The Issaquah City Council voted unanimously Monday night to make a six-figure donation that will benefit the Downtown Issaquah Association in order to qualify for a tax credit from Washington state.
The city will contribute $120,000 from its water and sewer utility fund in 2016 in order to take back a $90,000 credit from the state in 2017. That contribution would continue for the foreseeable future under Monday night’s bill.
“That is money we would have otherwise paid to the state of Washington,” city finance director Diane Marcotte said.
The city will still technically give that money to the state, Marcotte said. But because Issaquah will be participating in the Department of Archaeology and Historic Preservation’s Main Street Tax Credit program, the state will give that money to the Downtown Issaquah Association to reinvest in the community through its programs, she said.
But cities must donate early to get their credit. The state only doles out $1.5 million in Main Street incentives each year and cities can take up to a $100,000 credit back.
There are more 30 Washington cities competing for a share of the tax credit pool, Marcotte said.
Still, councilors expressed their excitement at being able to take back some of its state contributions.
“At a time where the state is finding more and more ways to roll back money that they have historically agreed to provide back to municipalities and to counties, this is an opportunity for us to take back monies that could be dearly used locally and not send them on to Olympia,” Councilor Tola Marts said.
Mary Lou Pauly said Issaquah’s Front Street core was one of her favorite parts about the city when she moved here 20 years earlier.
“For my husband, the exciting thing was how amazing the school district was,” Pauly said. “But for me, never having lived in a small town before, it was that we had a main street.”
Pauly added that she had attended many of the Downtown Issaquah Association’s meetings and believed they would do “great things” with the influx of money.
In its nonprofit grant request for the city’s 2015 budget session, the Downtown Issaquah Association listed its operating budget at $120,000. It received $31,500 in operating funds from the city of Issaquah.