We recently funded a renovation of the Kings Highway Head Start project, a part of the Miami Valley Child Development Centers Inc. This is one of many projects that Finance Fund has been privileged to work with. Those that know me, know I’m a passionate advocate for Head Start and this one was no exception.

Miami Valley Child Development Centers, Inc. serves Clark, Madison and Montgomery Counties in Ohio. Their overall goal is to prepare children, ages zero to five years, to be successful students when they enter kindergarten. Programs work holistically with families and children, balancing parent involvement, health and nutrition, social skills, literacy, and numeracy development. More than just a childcare center, Miami Valley Child Development Centers empower families by teaching parenting and life skills.

When our program team met with Miami Valley Child Development Centers, Inc., we saw their need to repair and renovate their Kings Highway facility. Using New Markets Tax Credit funding, the repairs and overhaul at Kings Highway MVCDC are underway and should be completed in October. As you can see in these pictures, the improved facility will soon provide a safe, clean and happy learning environment for the children of Montgomery County.

The Kings Highway MVCDC Entrance

Renovated Bathroom at MVCDC

Hallway at MVCDC

Stay tuned for updates on the upcoming celebration for the improved facility. And in the meantime, if you are Head Start seeking assistance in enhancing your facility, contact us. Call at 614.221.1114 or send me an e-mail at jrklein@financefund.org.

On the radio show hosted by former Sen. Fred Thompson, New York lieutenant governor Betsy McCaughey stated that the House’s proposed health care bill contained a provision that would institute mandatory counseling sessions telling seniors how “to do what’s in society’s best interest…and cut your life short.” Citing page 425 of the bill, McCaughey claimed that “the Congress would make it mandatory … that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner, how to decline nutrition, how to decline being hydrated, how to go into hospice care … all to do what’s in society’s best interest … and cut your life short.”

Here’s what the bill says, “An explanation by the practitioner of the continuum of end-of-life services and supports available, including palliative care and hospice, and benefits for such services and supports that are available under this title.” The accepted definition of end-of-life planning means thinking ahead about the care you would like to receive at the end of your life – which may include the choice to reject extraordinary measures of life support, or the choice to embrace them.  The section would require Medicare to pay for, not mandate, some end-of-life planning counseling sessions with a health care practitioner once every 5 years. It is clear that McCaughey’s distorted interpretation of the content of page 425 was offered not to stimulate debate but to frame an atmosphere of fear and mistrust.

Several television ads sponsored by Patients United Now claim that Canadian citizens survived serious illness only by leaving the country to get treatment in the U.S. because of the length of their wait for service in the Canadian health care system, claiming “Washington wants to bring Canadian-style health care to the U.S.” The reality is that no one is advocating for a government run health care system. The president and the leaders of both parties resound with the words of Sen. Max Baucus, Chair of Finance Committee, “single-payer (government run health care) is not going to get even to first base.” Yet the ads continue for what purpose? Not to stimulate debate but to frame an atmosphere of fear and mistrust.

There was a time in this country that I can remember when someone or some group publically making a misstatement or an outright lie, the journalistic community would stand up on their hind legs and demand accountability, and there was an American public that had not abdicated their role in the republic and given place to apathy believing everything we are fed. Naked again.

The efficacy of the NMTC has been documented by numerous public and private sources. For example, a 2007 report from the Government Accounting Office (GAO) suggests that NMTC increases financial involvement by investors in low-income communities. The NMTC Coalition’s 2008 Progress Report indicates investment, deployment, and demand are trending upward. A few examples of the efficacy of NMTC and its proven ability to spur economic growth in distressed communities include:
•    88% of investors say that they would not have made the same investments in low income communities without NMTC
•    At the beginning of 2007 with $12 billion in allocation, it has attracted $4.4 billion in investment with investment growth annually in the first 3 years of the program
•    Every $1 of federal tax revenue forgone as a result of the credit induces $8.90  in investments in low-income communities
•    Financed businesses that created or maintained more than 14,000 full-time equivalent jobs
•    Financed the construction or rehabilitation of nearly 27,000 affordable housing units

In addition, the 2007 GAO report showed that the total dollar amount of investments, number of investors participating, and efficiency of the NMTC program are all increasing at a rapid rate. It placed Ohio as third behind California and New York in dollars deployed and first in number of projects.
Emblematic of Ohio’s demand and capacity, with $75 million received, Finance Fund’s NMTC investments have:
•    Helped create 1,249 full-time equivalent jobs
•    Invested in projects creating 1,467 construction jobs
•    Invested in projects creating 536 child care slots
•    Helped to create 431 units of for-sale housing
•    Invested a total of $44,593,153 leveraging $221,159,679 in other funding.
One example of NMTC investment is in Caldwell, Ohio. Before 2005, if you were a parent in Noble County or one of its surrounding counties and were looking for child care, you would face a continual battle. Availability, cost, safety, quality, and accessibility all added to the frustration of finding the right place, the comforting place to care for your children.

It wasn’t much better for caregivers. Noble Learning Center had been in business for years — always addressing the space issues of high rent, low quality, no availability, poor fit, and no option to renew lease. Driven from location to location, Noble Learning Center operated out of rented apartments on the second floor of a senior center in rural Ohio. Then came the unfortunate news that they would not be able to renew their lease.

Unsure about the future of the Center at all, Center director LaShona
DeVolld made the call to Finance Fund that turned her dreams into reality. Her passion to provide for the community’s children and Finance Fund’s commitment to help them succeed by providing necessary access to capital, allowed the children of this very rural area to have a quality facility to plant the seeds of learning that will help them grow and develop into successful individuals.

LaShona discovered an old abandoned National Guard Armory with an open floor plan and a solid brick structure. She thought she had found her new home. After much patience and perseverance, LaShona purchased the former armory building and began major renovations. Funds received from multiple investors, including Finance Fund’s New Market Tax Credit Program, were used for these renovations, as well as furniture, equipment and supplies. Thanks to this program the center can continue its legacy of being the only licensed child care center in a four-county region and providing opportunity not only for children to learn and grow but for parents to gain peace of mind and economic flexibility.

The resulting child care center not only provides service for 135 children, it supported 20 construction jobs, 15 full time jobs, the productive reuse of an abandoned 14,880 square foot building and has become an economic engine in the local economy.

It is proposed that the State of Ohio create an Ohio NMTC program modeled after the federal program. Ohio has felt the backlash of a faltering economy perhaps even more so than the majority of other states in the nation. According to the Bureau of Labor Statistics, in February 2009, the Ohio unemployment rate was up to 9.4% compared to the national average of 8.1%. According to ODJFS, Ohio’s nonfarm wage and salary employment dropped 7,600 over the month, from 5,208,000 in January to 5,200,400 in February, with manufacturing and construction industries seeing a significant effect. Finally, Ohio’s 29 Appalachian Counties have been hit particularly hard, with a poverty rate of approximately 20% as compared to the rest of the state’s rate of 13%. This program would add targeted value to the Ohio economy by stimulating investments in Ohio’s low-income communities. The demand for the federal NMTC is extremely strong and has been since its inception in 2000; i.e. $11 in request for each $1 in allocation authority. A state NMTC program will supplement the federal program by incenting investment, attracting additional investors, and provide more opportunities for Ohioans. The economic impact of an Ohio NMTC program would assume an annual tax credit allocation of $25.6 million for a seven-year program. It would include the following:
•    Annual costs $10 million  in public funding or $70 million over 7 years
•    Leverages $25.6 million in direct investment annually or $179 million over 7 years
•    Leverages an additional $164 million annually ($6.40/credit financing $1)  or $1.1 billion over 7 years
•    $190 million  in projects annually or $1.3 billion over 7 years
•    Increases tax revenue through business, property, income, and other tax structures
•    In times of economic stress investors tend to be more conservative creating gaps in traditional financing as well as NMTC projects. If a state program mirrors the federal model it would easily fill that gap by adding additional  incentive to invest or invest more
•    Create jobs for Ohioans

The Ohio NMTC would be one of just a handful of its kind in the nation—placing Ohio on the map as a leader in this cutting edge initiative. Other successful programs include:
•    In 2007 Louisiana enacted a 35%, 3-year tax credit that supplements the federal program
•    Also in 2007 Missouri approved a $15 million tax credit program for investments in projects in distressed municipalities
•    In 2007 Mississippi enacted the Credit for Equity investments in Community Development entities
•    Texas enacted a state insurance premium tax credit for investment of certified capital in a certified capital company (also based off of the NMTC model) that began in the 2008 tax year
•    Connecticut created a $500 million tax credit program for investments in projects in distressed communities
•    The Michigan legislature is currently considering a state NMTC as well

In conclusion, the Federal NMTC program is proven to be one of the most effective tools in improving low-income communities. An Ohio NMTC program mirroring federal credits would effectively raise private capital, offer flexible financing products not otherwise available, increase Ohio’s competitiveness for investment dollars, invest in businesses and development projects in Ohio’s distressed communities creating jobs and building wealth for low income people, and enhance tax revenue. This program could be a life line for Ohio’s poorest communities. I want to thank you for the opportunity to address the Committee and for your time and attention on this matter. At this time I will be happy to answer any questions you might have.

Sources:
1.    Miara, Jim, The New Markets Tax Credit Program, A CDOs for Cities Briefing Paper: How This New Incentive Can Strengthen America’s Cities, CEOs for Cities, Boston MA, 2004
2.    The New Markets Tax Credit, Progress Report 2008, A Report by the New Markets Tax Credit Coalition, May 2008
3.    United States Government Accounting Office, Report to Congressional Committees, Tax Policy, January 2007
4.    National and State Corporate Income Tax Rates, U.S. States and OECD Countries, 2008, Tax Foundation, 2009, http://www.taxfoundation.org/taxdata/show/23034.html
5.    State Individual Income Tax Rates, 2000-2009, Tax Foundation, 2009, http://www.taxfoundation.org/taxdata/show/228.html
6.    Community Development Finance Institution Fund, New Markets Tax Credit, Compliance and Monitoring Frequently Asked Question, November 2006
7.    Promoting Investment in Distressed Communities: The New Markets Tax Credit Program, Community Development Finance Institution Fund, U.S. Department of the Treasury, October 2008
8.    Ohio Department of Job and Family Services News Release, March 2009
9.    Economy at a Glance, US Bureau of Labor, http://stats.bls.gov/eag/eag.OH.htm