Historic tax credits are the hot topic in Missouri where Gov. Jay Nixon is pushing to shrink the state's program in the waning days before the state legislature adjourns.
Missouri's program is the country's largest, but the state's offer to assist developers rehabbing historic properties cost the state $186 million last year, more than double the second largest program in Virginia. (Developers used historic tax credits to renovate Richmond's Carpenter Center.) The Missouri Business Journal reports that the latest figures "for the tax credit caps circulating Jefferson City include $75 million a year for historic tax credits, half of the current $140 million cap."
While the Show Me State works to cap the amount they dole out in credits, other states are rolling out new and revamped programs and touting them as the cause du jour: a job engine, of course.
By allowing the state government to forgive taxes worth up to 20 percent of the projects cost, supporters hope to see as many as 3,000 new jobs in the state.
Last month, Gov. Tom Pawlenty established his state's historic tax credit program as part of the Minnesota Jobs Stimulus Bill.
Minnesota joins 33 other states that already have historic tax credit programs up and running, including Texas, New Jersey, Illinois and Pennsylvania. New York and Maryland have also tweaked existing programs this year to expand already existing ones.New York governor David Paterson recently told the Albany Business Review, "Historic preservation efforts have proven to create jobs, attract small business, increase property values and promote affordable housing."
John Leith-Tetrault, president of the National Trust Community Investment Corporation, just completed a study with RutgersUniversity that showed that from 1978 until 2008, the $16 billion that was invested nationally in historic tax credits yielded $21 billion in federal taxes. He says it makes sense that the credits have such a powerful impact on local economies because fixing old houses requires skilled, locally licensed labor.
"Any laborer could install a window that you import from China in a new building where everything is square," he says. "[A historic home] requires higher-paid workers because it needs a skilled laborer." It's a facet of the program his group has been touting for years, but has become a more appealing message in this down economy. "This is all that Congress cares about," he says, "so it's an opportune time to bring this up."