Ordinance No. 6760 levies a 0.0192% sales tax credit against the state sales tax for local revitalization financing.  SB 5045 authorizing the tax credit was passed by the state legislature during the 2009 regular session.  The intent of the legislation was to provide financial assistance to Cities to assist with financing public improvements in an identified revitalization area to promote community and economic development.

The City first applied for the use of local revitalization financing on August 11, 2009 and the Department of Revenue approved the City’s application on September 16, 2009, authorizing up to $250,000 per year for the local revitalization program (Promenade capital improvements).

In 2010, the City issued $7.24 million in 2010 C/D Bonds for the purpose of funding 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 2019, the remaining principal balance was $5.4 million.

The tax credit is available to the City for up to 25 years.  2020 will be the eleventh year that the City has asked the State for the tax credit.  As provided by the state, in order for the City to continue receiving the tax credit, the City must request this each year by Ordinance.

Based upon historical taxable retail sales, the above rate of 0.0192% is estimated to generate $250,000 for local revitalization funding during the State’s fiscal year, July 1, 2020 to June 30, 2021.