Preservation Pennsylvania recently released a new economic study titled “The Missing Key, A Study of the Impact and Potential of the PA HPTC” to champion the state’s historic tax credit program ahead of its sunset date in June of 2020. Preservation Pennsylvania is currently working closely with state Senators and Representatives to reauthorize and expand the current Pennsylvania Historic Preservation Tax Credit (PA HPTC). The new report was completed by Donovan Rypkema and PlaceEconomics. The use in the state of the PA HPTC (passed in 2012) and the Federal Rehabilitation Tax were studied to determine the impact HTCs have had on Pennsylvania’s communities and historic resources.
Pennsylvania’s historic rehabilitation projects that utilized historic tax credits generated many of the same positive outcomes as seen across the country. The state has awarded $15 million in credits up to May 2019 for projects totaling more than $700 million in public and private investment. In Pennsylvania, for each $1 million investment in a project, 6.4 direct jobs and 5.6 indirect/induced jobs were created. Historic rehabilitation jobs are consistently higher paying than new construction jobs.
The state historic tax credit projects also represented a wide range of project size, location, and type. Almost half of the PA HPTC projects were under a million dollars, with a quarter of those under $500,000. The state has also seen their program touch 50 different communities, from both the large cities of Pittsburgh and Philadelphia to small towns where both the state and federal HTC are necessary to fund a project.
AREAS FOR IMPROVEMENT
Currently, the PA HPTC has an annual cap of $3 million in tax credits per fiscal year. Tax credits per project cannot exceed $500,000. Every year since the program was authorized the amount requested for credits has far exceeded the $3 million limit. The report found that Pennsylvania is falling behind other states in its use of the Federal Historic Tax Credit program due to the small annual cap and the small per-project limit of their state program. Vermont is the only state with a lower annual cap, and their population is less than five percent of that of Pennsylvania. The report found that if the annual cap was increased to $50 million a year, a potential of 2,800 new jobs would be created.
With the sunset date of the current PA HPTC program fast approaching, many dedicated groups and individuals are seeking to gain support for the re-authorization of the program. The report by Rypkema and PlaceEconomics also outlined recommendations for the state program moving forward. These dedicated groups are hoping to see some form of these recommendations implemented along with the re-authorization of the program.
More information on these efforts can be found through Preservation Pennsylvania.
Cover Photo: Ford Motor Company Assembly Plant | Pittsburgh, PA