities can have multiple TIF districts as well. Traverse City currently has two. Chicago tops the list of municipalities with the most, which has 108 that currently divert $1.59 billion of annual property tax revenue for TIF activities. Chicago’s prominent use of TIFs is increasingly scrutinized. Findings from a University of Illinois Chicago Great Cities Institute report in 2026 revealed that the city’s TIF system has grown far beyond its original purpose of supporting economic development in areas of divestment, and that TIF benefits have been unevenly distributed. Over the past 40 years, “substantial property tax growth was directed into TIF funds rather than immediately supporting schools, libraries, parks, and other public services.”

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Direct voting on TIF by the public is unique to Traverse City. It is the only municipality in Michigan that successfully amended its charter to have TIF decisions put on the ballot. Michigan law still requires only that a municipal governing body have a majority vote after a public hearing to approve proposed TIF actions.

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Dowdy credits the grassroots activism of TC Taxpayers for Justice for the charter amendment. “The only voice we have in our country is our ballot box and our voting rights. When voting rights are affected, so too is our democracy. This proposal is a great opportunity to express yourself at the voting booth,” he said.

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