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Historic tax credits are threatened in Missouri Senate
By Anne K. Suggs
The Missouri Coalition for Historic Preservation and Economic Development would like to request your support in maintaining the Missouri historic tax credit in its original form.
Although Missouri politics evolve by the minute and the position of the legislature may have changed even by the time this is published, I will give you a brief overview of the situation.
A group of six senators -- Cape Girardeau's Jason Crowell, Matt Bartle (Lee's Summit), Brad Lager (Maryville), Chuck Purgason (West Plains), LuAnn Ridgeway (Clay County) and Jim Lembke (St. Louis County) -- are threatening to prohibit the passage of the economic development bill (Senate Bill 45). Unless the bill is amended to include drastic historic tax credit reform, these senators vow that SB 45 will not make it through the Senate. This small group, led by Crowell, may halt the passage of a key piece of legislation that will create approximately 30,000 jobs for Missourians.
But what is equally dangerous is the group's proposal for historic tax credit reform, whether it comes in the form of an annual cap or sunset. A cap on the Missouri historic tax credit would kill the program. If developers and owners are not certain that a credit will be available, they will not be able to obtain financing, and redevelopment throughout the state will come to a halt. It is important to recognize that Missouri's historic buildings are economically obsolete unless an incentive like the historic tax credit can be expected by investors. Therefore, it is critical that no cap on historic tax credits be included in SB 45, as it would render the program useless.
Missouri's historic tax credit program is indispensable to the state economy. It has generated enormous benefits in terms of job creation, return to state and local taxes and community development.
It is counterproductive from a job creation standpoint to damage the historic tax credit through economic development legislation. Often referred to as a jobs bill, SB 45 has a central theme of putting Missourians back to work. This is exactly what the historic tax credit program does.
The latest report from Missouri's Department of Economic Development indicates that in fiscal year 2007, more than 4,000 jobs were directly created by the historic tax credit program. Since its inception in 1998, the credit has driven down unemployment by producing more than 40,000 Missouri jobs, according to Donovan Rypkema, the foremost preservation economist in the United States. Few programs have been so effective.
The Quality Jobs Act itself resulted in only 2,300 (St. Louis Post Dispatch, Feb. 22). The state needs the historic tax credit in order to keep unemployment rates down.
The impact of Missouri's historic tax credit program reaches beyond job production. It pays for itself by providing more than a dollar of return in state and local taxes for every dollar issued in credit. In fact, Missouri taxpayers have seen $673 million direct and $700 million indirect additional income as a result of the program (Donovan Rypkema, 2008). Research by David Listokin at the Rutgers Center for Urban Policy indicates return on state investment in historic rehabilitation trumps that of other public works, like highway construction and new building construction. The historic tax credit program, an economic engine, is essential to Missouri's economic well-being.
As a result of the historic tax credit, Missouri leads the nation in historic preservation. It has made otherwise obsolete Cape Girardeau buildings into profitable investments. Properties like the Klosterman Block and 116 N. Main St. have been rehabilitated as a direct result of the program, which has helped make Cape Girardeau a better place to live.
Please support the Missouri Coalition of Historic Preservation and Economic Development in our fight for the Missouri historic tax credit. The program is essential to Missouri's communities and economy and must not be damaged through the economic development bill.
Anne K. Suggs is with the Missouri Coalition for Historic Preservation and Economic Development in St. Louis. firstname.lastname@example.org