In 2006, lawmakers in Olympia passed a bill to provide financial help to cities having planned annexation areas under the State Growth Management Act that don’t produce enough revenue to cover the costs of providing urban levels of service.
At the time the City of Auburn annexed Lea Hill, its leaders said repeatedly that they were moving forward with the annexation only because the state had assured them that the tax credit would be available.
On Monday, Auburn City Council members approved a resolution that levies the .1 percent sales tax credit against the state sales tax for annexation of the Lea Hill Area.
The aforesaid action marks the eighth straight year that Auburn has asked the state for the sales tax credit.
City officials say the tax credit, coupled with other area revenues, should provide urban level services to Lea Hill.
The last year of the tax credit is 2018.
Cities that want to take advantage of this incentive had to start annexation before Jan. 1, 2010. It is available to the City for up to 10 years and is limited to the maximum of .1 percent credit against the state tax or the difference between the City’s cost to provide, maintain, and operate municipal services for the annexation areas and the general revenues that the City receives from the annexation area during a given year.