New Markets Tax Credit Makes Substantial Contribution In Rural America
“The New Markets Tax Credit: Creating Economic Opportunity in Rural America” Report Finds that NMTC Has Generated A Significant Amount of Jobs and Investment in Rural Communities
A report issued yesterday by a coalition of community development organizations and financial institutions details how the New Markets Tax Credit (NMTC) has spurred private investment in rural communities around the United States. This federal tax credit, which expired on December 31, 2013 and is awaiting congressional action, has generated over $7 billion in investments and 67,000 jobs in rural America.
Freeport Press, in Freeport, Ohio, is an excellent example of the impact New Markets Tax Credit investments can have in rural communities. (Photo from the Finance Fund)
“While there is ample data on the New Markets Tax Credit’s track record of delivering capital to our most challenged communities, there was little research on the economic impact of the NMTC in rural America in particular–until now,” explained Bob Rapoza, spokesperson for NMTC Coalition.
The report analyzes job creation and investment trends of the NMTC in rural America between 2003 and 2011. Specifically, it highlights the NMTC’s role in helping rural communities tackle two persistent problems: the loss of manufacturing jobs and inadequate access to healthcare facilities. During this time, the NMTC delivered over $1.4 billion in total project financing to rural manufacturing projects like Continental Tire in Sumter, South Carolina, and $536 million to rural healthcare facilities or clinics like the Delta Memorial Hospital in Dumas, Arkansas.
“Based on the findings of this report, it is clear the NMTC is a significant player in delivering capital to rural businesses and economic development projects,” said NMTC Coalition president Jose Villalobos.
One such project is Viracon, a rural, Minnesota-based manufacturer of energy-efficient specialty glass for skyscrapers, which is sold across the world. Midwest Minnesota Community Development Corporation (MMCDC), a board member of the NMTC Coalition, provided a low-cost, $14.4 million financing package for Viracon’s new 650 production lines at their plant in Owatonna, Minnesota. As a result, the company was able to preserve its global competitiveness and the 800 living-wage jobs it provides for U.S. workers.
The NMTC was enacted in 2000 in an effort to spur private investment and economic growth in communities with poverty rates of at least 20 percent or median incomes at or below 80 percent of the area median by offering a modest incentive on investments made in these communities.
Contact: Bob Rapoza