An organization working to promote downtown Casper has resumed its effort to seek a reoccurring source of public funding for its work.
The Downtown Development Authority is asking the City Council to earmark future funding for its efforts through a mechanism called tax increment financing.
Tax increment financing is a way to set aside funds for a specific project or purpose, Pete Meyers, the city’s assistant financial services director, explained at the Council’s work session last week. One year of sales tax revenue from the downtown area would be collected and that figure would then be set as the base amount, said Meyers. Any money collected from that same area in later years that went beyond the base amount would be designated for the development authority.
Tax increment financing works on the assumption that economies tend to grow even as the cost of government stays the same, according to a recent memo from Financial Services Director Tom Pitlick to City Manager Carter Napier. A government should therefore be capable of providing the same level of services to a neighborhood with the same amount of tax income from that neighborhood.
“As that neighborhood economy grows, that growth will result in additional tax revenue,” states the memo. “The theory is that since this additional tax revenue would not be needed for basic services, it could be set aside for special projects or enhancements that specially benefit that neighborhood.”
Councilman Charlie Powell quickly expressed support for the idea at the work session, stating that he likes that it ensures the money collected is then re-invested back into the neighborhood, which should generate economic growth.
“What gets it in trouble is that word ‘tax,’ he said. “People say ‘well it’s a tax.’ It is not a tax.”
Councilman Dallas Laird said he wanted to wait until learning whether state funding for the city is going to be cut before discussing the matter further.
City and county government leaders are worried that the money they receive from the Wyoming Legislature is in jeopardy, as the state continues to receive less revenue due to weak energy prices.
Councilwoman Amanda Huckabay also said she felt it was “fruitless” to have an in-depth discussion at this point, given that city employees have not yet provided recommendations on whether to approve the financing method.
The Council began exploring tax increment financing options for the development authority back in March, but ultimately decided the timing wasn’t right. Last week’s meeting was intended to resume the conversation, but no vote was planned or taken.
Meyers said Wednesday the Financial Services Department is not providing a recommendation at this point because the idea is still in the “preliminary discussion” stage. He pointed out that Casper has never previously used this financing method.
“We’re figuring it out as we go along … It’s complicated and we would have a lot of details to work out,” he said.
Kevin Hawley, the development authority’s CEO, said Wednesday that the organization would use the funds to improve downtown’s infrastructure, such as curbs, sidewalks, streets and lighting. Hawley said it should not be considered a blank check because the Council would oversee how the money was spent.
The extra income is sorely needed, as the organisation has a “very limited” budget, he said. Currently, downtown property owners have voted to pay a portion of their property tax to the agency.
City officials have prioritized revitalizing the downtown area in recent years.
The DDA opened the David Street Station in August with the hopes that the downtown plaza would encourage new businesses to pop up in the surrounding area. Already, there are signs the space might be having that effect. Several new businesses have opened in the surrounding blocks including Racca’s Pizzeria Napoletana, Urban Bottle and The Gaslight Social bar.
Officials are also planning to renovate one of the main downtown roads in January.
Community Development Director Liz Becher previously told the Star-Tribune that the city will be adding street lights, widening sidewalks and moving the electrical wiring underground along Midwest Avenue.