The governor likes them, the mayor is all for them, developers chomp at the bit to use them and corporations hop at the opportunity to cash in on them, so what's not to like about federal historic tax credits?
Apparently something. A proposal to extend already-available historic tax credits to the renovation of public schools has gained no real traction in Washington.
Gov. Kaine says he “definitely, absolutely” supports extending the federal tax credit to allow localities to take advantage of what could amount to billions of dollars in savings statewide.
Currently, federal historic tax credits, which can amount to a 25 percent discount on construction, already are available to renovate historic buildings. But an exemption in the tax code disallows their use for renovating public schools. The state's corresponding program is available, and already allows savings of as much as 20 percent.
Kaine intimated that “there's a possibility that it could be part of the stimulus packages,” referring to President Barack Obama's federal stimulus proposal that seeks to inject hundreds of billions of dollars into the economy.
That bill already has passed the U.S. House of Representatives — sans a tax credit proposal to subsidize school construction — but remains bogged down in debate ahead of a Senate vote.
The absence of the tax credit proposal in the stimulus is disappointing, says Richmond Mayor Dwight Jones.
“It's a wonderful idea,” Jones says, suggesting a need to push Virginia's congressional delegation toward action, something he's not yet tackled. U.S. Sen. Jim Webb drafted legislation but did not submit it during last year's session.
“We agree with the merits,” says Kimberly Hunter, a Webb spokeswoman. “At this point in time. … we're not in a position to reintroduce it, or really talk about where we are in that process.”
Webb's office isn't sold on pushing tax credits as part of a federal stimulus.
“Just because a vehicle like the stimulus is available … doesn't mean [tax credits] should be tacked on,” Hunter says.
Mimi Sadler, considered one of the state's pre-eminent experts on use of both federal and state credits, says the idea fits nicely in any stimulus program.
“They're a proven means of stimulating rehabilitation, and getting people back to work,” Sadler says. “The state [Department of Historic Resources] has done reports to show that tax credits create, rather than diminish funds, and help the economy rather than undermine it.”