Under Michigan law, only cities can levy an income tax upon their own residents and upon non-residents who work within the city. To compensate in part for the decline in tax revenues as neighboring townships continue to develop, 425 agreements provide for an alternative to annexation and a mutually agreeable plan for sharing revenues between the two units of government. Also, ideally, the concept of 425 Agreements can be integrated into a regional planning concept allowing for several local units of government to coordinate future development.