The New Markets Tax Credit Program (NMTC) has come under fire recently in two reports, one released by long-standing NMTC critic Senator Tom Coburn and the other in his commissioned report released by the Government Accountability Office (GAO). In his press release and report, Senator Coburn asserts that the NMTC program results in the government benefiting “favorite” big banks and private investors.
We agree that the program does help banks and investors achieve a modest incentive against federal income taxes at a time when investment returns are hard to come by. The program is designed to do just that – entice private investors to bring capital to economic development projects in low-income and distressed communities that otherwise would not be funded.
That’s why the NMTC Program works.
In fact, as mentioned in a recent release from the New Markets Tax Credit Coalition, “Data from the U.S. Department of Treasury indicate that the NMTC has delivered more than $60 billion in capital to businesses and revitalization projects nationwide in some of the poorest communities; these investments have generated over 550,000 jobs in some of the poorest rural and urban communities in America.”
The Coalition’s release notes that both the GAO and Senator Coburn’s report ignore the impact of NMTC investments nationwide. For more than a decade, NMTC investments have made proven significant and tangible impacts in terms of job creation and retention, access to affordable and healthy food, improved health care facilities and manufacturing in low-income rural and urban communities. The program is the federal government’s most effective tool for community revitalization.
Without NMTC in Ohio, development of important economic growth projects in underserved communities throughout the state would slow down, or more likely not even happen. This means fewer jobs and less revenue circulating within distressed economies.
For example: Finance Fund provided NMTC financing that made it possible for Freeport Press to make major upgrades and improvements in its printing operations — including the addition of a state-of-the art web press that increased production and expanded employment opportunities in this rural community. Today, Freeport Press is the area’s largest employer and was listed among the 2013 INC 5000 fasting growing privately owned companies.
I invite you to take a look at some of the NMTC case studies on our website to see the NMTC at work in Ohio. You can reach me with comments or questions at firstname.lastname@example.org.