It’s a tax credit that could be worth as much $250,000 in local revitalization financing to the City of Auburn in the coming fiscal year.
And City leaders on Monday put in to the state of Washington for it, with the hope of receiving it for the ninth straight year.
State lawmakers authorized the tax credit in 2009 to levy a .0203 percent sales tax credit against the state sales tax for local revitalization financing, providing financial help to cities to help them pay for public improvements in an identified revitalization area and promote community and economic development.
Shelley Coleman, financial director for the City of Auburn, estimates that, based upon historical taxable retail sales, the rate of .0203 percent should generate $250,000 for local revitalization funding during the state’s fiscal year, July 1, 2018 to June 30, 2019.
The tax credit is available to the City for up to 25 years, but to continue to get it, the City must request it each year by ordinance.
The City first applied for the use of local revitalization financing on Aug. 11, 2009 and the Department of Revenue approved the City’s application on Sept., 16, 2009, authorizing up to a quarter of a million per year for the local revitalization program, that is for capital improvements on the downtown Promenade.
In 2010, the City issued $7.24 million in 2010 C/D Bonds to fund capital improvements for the Promenade. Annual debt service payments for these bonds continue through the year 2034. Funds from EDA grants, combined with REET2 funds and interest earnings, are used to pay for the annual debt service costs of the local revitalization project. As of the end of 2017, the remaining principal balance was $5.6 million.