It is interesting to note that Oakland County economic growth has occurred largely without reliance on property tax abatements, the economic development strategy that is most discussed Downriver.

Oakland County communities have generally used property tax abatements as a strategy for pursuing economic development. For example, Rochester Hills, the community experiencing the greatest economic growth in Oakland County, does not grant property tax abatements. Troy, which symbolizes high growth, is another example. Of course, there have been exceptions. Auburn Hills was created through the establishment of a Tax Increment Finance Authority (TIFA) at the state level. But overall, property tax abatements have not been critical to Oakland County economic development.

The use of property tax abatements has been analyzed elsewhere. [9] One of the best analyses of the use of abatements in Michigan was conducted by the Citizens Research Council. [10] The results of the study were that communities are better served by reducing property tax burdens than by concentrating on abatements. Communities are better served in the long run by reducing the overall property tax burden than by viewing existing firms as captive taxpayers and providing only tax reductions to new firms.

The climate in Oakland County is radically different than Downriver, or even Detroit, where the use of property tax abatements is a key ingredient of prevailing economic development strategy. This approach can be summarized by the following example.

The Downriver Community Conference (DCC), the major public sector economic development entity in the area, learned earlier this decade that Mazda was considering Downriver for an auto production facility. The DCC courted Mazda officials, recruiting the firm to Flat Rock, partially with a 12-year, 50 percent tax abatement. Downriver gained Mazda, a major employer, and DCC leaders proclaimed the wisdom of property tax abatements as an economic development strategy.

Undoubtedly, Mazda's decision was the most significant economic gain for Downriver this decade. Proponents of property tax abatements as an economic development strategy are certainly within their right to claim that the Mazda abatement created upwards of 3,500 new jobs for the Downriver area. [11]

Still, the episode raises important questions for Downriver's economic future. Why was it necessary for the DCC to offer an abatement in the first place? More importantly, was the abatement further evidence that property taxes are too high in the Downriver area? What factors led the Ford Motor Company to close the factory formerly on the Mazda site?

Furthermore, is it fair to offer abatements to a large corporation when lower property taxes are not being offered to smaller firms? Is it fair that small firms and residents inFlat Rock are now paying for the abatement during the 12-year period, while property taxes remain above the state average in their community?

There is disagreement on the answers to these questions, but they should be asked because the use of property tax abatements appears to have been accepted uncritically by some Downriver community leaders.

This is troubling, for overall, abatements have generally not delivered what their proponents promised: the General Motors Poletown plant in Detroit being the classic example. General Motors was granted an abatement amidst promises by proponents that "thousands of jobs" would be created. Despite widespread controversy, an entire neighborhood was levelled through eminent domain and an automobile factory erected in its place. The Poletown plant has never delivered the number of jobs promised by proponents. Today, Poletown stands as a national symbol of the failure of a tax abatement strategy for economic development.