Senators Roy Blunt, R-Mo., and Jay Rockefeller, D-W.Va., have introduced a bipartisan bill to make the New Markets Tax Credit program permanent and increase its annual allocation.
The NMTC provides private investors with a 39 percent federal tax credit for investments in businesses and economic development projects in distressed communities. The bill is co-sponsored by Senators Ben Cardin, D-Md., Susan Collins, R-Maine, and Maria Cantwell, D-Wash.
Congress originally authorized the NMTC program as part of the Community Renewal Tax Relief Act of 2000. The fiscal cliff deal included a two-year extension of the program with $3.5 billion in annual credit authority provided for 2012 and 2013.
By providing an incentive for investment in economically distressed communities, the NMTC has generated over $55 billion in total investment, creating over 350,000 jobs between 2003 and 2011. According to a recent report from the NMTC Coalition, a lobbying group, the investments in businesses and the jobs created by those businesses have generated more than enough federal tax revenue to pay for the program.
“Unemployment across the country is still too high,” Rockefeller said in written remarks. “The NMTC is a proven tool for creating quality jobs and economic opportunity in rural and urban communities across the country. This is a market-driven economic development tool that works.”
The tax credit has benefited businesses in the home states of both Blunt and Rockefeller. In Missouri, use of the NMTC program can be traced either directly or indirectly to the creation of nearly 24,000 jobs between 2003 and 2010. More than 100 Missouri businesses have used the tax credit since it was created, for projects totaling $2.1 billion in investments between 2003 and 2010. Missouri ranks fifth in the U.S. in terms of the dollar amount of New Market Tax Credits in the state.
“The New Markets Tax Credit Program has already had a positive impact in Missouri, leading to more than $2 billion in investments and thousands of jobs,” Blunt said in a statement. “I’m glad to support this bipartisan bill to make this tax credit permanent so that we can continue to encourage investment, growth, and job creation in low-income communities nationwide.”
The tax credit has also assisted businesses in West Virginia. “A New Markets Tax Credit investment in Wheeling, West Virginia helped bring the Wheeling Stamping Building back to life,” Rockefeller said. “The building was once a bustling hub of the metal stamping industry. After deteriorating and sitting dormant for decades, the New Markets Tax Credit helped finance the restoration of the building that created 300 construction jobs. Now the building houses 350 full-time employees in a community that needs good jobs.”
A recently released NMTC Coalition progress report found that NMTC investments are reaching severely distressed communities. Over 75 percent of investments go to areas with unemployment rates over 1.5 times the national average, poverty rates above 30 percent and/or median incomes below 60 percent of the area median.
“The credit’s potential is being stilted by the uncertainty surrounding its four consecutive temporary extensions," said NMTC Coalition President Jose Villalobos in a statement. “We applaud Senators Rockefeller and Blunt for taking this crucial step toward securing permanent extension for the NMTC, fortifying the economic stability of these communities and the country's economic future.”
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