Tax Reform Road Trip Makes Pit Stop at New Markets Tax Credit-Financed Business
FOR IMMEDIATE RELEASE – JULY 8, 2013 – Contact: Bob Rapoza: Bob@Rapoza.org
Chairmen Baucus and Camp Talk Tax Reform at the Baldinger Bakery in St. Paul, Minnesota
Washington, D.C. – This morning, the chairmen of the U.S. Senate and House tax-writing committees, Senator Max Baucus (D-Mont.) and Representative Dave Camp (R-Mich.) kicked off their bipartisan tax reform summer road trip in St. Paul, Minnesota with a stop at Baldinger Bakery. A fourth generation family-owned business, the Baldinger Bakery was able to secure the private investment capital it needed to expand into a new commercial baking facility with the help of the New Markets Tax Credit (NMTC), a modest incentive that promotes investment and job creation in some of America’s most economically distressed communities.
“Businesses depend on access to capital to succeed. Our 125-year-old family business is no different,” said Steve Baldinger, President of Baldinger Bakery. “In 2010, we received the funds we needed to expand and continue producing goods and services in a cost-effective production environment with the help of the New Markets Tax Credit. We are incredibly thankful for the opportunity the credit afforded us, which also allowed us to stay in the city that has been our home for over a century and provide a living-wage to our 90+ employees.”
Baldinger Bakery’s new factory, a state-of-the-art, energy-efficient and environmentally conscious commercial baking facility, was built on the old Griffen Wheelworks site in East Saint Paul, a neighborhood with an unemployment rate nearly twice the national average. The construction of the new 144,854 square-foot facility employed 80 construction workers, and the operation of the new factory provides over 90 employees with living wage jobs.
The new facility is part of the City of Saint Paul’s and the Port Authority’s broader revitalization plan for the Phalen Corridor area, known as the Beacon Bluff Business Center, where the old 3M headquarters site is located. The Baldinger Bakery project helped stimulate commerce in the economically distressed neighborhood, which was plagued with high unemployment. The business also benefits the area by supporting women and minority-owned enterprises through the procurement of its raw materials, none of which would have been possible without the financing being made available by the NMTC.
The New Markets Tax Credit has leveraged billions of dollars in private investments in businesses and communities that, similar to the Baldinger Bakery venture, likely would never have received injections of patient capital otherwise. In fact, a survey conducted by the U.S. Government Accountability Office (GAO) found that 88 percent of NMTC investors would not have made their investments if not for the incentive of the Credit.
“One of the unique attributes of the New Markets Tax Credit is its flexibility; the Credit empowers local leaders to choose projects that provide a broad community benefit in terms of job creation or added social services, just like the credit did in the community Senator Baucus and Representative Camp visited today,” said José Villalobos, President of the NMTC Coalition and Senior Vice President of TELACU. “In fact, since 2003, the NMTC has delivered $55 billion in private sector investment to credit-starved businesses in underserved areas, and these investments have directly created over 350,000 jobs. To put that number in perspective, during that same period, the U.S. economy created a net of 2.2 million jobs.”
A bipartisan effort since its inception, the NMTC began as a collaboration between Democratic President Bill Clinton and Republican Speaker of the House Dennis Hastert to attract capital to low income communities and continues to garner support from lawmakers on both sides of the aisle. Last month, Senators Jay Rockefeller (D-W.Va.) and Roy Blunt (R-Mo.) together introduced the New Markets Tax Credit Act of 2013 (S. 1133), legislation that would extend the Credit indefinitely by making it a permanent part of the Internal Revenue Code, and enhance the potential impact of the Credit by increasing the annual NMTC allocation. A permanent extension would ensure that a modest federal tax credit continues to be available for investments made in businesses or economic development projects in census tracts in which the poverty rate is at least 20 percent or median family income does not exceed 80 percent of the area median – projects and communities that likely would never have received injections of patient capital otherwise.
“Senator Baucus and Representative Camp’s visit to the Baldinger Bakery underscores the importance of the New Markets Tax Credit to business owners and distressed communities,” said Frank Altman, President and CEO of CRF USA, as well as a member of the NMTC Coalition Board of Directors. “Through the credit, CRF has had the ability to help revitalize seriously distressed communities, not just in Minnesota, but across the country. I encourage Chairmen Baucus and Camp to recognize and protect tax incentives like the New Markets Tax Credit that promote economic growth, strengthen American businesses and create jobs.”
About New Markets Tax Credit Program
The New Markets Tax Credit was enacted in 2000 in an effort to stimulate private investment and economic growth in low income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. The NMTC is a 39 percent federal tax credit, taken over seven years, on investments made in economically distressed communities. Today due to NMTC, more than $55 billion is hard at work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico.
About New Markets Tax Credit Coalition
The NMTC Coalition is a national membership organization of Community Development Entities and investors organized to conduct research on and advocacy for the New Markets Tax Credit. The Coalition hosts two annual conferences and regularly publishes the NMTC Bulletin. To learn more, please visit www.nmtccoalition.org.