SPOKANE, Wash – Some of Spokane’s most senior officials said a tax credit that could help the city grow is not being utilized. However, Steve MacDonald, the Director of Community and Economic Development for the City of Spokane, told NonStop Local they are trying to change that.
“This is really about low-income communities and helping bring people out of poverty,” said MacDonald.
The new market tax, also known as NMTC, could help bring new infrastructure to neighborhoods in Spokane that need it the most. The goal of the tax credit is to incentivize investors to revitalize low-income communities.
How does the tax credit work? Private investors reach economically distressed areas through financing organizations with local ties. These community development entities, CDEs, apply for a tax credit with the Department of Treasury. These private investors invest in the CDEs in exchange for the credit. The CDE then seeks out opportunities in distressed communities with the potential for high impact.
Examples of projects that could utilize NMTCs are manufacturing businesses, healthcare projects, and educational programs. In 2022, projects involving NMTCs created more than 50,000 jobs. In addition, close to 300 projects involving NMTCs were done in 40 states, but none were done in Washington.
The data presented by the City of Spokane showed that the Lilac City could be another NMTC success story. Nearly half of 74 Census tracks would qualify for NMTC, meaning they have some level of distress.
MacDonald said these areas of high distress should be reframed as areas of opportunity.
“That’s lemons or lemonade. You have an area that qualifies for a program that’s earmarked for poor areas and low-income communities, but again, you can’t get that program in areas that don’t have that designation, so let’s use that area to our advantage.
