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Credit Worthy News

The Historic Advisor | Fall 2017

Posted by Katherine Ferguson on Friday, November 17, 2017

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Inside the issue

  • WHAT WE ARE WORKING ON
  • HTC WATCH
  • PROJECT HONORS

    
 

Topics: The Historic Advisor, Innovation

House Tax Reform Legislation Eliminates Historic Tax Credit

Posted by Katherine Ferguson on Thursday, November 2, 2017

A day late, but nonetheless what we expected. The House tax reform bill released this morning does, in fact, eliminate the historic tax credit. This push for tax reform is still in early days and no doubt there will be many changes, maybe even the retention of the historic tax credit, but advocacy is still of the utmost importance. Perhaps now more than ever.

TAKE ACTION NOW

The release of the proposed legislation means that we now know what we are asking for: DO NOT REPEAL THE HISTORIC REHABILITATION TAX CREDIT. It means supporters of historic preservation and believers of economic prosperity driven by historic rehabilitations need to be very specific about what this program has to offer and what we stand to lose. Last year alone, over 1,000 historic rehabilitations were completed; 109,000 jobs were created; $1.7 billion federal, state, and local taxes were generated; and these projects generated $6.2 billion in GDP.

Over the lifetime of the program (1978-2016) these numbers are staggering:

  • 42,293 projects have been certified
  • 2.4 million + jobs have been created
  • $29.8 billion federal taxes have been generated for $25.2 billion credits allocated (that's a $1.20:$1 ratio that proves the program is revenue positive)
  • $144.9 billion has been contributed to GDP

These aggregate numbers are impressive. But it is also the unique placemaking that comes from the reuse of historic buildings in your very own communities that demonstrate the real value of the historic tax credit.

Why are these historic buildings important to you and your community? What positive change and economic development opportunities have you seen from these projects where you live, work, or play? In what state would these places and neighboring properties be without development that was incentivized by the historic tax credit? What projects will not get developed in the future without this incentive?

Consider these questions and take action now before it is too late. We still have a ways to go before the bill becomes law. But House and Senate Republicans are promising an aggressive approach to passage and we must take this very seriously. Losing our historic tax credit would change the landscape of future development in towns and cities across the country, making it more equitable to drastically alter or demolish our historic places. Once gone, we can never replace them.

The same can be said of the historic tax credit. Once gone, an effort to replace what is lost could have uncertain outcomes. We know what Gerald Ford's administration began and Ronald Reagan continued and supported works. We know that its foundation is strong and its bones are good. We know it should not be demolished.

Join us as we stand with the Historic Tax Credit Coalition and others throughout the country to support this historic tax credit. Your contribution of words and support could make all the difference.

Check out this list of important Republican legislators to contact today.

 

Topics: HTC, Historic Tax Credits, tax reform

President Reagan Supported the Historic Tax Credit. Do You?

Posted by Katherine Ferguson on Thursday, October 26, 2017

In 1984, Ronald Reagan was outspoken in his support of the historic tax credit. Today, the historic tax credit is in jeopardy. Just this morning, House Ways and Means Chairman Kevin Brady announced the scheduled release of a House tax reform bill on Wednesday, November 1, and, as we understand it, the bill will NOT include the federal historic tax credit. 

The time is now to voice your support for the federal historic tax credit. As tax reform takes center stage in our nation's capital, the Historic Tax Credit Coalition, the National Trust for Historic Preservation, and many other advocates of this important economic development and preservation tool are speaking up. Please join us!

Contact us with any questions you have about these or other historic tax credit matters. And stay tuned for more information and updates about federal HTC reform in the coming weeks.


Thank you!     
The MHA Team

Topics: Historic Tax Credits, tax reform

HTC Watch | Urgent Tax Reform News

Posted by Katherine Ferguson on Tuesday, October 3, 2017

Well. We wish we had better news.

Last Wednesday, the Republican leadership in Congress and the Administration released a Tax Reform framework that excluded the federal HTC. Regarding tax credits, the document said:

“The framework explicitly preserves business credits in two areas where tax incentives have proven to be effective in promoting policy goals important in the American economy: research and development (R&D) and low-income housing. While the framework envisions repeal of other business credits, the committees may decide to retain some other business credits to the extent budgetary limitations allow.”

Make no mistake, the exclusion of the historic tax credit in this preliminary language is concerning.

There is good news though. Advocates of the federal HTC still have time to work to preserve the credit. But for how long is unknown. It is imperative that those that are interested in saving the program make their voice heard now and reinforce the proof that the HTC is also effective in promoting policy goals as well as having a positive impact on the American economy by stimulating investment and increasing the tax base over time, creating jobs, and preserving historic resources.

The House Ways & Means Committee and Senate Finance Committee Republicans will be integral in the retention of the federal HTC in any tax reform proposals.

House Ways & Means Committee |

Kevin Brady, Texas's 8th, Chairman
Sam Johnson, Texas's 3rd
Devin Nunes, California's 22nd
Pat Tiberi, Ohio's 12th
Dave Reichert, Washington's 8th
Peter Roskam, Illinois's 6th
Vern Buchanan, Florida's 16th
Adrian Smith, Nebraska's 3rd
Lynn Jenkins, Kansas's 2nd
Erik Paulsen, Minnesota's 3rd
Kenny Marchant, Texas's 24th
Diane Black, Tennessee's 6th
Tom Reed, New York's 23rd
Mike Kelly, Pennsylvania's 3rd
Jim Renacci, Ohio's 16th
Pat Meehan, Pennsylvania's 7th
Kristi Noem, South Dakota's at-large
George Holding, North Carolina's 2nd
Jason T. Smith, Missouri's 8th
Tom Rice, South Carolina's 7th
David Schweikert, Arizona's 6th
Jackie Walorski, Indiana's 2nd
Carlos Curbelo, Florida's 26th
Mike Bishop, Michigan's 8th

Senate Finance Committee Republicans |

Orrin Hatch, Utah, Chairman
Chuck Grassley, Iowa
Mike Crapo, Idaho
Pat Roberts, Kansas
Mike Enzi, Wyoming
John Cornyn, Texas
John Thune, South Dakota
Richard Burr, North Carolina
Johnny Isakson, Georgia
Rob Portman, Ohio
Pat Toomey, Pennsylvania
Dean Heller, Nevada
Tim Scott, South Carolina
Bill Cassidy, Louisiana

 

If any of these elected officials are in your Congressional delegation, please seriously consider contacting them to register your support on this issue. If you are from other areas, we encourage you to voice your support as well. Here is how you can help today (and tomorrow, and the next day):

WRITE
The easiest way to advocate for the federal HTC is to work through the Historic Tax Credit Coalition. If you are able to contact any of the above committee members, please email Michael Phillips ([email protected]) at the Coalition. Based on your location, the Coalition team can send you the contact information for your federal legislators along with a form letter that you can cut, paste, and forward. Add a word about how you have witnessed the economic benefits of historic tax credits in your state.

(The National Trust for Historic Preservation has some good statistics and studies if you want to fortify your case.)

CALL
If you want to take it further, pick up the phone and use your voice. Tell your representatives why you support the historic tax credit. Ask that they represent you and your community when they consider any tax reform.

REPEAT
Already sent emails and called? Do it again. If you haven’t heard back from your outreach after three days, repeat your effort. 

Contact us with any questions you have about these or other historic tax credit matters. And stay tuned for more information and updates about federal HTC reform in the coming weeks.

Thank you!

Topics: Historic Tax Credits, tax reform

Historic Tax Credit Legislative Update | August 2017

Posted by Katherine Ferguson on Monday, August 28, 2017

MISSOURI
Tax credit reform is once again a subject of much debate in Missouri’s capital with the historic preservation tax credit garnering much attention. Proponents of tax reform proposals that eliminate the state HTC program cite a report stating that only 26 cents of every tax credit dollar is returned to the state treasury; opponents of reform call this report “amateurish” and not representative of the reality of the program or its positive effects on the state.

A special committee formed by Governor Eric Greitens released a report in early July calling for sweeping changes to the historic preservation tax credit program, much to the dismay of developers, bankers, and local leaders. The current tax credit covers 25 percent of the cost of rehabbing historic buildings and any changes could impact projects in large cities, particularly St. Louis, where 900 projects over the past 15 years have utilized the tax credit for a combined $3.15 billion eligible for reimbursement.

Developers argue the state tax credit makes rehabbing historic buildings possible, and without it, downtown St. Louis will have continuing blight due to abandoned historic structures. Supporters of keeping the tax credit program believe the present uncertainty will cause stagnation in the local development environment and drive investment out of the state.

 

MICHIGAN
Conversely, Michigan’s former state historic preservation tax credit may be receiving new life thanks to recent proposed legislation. In early July, a bill was introduced in Michigan’s State Senate to reinstate the historic preservation tax credits that went away in 2011 under Governor Rick Snyder’s sweeping tax reform. The bill would allow individuals and companies to “credit up to 25 percent of qualified expenditures when paired with federal tax credits,” according to the legislation. 

Over the 11-year period when the credits were available, tax credits leveraged almost $1.5 billion in private investment and created 36,000 jobs, according to data from the Michigan Historic Preservation Network.

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Aurora St. Charles Senior Living | Aurora, IL
Photo Credit: Leslie Schwartz

ILLINOIS
Elsewhere in the Midwest, the Illinois’ River Edge Redevelopment Zone (RERZ) Historic Tax Credit was extended with the signing of legislation by Governor Bruce Rauner on August 18th, 2017. The legislation benefits special historic zones in five cities – Aurora, East St. Louis, Elgin, Peoria, and Rockford – that were identified as in need of special incentives for economic development. This program allows for a tax credit of 25 percent of qualified rehabilitation expenses for historic projects, and since 2009 the program has mobilized $82.1 million in private investment in these communities.

A similar 25 percent HTC was proposed earlier in the year for the cities that were the sites of the Lincoln-Douglas Debates of 1858 (H.B. 3096). Municipalities that would benefit include Ottawa, Freeport, Jonesboro, Charleston, Galesburg, Quincy, and Alton. The outcome of that proposal is yet to be determined. No state historic tax credit program has yet been proposed for the Greater Chicago area.

 

WISCONSIN
Governor Scott Walker’s 2017-2019 biennial budget is creating uncertainty for historic rehabilitation projects in Wisconsin. Included in the proposal is a $10 million annual aggregate cap for the state HTC along with added stipulations requiring applicants demonstrate that their projects create jobs and improve local economies. This type of forced competition is leading developers in smaller communities to shy away from advancing projects, anticipating fierce competition with larger projects in urban centers which routinely claim the majority of annual tax credit allocations. In 2015, Milwaukee projects alone were awarded more than $48 million in tax credits, representing over 42 percent of the state’s annual allocations. However in 2016, $58 million in credits were awarded with 70 percent of projects in communities with a population less than 100,000, proof that the economic benefits of the HTC program are helping smaller communities under the uncapped program.

This is not the first time HTC defenders fought legislation of this type. Governor Walker’s 2015-2017 budget proposed similar changes to the program but the Legislature did not agree. This year, Senate Republicans support a cap, but their proposal would increase the cap to $20 million with a project cap of $5 million and no stipulation for job creation.

 

If you are concerned about the future of your state’s historic tax credit, please make plans to engage your state legislators on behalf of your state’s HTC. The Historic Tax Credit Coalition and the National Trust for Historic Preservation are excellent resources for information on advocacy.

Topics: policy, Advocacy