Data shows the NMTC financed 5,000 projects created over one million jobs all while generating enough revenue to more than pay for its cost to the federal governmentWashington, D.C. – Today, the New Markets Tax Credit Coalition published a new report on the economic impact of the New Markets Tax Credit (NMTC) from 2003 to 2015. This is the third edition of the NMTC Economic Impact Report, which is authored by Rapoza Associates on behalf of the NMTC Coalition. The report analyzed U.S. Department of Treasury data and survey data from 5,000 projects financed by the Credit. “The report documents the success of NMTC investments, which resulted in the creation of more than one million jobs , increased access to health and childcare facilities, created more business opportunities, and new and improved manufacturing businesses. All are located in low-income communities and are clear evidence of the impact of the Credit in increasing economic opportunity and improving rural and urban communities across America” said Bob Rapoza, spokesman for the Coalition. Established in 2000 in the Community Renewal Tax Relief Act (P.L.106-554), the NMTC is the product of a bipartisan effort to stimulate investment and economic growth in low-income urban neighborhoods and rural communities. The NMTC works by providing a shallow federal tax credit of 39 percent, taken over seven years, for private sector investments made in census tracts where the individual poverty rate is at least 20 percent or where median family income does not exceed 80 percent of the area median. Key findings from the report:
- From 2003 to 2015, NMTC investments generated more than $156 billion in economic activity, creating 1,013,837 jobs in low-income rural and urban communities, including 459,294 temporary construction jobs and 554,545 full-time equivalent jobs, in nearly every industry sector of the economy;
- The NMTC targets about 40 percent of the nation’s census tracts that meet the statutory requirements for economic distress. However, most NMTC financing goes to severely distressed communities that far exceed program requirements for poverty and income. From 2003 to 2015, 72 percent of NMTC projects were located in severely distressed communities;
- The federal tax revenue generated by NMTC investments more than pays for the cost of the program. For example, in 2015, the NMTC generated $15.2 billion in economic activity, and this activity generated $872 million in federal tax revenue, more than enough cover the $759 million annual cost of the program in 2015 and providing an annual return of $113 million, or 15 percent;
- By stabilizing and revitalizing local economies, the NMTC helps boost tax revenue for state and local governments. Between 2003 and 2015, NMTC investments generated $6.7 billion in state and local tax revenue, including $502 million in 2015 alone;
- The NMTC enhances community revitalization efforts by financing community facilities and other important quality of life amenities. Between 2003 and 2015, the NMTC financed nearly 2,000 community services and facilities, including hospitals, schools, nonprofit service providers, and day care centers;
- After more than a decade of investments, the NMTC has touched the lives of millions of individuals, from the 17 million patients served by NMTC-financed healthcare projects to the nearly 250,000 students and children attending NMTC-financed schools or cared-for in early-childhood learning centers; and
- Over the years, as the program has matured, NMTC financing has increasingly gone to rural communities, areas experiencing severe economic distress, for healthcare facilities and manufacturing businesses, as well as other locally driven projects.