Historic Tax Credits under fire
Once again a small group within the Missouri General Assembly has targeted the Historic Tax Credit program for modification or elimination. Your input to your senator is critical if we are to preserve this critically important tool for redevelopment of our cities and towns.
The following is a brief fact sheet/talking points to help you better understand the issue; this was developed by the Missouri Coalition for Historic Preservation and Economic Development and provided by Eric Freidman, a St. Louis REALTOR® who is active in the coalition to protect and expand Historic Tax Credits in Missouri.
Fact Sheet on Historic Tax Credits:
Economic Development – During a devastating housing/financial economy, it is critical that the Historic Tax Credit is allowed to continue generating local jobs and infusing state and local budgets.
- The Missouri Historic Tax Credit has driven down unemployment by creating over 40,000 jobs since its inception in 1998 (as of September 11, 2008) (Rypkema, 2008).
- With a return to the state of over one dollar for each credit dollar issued, the Historic Tax Credit has resulted in $673 million direct and $700 million indirect additional income for Missouri taxpayers (as of September 11, 2008) (Rypkema 2008).- For every one million dollars of spending on historic rehabilitation, local income increases by $704,000 and 20.2 jobs are created. Those results significantly exceed payback from other types of state investment (e.g. one million dollars of manufacturing output adds an average of $470,000 to local household incomes and creates 13.9 jobs.) (Rypkema, 2008).
- One million dollars of rehabilitation investment results in an $110,000 increase in state taxes and $92,000 in local taxes (Rypkema, 2008).
- Each year, the benefits of the Historic Tax Credit far exceed direct cost, boosting Missouri’s economy by more than one billion dollars per year (Rutgers, 2001).
No Caps – Capping the Historic Tax Credit will halt redevelopment and destroy the program.
- Renovated buildings must be completed and certified prior to the tax credit being issued. If developers/owners are not certain that a credit will be available, they will not make the initial investment. The credit is essential to making the project work.
- Buildings eligible for the Historic Tax Credit are economically obsolete without an available incentive.
- The Historic Tax Credit of Missouri is modeled after that of the Federal government. Both remain successful because they are uncapped and are allowed to function through efficient markets.
Recognition – The Historic Tax Credit is the most effective development credit in the state and serves as a model for success in job creation. As a direct result of the credit, Missouri leads the country in historic preservation.
- Research indicates that, among Missouri’s tax credits, Historic Preservation is most effective from a cost-benefit perspective. Researchers recommended that it be preserved in its original state in order to continue promoting economic development (http://www.taimerica.com/missouri/reports.html).
- The Historic Tax Credit has been so successful that several states, including Iowa, Massachusetts, Tennessee, North Carolina, Wisconsin, and Maryland, have made efforts to imitate the credit.
To fight this measure, you’ll need to contact your state senator. For more information on how to do this via paper or electronic mail, go here.
To spread the word about this issue to others, go the Tell A Friend site.
Most of this post was taken from excerpts of the informational site on this issue provided by the Missouri Association of Realtors. The original wording and source can be found via the above two links.