To get an Ohio NMTC program started there needs to be a united and concentrated effort on the part of the Strickland administration and General Assembly. Policy makers have to decide upfront not to reinvent the wheel. By their own admission (United States Government Accounting Office, Report to Congressional Committees, Tax Policy, January 2007) the federal NMTC program works well. There needs to be an admission that market demand and investors acceptance (yield and risk mitigation) is not the issue. Experience with the federal program has well documented that (GAO report 2008, NMTC Coalition Report 2008). There needs to be some remedial education and examination of the value and leverage of a tax credit model. For example, assuming an Ohio NMTC mirroring the federal model, an annual tax credit allocation of $100 million for a 5 year program costs $195 million and leverages $1.25 billion. That is new money invested in local communities generating tax revenue at all levels.
To steer this effort, a comprehensive, bipartisan group with adequate representation from individuals/groups that have some knowledge in tax credit financing supplemented by a resource group of experts; i.e. accountants, attorneys, practitioners, investors. I am not suggesting commissioning a study of the feasibility of the proposal. The steering committee should have the authority to make recommendations, craft the model, draft legislation, identify and solicit champions and sponsors. It should, as a goal, solicit the full endorsement of the administration and General Assembly.
Tags: Congress, Governor Strickland, New Markets Tax Credit, Ohio General Assembly, US GAO
