Houses in construction sit at the Kennedy Farm development on Hillhurst Road May 31, 2019.
Two cities took different routes to potentially implement a credit on state sales tax designed to fund affordable housing programs this month, with Ridgefield approving and Woodland declining on imposing the funding source.
Ridgefield City Council unanimously approved an ordinance imposing the tax credit against the state’s collection during their July 9 meeting. The credit, which essentially re-appropriates sales tax collected that would ordinarily go to the state, will not increase sales tax in the city, according to information provided to council.
The credit comes as a result of a bill passed in the Washington State Legislature in 2019. The credit can be used for “acquisition, construction or rehabilitation of affordable (and supportive) housing,” as well as maintenance and operations for those types of housing, council information indicated. Cities the size of Ridgefield would also be able to use the funds for rental assistance.
The funding was designated to benefit individuals with income at or below 60 percent of a city’s median. At the meeting Ridgefield Finance Director Kirk Johnson said the median was about $56,000 according to latest Census data.
Cities had two deadlines for implementation of the credit, beginning with one for cities to pass a resolution of intent before Jan. 27. Ridgefield had adopted their resolution Dec. 19.
The second deadline was an ordinance that needed to be approved by July 27. Johnson said the city would not be able to come back and impose the credit at a date past the deadline.
Johnson said the action was strictly whether or not to approve the credit, with no specific projects or programs to use those funds determined at the meeting.
According to the Municipal Research and Services Center (MRSC) there are a few scenarios as to how much is received by which government entity. Counties must also approve to impose their own credit in order for cities to be able to take advantage of the funding source through their own approval, which Clark County has done. Should cities like Ridgefield that do not have one of a number of “qualifying funds” but elect to impose the credit, the money credited would be split between the county and city.
An estimate from the MRSC anticipates the city would collect just shy of $21,000 annually from the credit for 20 years.
Johnson said the ordinance essentially determines whether the city would handle what to do with the potential funding source, or to leave it up to the county to make those decisions. Following the approval Day said she would favor a “wait and see” approach on what programs would become available to use the credit on.
Ridgefield Mayor Don Stose identified the potential of partnering with Habitat for Humanity for administration of the funding, saying the group was looking to rehabilitate low-income housing in the city.
“This would be a great opportunity to do that,” Stose remarked.
Woodland took a different route, as their city council did not get to a vote on their own resolution due to a lack of a second motion on the item during their July 20 meeting. Moved by councilor DeeAnna Holland, an estimate from the Association of Washington Cities showed the city could receive about $12,500 in funding, based on 2017 taxable sales.
Woodland previously passed its intent to impose the tax credit Jan. 21 in a split 4-3 vote, with councilors Holland, Karl Chapman, Janice Graham and Monty Smith voting for and councilors Dave Plaza, Benjamin Credricks and Carol Rounds voting against.
As the deadline for approval of imposing the credit is before the next scheduled council meeting, Woodland has essentially opted out of directly receiving funds from the credit opportunity. Instead, Cowlitz County will collect all of the funds from the credit as opposed to a split between the county and city.
