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Commission directs staff to draft policy options on using economic development sales tax funds
Summary
Commissioners voted to direct staff to prepare policy options for using economic development sales tax revenues to offset revenue shortfalls created by tax incentives for commercial development; the president estimated a potential budget impact in the $400,000–$500,000 range for the next budget cycle.
The West Fargo City Commission voted July 6 to direct city staff to develop policy options for using economic development sales tax funds to cover revenue shortfalls caused by tax incentives for commercial development.
Commission President said the proposal is intended to make the city’s budget "whole" for tax revenues the city might forego when a property receives an incentive such as a pilot or tax increment finance arrangement. He estimated the amount at "probably $400,000 to $500,000, in that ballpark" for the next budget cycle and said the request is limited to commercial incentives, not housing incentives.
Commissioners asked for specificity on scope and guidance for staff so they know what to return with. The president clarified the direction is to present options during the budget process, including possible uses of the economic development sales tax to offset the expected incentive shortfall. One commissioner voiced support and the commission voted to direct staff to prepare the policy options.
The directive asks staff to return with actionable options for commission consideration during budget deliberations, including any fiscal notes if funding is requested.
