This session of Congress is almost certain to consider major tax legislation. There is support on both sides of the aisle for revamping our tax code to make it pro-growth, to improve the economy and give the American people better economic opportunity. While our two parties differ on many details, there are some areas in which there is substantial bipartisan agreement. One is the need to continue to revitalize our urban neighborhood and rural communities.
Over the years, we have worked to together to support a program that is particularly successful: the New Markets Tax Credit (NMTC). NMTC provides a modest incentive for private sector investment in economically distressed urban and rural communities. That investment has created jobs and business opportunities across America and that’s why we’ve introduced, along with our House colleague Rep. Tom Reed (R-N.Y.) and Senate colleagues Sens. Roy Blunt (R-Mo.) and Ben Cardin (D-Md.), the New Markets Tax Credit Extension Act of 2017. Our bill makes the NMTC a permanent part of the tax code.
The idea behind the New Markets Tax Credit, originally authorized in 2000, is to encourage job growth and business opportunities in both rural and urban low-income communities by incentivizing private investors. In parts of the country where economic opportunity is needed, but investment capital is difficult to secure, the NMTC helps open the door to jobs and prosperity by encouraging private sector growth in these “new markets.”
A bipartisan effort from the start – the NMTC began under a Democrat president and a Republican Congress – the Credit has always enjoyed strong support from both Democrats and Republicans.
As members of Congress from two different sides of the aisle and two different states, we are both well aware of the positive impact this NMTC has on our districts and those all across the country. Each and every state in the nation has benefitted from a New Markets Tax Credit project.
In Fiscal Year 2016 alone, the CDFI Fund, which operates the program at Treasury, reported that the NMTC delivered $3.16 billion in financing to 530 businesses, community facilities, and economic revitalization projects. Communities put the capital to work, creating nearly 11,000 permanent jobs and almost 27,000 construction jobs in areas with high unemployment and poverty. Since its inception, the NMTC has generated some $80 billion in total project investments, creating over 750,000 jobs. It is also one of the very rare programs that more than pays for itself—leveraging $8 for every dollar that the NMTC costs the federal government. Few other programs can say that.
Just as significant as the Credit’s reach is its structure that gives attention to local projects and local voices. Decisions for NMTC projects get made at the local level; Washington does not pick winners and losers. Whether it is a grocery store, manufacturing business, or health or community center, both rural and urban communities have seen the catalytic power of the NMTC in driving capital to areas that need it most.
In Ohio, the NMTC financed the Muskingum Rec Center in Zanesville, the Ironville Terminal in Toledo, and Quickloadz in Nelsonville, a manufacturer of a trailer system allowing trucks to pick up and drop off sea shipping containers in a safer, more efficient way by a truck. In Massachusetts, it has financed projects like the Massachusetts Green High Performance Computing Center and the Holyoke Healthcare Center, both located in low-income areas in Holyoke, and the expansion of Cape Cod Café Foods, a third generation, family-owned restaurant business, into the manufacturing and wholesale of their signature frozen pizzas.
We speak as members of the Ways and Means Committee, but support for the New Markets Tax Credit extends far beyond the tax-writing committee. Over 50 Members of the House have cosponsored our bill. It is clear NMTC is something that Washington can and should agree on.
With tax reform about to take center stage, now is the time to make this NMTC permanent.
This column originally appeared in The Hill. The views expressed are their own and are not the views of The Hill.