A proposal floating around Richmond for years to use federal historic tax credits to rebuild the city's ailing school buildings could gain new life as part of President Barack Obama's upcoming federal stimulus package.
“There's a possibility that it could be part of the stimulus packages,” Gov. Tim Kaine told Style Weekly on Tuesday. “But there are some senators … who don't like the idea of using tax credits as stimulus.”
Because of an exemption in the federal tax code, the use of federal historic tax credits to rehabilitate past-their-prime government-owned buildings such as schools is limited. The tax credits can only be used to rehabilitate government buildings for “other uses.”
The omission means Richmond Public Schools currently does not qualify for federal tax credits that could save as much as 25 percent toward renovation on its two dozen or so historic old school buildings.
Existing state tax credits could already allow the city to save 20 percent toward rehab costs.
An enthusiastic 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. A bill to amend the current tax code was drafted last year by U.S. Sen. Jim Webb, but was never submitted.
The first of Obama's stimulus packages is expected to be voted on today. It is unclear whether the federal tax credit proposal is part of that omnibus bill. Attempts to contact Webb's office by press time were unsuccessful.
The use of federal historic tax credits -- which coupled with already available state historic tax credits could mean savings of as much as to 45 percent to renovate old schools -- first gained widespread public attention in Richmond in 2004 when mayoral advisor Paul Goldman made tax credits central to then-Mayor L. Douglas Wilder's City of the Future plan.
Richmond's current inventory of public school buildings is among the oldest in the state. Most were built more than 60 years ago, and many are of historic or architectural significance. But nearly all remain much as they were when constructed.
Gov. Kaine says he was aware of draft legislation prepared by Webb's office last session, but doesn't know why the legislation stalled.
State Delegate Frank Hall has worked with Goldman to lobby for the federal proposal, and says he's had recent conversations with Webb's top aides.
“Frankly, they have not reached any decision at all,” Hall says. “They're looking at it, they're considering it. But they were quite candid and indicated that no decision has yet been made.”