Today, the New York Times published an article by Economic Policy reporter, Jonathan Weisman. The piece, entitled, “As Tax Breaks Face Scrutiny, It’s Crunch Time in Congress,” begins by attacking the New Markets Tax Credit by criticizing the Georgia Aquarium, which received financing through the Credit. Below, please find some information that refutes this unfounded critique by Mr. Weisman.
- The NMTC was established in 2000 and since the first allocations in 2003 the Credit has spurred some $60 billion in investment and this financing has resulted in the creation of over 550,000 jobs.
- The profile of the area in which the Georgia Aquarium is located: According to the New York Times’ poverty map, the current poverty rate for that area is 40.5%. At the time of the financing, the poverty rate was even higher: 43.6%. The project created over 1,000 jobs, of which 338 are permanent, including many entry level positions. NMTC financing made up less than 25% of total project cost.
- Museums comprise a small percentage of the overall NMTC portfolio – less than 5%. But the profile of the community – high poverty rates and severe economic distress–is precisely what the NMTC was intended to target. Museums and cultural amenities are often small but very important part of a comprehensive revitalization plan for many urban areas and rural main street communities. In addition to the jobs, investment, and foot traffic they bring to local small businesses, these organizations’ programming, education, and outreach efforts deliver intangible benefits to the surrounding low income community.
- The NMTC is a modest incentive – 39% over 7 years or 5.5% return per year – to investors. In return for this credit, taxpayers–most of whom are private financial institutions – invest in projects in low income communities.
- Only 41% of the nation’s census tracts are eligible and only 29% meet the high distress criteria established by the federal government — poverty rates above 30%, median incomes at or below 60% of area median or unemployment rates at least 1.5 time the national average. Over 75% of the NMTC activity is in these high distress census tracts.
- The purpose of the Credit is to provide a tool for local communities to spur revitalization. Decisions on which projects and what financing are made by local leaders in cities (like Atlanta) and rural communities across America – not in Washington.
- The vast majority of projects financed commercial and industrial facilities, health and daycare centers and small business loan funds. The diverse range of beneficial projects financed by the NMTC, can be seen on our project map on the Coalition website: http://nmtccoalition.org/map/
- The Coalition has a detailed response to the unfounded criticisms made by Senator Coburn in August – you can get it here: http://nmtccoalition.org/new-markets-tax-credit-reports-ignore-success/ This fact sheet may be helpful in refuting any other misconceptions about the NMTC.