There has been some recent discussion on Facebook about tax abatements and their impact on our community. These are important questions, and they deserve more than a quick response in a comment thread.

This page is intended to walk through how Industrial Facilities Tax (IFT) exemptions work, what they mean for taxpayers, and how these decisions are made.

I appreciate the question, and I think it is fair for residents to ask why Council approves these requests and how they affect taxpayers.

First, it helps to explain what an Industrial Facilities Tax exemption (IFT) actually is.

An IFT is not a tax break on a company’s entire property, and it is not a case where the company pays nothing. It applies only to the new investment portion of a project, not the existing building and property they already have. In this case, Imperial’s expansion is about $1.23 million, with 9 new jobs and 15 jobs retained over the next three years. They also indicated they are looking to grow to around 40–50 employees over the next five years.

The requested IFT term is 10 years. During that time, the new portion of the investment is taxed at a reduced rate, and after that period it returns to full taxation.

For this project, the estimated new taxable value is about $616,000. Without the IFT, the total tax on that new portion would be about $35,900 per year. With the IFT, it would still be about $19,800 per year. Over the full 10-year IFT period, that means the company would still pay roughly $198,000 in taxes on the new investment, and about $99,000 over the first 5 years alone.

It is also important to understand where that tax money goes. The city portion is about 23 percent of the total tax bill. The rest goes mostly to schools, county, library, and other taxing entities.

Using that same example, the city portion on the new investment would be about $8,100 per year without the IFT and about $4,100 per year with it. Over the 10-year IFT period, that is about $81,000 to the city without the IFT versus about $41,000 with it. So the actual city difference is about $40,000 over 10 years, or about $4,000 per year, not the full tax bill that people often assume. At the same time, the city is still receiving new revenue on the expansion, plus the company continues paying full taxes on the existing property.

It is also worth noting that the city’s portion of the millage has not increased in at least 30 years. Changes people see in their tax bills are generally driven by property values, voter-approved millages, and other taxing entities, not decisions like this one.

Another part of the picture is that this was not an exception made up on the spot. Coopersville has had IFT guidelines in place since 2015 to create consistency in how these are evaluated. This request fits within that policy.

That does not mean people have to agree with every abatement. Reasonable people can disagree. But these decisions are being made within an established framework, not arbitrarily.

I also think it is important to step back and look at why communities use tools like this at all. Businesses make long-term decisions about where to expand, where to hire, and where to invest. Policies like this help create some predictability and stability. They signal that a community is open to responsible business investment.

Not every business succeeds forever. Some grow, some move in, some move out, and some close. The goal is not to guarantee outcomes, but to create an environment where more businesses choose to invest here, more jobs are created or retained here, and the local tax base is healthier over time.

If a community develops a reputation as being difficult for business investment, over time that can lead to fewer opportunities, less growth, and more pressure on the existing tax base. That is something we have to be mindful of as we make these decisions.

I also understand the concern that small businesses do not always seem to get the same kind of support. That is a fair concern. The important distinction is that an IFT is a specific state-authorized tool for industrial development.

At the same time, we do have a Downtown Development Authority (DDA) that actively supports our local small businesses. I have personally seen a number of different grants and projects supported through the DDA over the years. Some of the work happening right now in our downtown I believe is being assisted through a DDA grant, and there have been others as well. Supporting small businesses remains an important part of the overall approach.

I also want to be very clear on the suggestion of “kickbacks.” That is not how this works. Council members do not receive any personal financial benefit from these decisions. These are public, policy-based decisions made under state law, with required public hearings and additional state-level approval. There are strict ethics and conflict-of-interest rules that apply.

So for me, the question is not whether taxes are being eliminated, because they are not. The question is whether a limited, temporary reduction on the new portion of a project over a defined 10-year period is worth it to encourage investment, retain jobs, create new jobs, and continue building a strong local economy.

People can reasonably disagree on that balance, but I think it is important that the full picture is part of the conversation.

I am always happy to talk more about the policy, the numbers, or any of these decisions.