Posts Tagged Sustainable Communities Tax Credit
To its credit, the Baltimore Sun has published a series of investigate articles exposing gross errors by city and state administrators of various tax credit programs. The most recent was on Baltimore City’s Historic Tax Credit program.
Preservation Maryland helped fund a feasibility study that led to passage of the tax credit program by the Mayor and City Council of Baltimore in 1996. The primary goal of the program was to create an incentive for the rehabilitation of Baltimore’s stock of historic residential and commercial buildings and tool for revitalizing its neighborhoods. In addition, it was intended to help stem Baltimore’s population loss and alleviate the city’s burdensome property tax rate, the highest in the state.
Here’s how the program works. To be eligible, a building must be individually landmarked or be a contributing structure within a Baltimore City or National Register historic district. The rehabilitation must be substantial and all work must conform to standards that preserve the historic and architectural integrity of the building. In return a 10 year credit is granted against the increased property tax assessment directly resulting from qualified rehabilitation.
To date, over 1200 historic buildings have been rehabilitated in Baltimore City using the tax credit, leveraging over $500 million of private investment. The benefits of the program are clear: renovated and reused buildings, revitalized communities, reuse of existing infrastructure, new jobs and businesses, and a substantial net increase in sales and income tax revenues for the City and the State.
Regrettably, there have been serious lapses by city and state tax assessors that have resulted in unearned credits or credits continuing beyond their 10 year period. Obviously, these problems need to be addressed. In addition, it was found nearly 30% of individuals that used the credit would have done their projects without the incentive. As a result, some have questioned whether or not continuation of the tax credit program is justified.
But I would argue that the 30% still deserve the credit and that it is well worth the investment for the additional 70% of projects that would not have occurred but for the credit. So fix the administrative problems, but don’t throw the baby out with the bathwater by eliminating one of Baltimore’s most effective economic development and community revitalization programs.
A special session of the General Assembly will begin on Monday. This Wednesday Governor Martin O’Malley, joined by Senate President Mike Miller and House Speaker Michael Busch, laid out the outline of the proposed budget plan. This special session is to finish the work left from the regular General Assembly session. As you likely know, the session ended in April without passage of a budget that would have prevented the so-called “doomsday budget,” resulting in hundreds of millions of dollars in cuts from a wide spectrum of programs. Among these cuts would have been the Sustainable Communities Tax Credit for commercial projects.
We are happy to say that funding for the Sustainable Communities Tax Credit was included in the plan laid out on Wednesday. The Tax Credit is considered Maryland’s most effective historic preservation and community revitalization program, resulting in the rehabilitation of over 4,000 historic residential and commercial buildings while leveraging $1.6 billion of private investment. Losing this funding would be devastating to preservation efforts in Maryland.
So what can you do to help make sure this money stays in place during the special session? Let Governor O’Malley, President Mike Miller, and Speaker Michael Busch know that you appreciate their support of the Tax Credit and let your representatives know how important the Tax Credit is to Maryland’s historic resources. Please take a few moments to send them a note or call their offices. There are lots of issues on the table in the special session and we need to make sure our voices in support historic preservation are heard.
The Maryland Historical Trust is currently accepting applications for the FY2012 Sustainable Communities Tax Credits for commercial projects. The deadline for applications is August 31, 2011. Click here to learn more about the program and access application forms.
The Maryland Historical Trust says: “The Sustainable Communities Tax credit program provides State income tax credits for the rehabilitation of existing buildings, both historic and non-historic, within designated areas throughout Maryland. Funds for the Sustainable Communities Tax Credit program are appropriated annually by the General Assembly. State law requires the Maryland Historical Trust to award the funds based on a competitive review and ranking process. To learn more about the tax credit program, the review process for commercial projects, and access the application forms click here. Homeowners may also apply for Sustainable Communities Tax Credits equal to 20% of qualified rehabilitation expenses for improvements to their historic homes. Click here to learn about the Sustainable Communities Tax Credit program for homeowners.”
Remember that each legislative session your voice is needed to protect funding for programs like the Sustainable Communities Tax Credit. Join our email list and get alerts on how you can help protect these valuable programs.