Coalition makes case for continuing New Markets Tax Credit program
Thursday, December 13, 2012 9:38 AM
A national coalition of community development organizations and financial institutions is hopeful that new figures released today will help persuade Congress to renew the New Markets Tax Credit (NMTC) program.
According to the coalition, the federal program has spurred redevelopment in low-income neighborhoods that has helped to create more than 500,000 jobs nationally and generated more than $8 billion in new federal and state tax revenues between 2003 and 2010.
The New Markets Tax Credit Economic Impact Report is the first to measure the aggregate economic impact of NMTC investments over the course of the program. The report also examines the extent to which the federal tax revenue generated by individuals and businesses benefitting from New Markets Tax Credit investing offsets the cost of the program to the federal government.
Enacted in 2000, the program seeks to spur private investment and economic growth in low-income communities by offering individual and corporate investors tax credits for making equity investments in specialized financial institutions called Community Development Entities. In Iowa, they include Iowa Community Development LC, Johnston; Midwest Renewable Capital, Grimes; and Rural Development Partners LC, Mason City.
According to the report, the $5.3 billion in federal tax revenue generated by the program "more than covers the cost of the program as measured in terms of revenue lost by the federal government." The report also estimates that state and local governments received more than $3 billion in new tax revenue as a result of the program.
In Iowa, Greater Des Moines Habitat for Humanity and four other Iowa Habitat affiliates in August were the most recent recipients of NMTC funds, sharing $12 million for use in projects across the state.Greater Des Moines Habitat will use its nearly $4.5 million NMTC investment from Iowa Community Development LC to build 27 homes in the River Bend, Union Park, King Irving, Mondamin Presidential, Capitol Park and Drake neighborhoods.