Just after the start of the new year President Obama signed the “fiscal cliff” legislation, which included an extension of the New Markets Tax Credit (NMTC) Program for 2012 and 2013. The bill gives the CDFI Fund tax allocation authority of $3.5 billion in each year. Currently, the CDFI Fund is reviewing applications submitted during the 2012 allocation round and plans to announce the awards in April of this year.
At the same time, the New Markets Tax Credit Coalition has just released two different reports on the impact of the NMTC program. The first of these reports – New Markets Tax Credit Economic Impact Report: Measuring the Direct and Catalytic Impact of New Markets Tax Credits in Low Income Communities – measured the economic impact of the NMTC program between 2003-2012 and resulted in four key findings:
- Between 2003 and 2010, NMTC investments were responsible for creating over 500,000 jobs in distressed communities.
- Between 2003 and 2010, NMTC investments generated over $5.3 billion in federal tax revenue and over $3 billion in state and local tax revenue.
- Federal tax revenue generated by the NMTC program more than offset the cost of the program as measured by lost federal tax revenue.
- Through 2010, NMTC investments directly generated over 124,000 operational (permanent) jobs. In 2010 alone, NMTC investments in operational activities generated almost $1.1 billion, easily offsetting the estimated $720 million cost of the program and providing a 50% return on the federal government’ investment.
The second report – New Markets Tax Credit: At Work in Communities Across America – profiled 92 different projects that were made possible by NMTC allocations, highlighting the impacts these projects are having in their communities. The report covers a wide range of projects, from schools to manufacturing facilities to health centers, all of which are helping to revitalize their local economies and communities.
Since its inception FUND Consulting has assisted clients to receive over $175 million in NMTC allocations, which have helped to create significant economic impacts in their local communities. We are pleased that Congress has extended this important program and look forward to continue supporting our clients in putting their NMTC allocations to work for more distressed communities.
What impacts have the New Markets Tax Credit Program had in your community? What project have recently been completed with the help of NMTC allocations?