Underserved communities that confront difficult situations, including natural disasters, economic distress, and economic dislocation, rely on the New Markets Tax Credit (NMTC). It helps them restore economic stability and improve integral health and social services. During present times in particular, as we face the global COVID-19 pandemic, numerous communities across the county have been hit especially hard. There is a clear inequality that we hope to reduce.
The NMTC is essential to many communities, including both urban and rural areas, that have been devastated by the pandemic’s impact. It has already helped many of these communities build and restore necessary infrastructures, services, and programs, and it has the capacity to provide billions of dollars more to marginalized people in the future. This incredible impact could be permanent and long-lasting with the new bipartisan bills presented in the House and Senate.
When Sens. Cardin (D-MD) and Blunt (R-MO) and Reps. Sewell (D-AL) and Reed (R-NY) introduced the NMTC Extension Act of 2021 just a couple of weeks ago, they paved the way for the NMTC to impact communities and neighborhoods well into the future. If passed, this legislation would permanently extend the NMTC and provide $5 billion annually to the program. This money would be adjusted in the future according to inflation to further support the program. In 2019, Congress extended the NMTC through 2025; however, this new legislation would make it more permanent and effective well into the future.
We are confident that these bills to permanently extend the NMTC would greatly impact low-income and marginalized communities. It consistently provides jobs, improves infrastructures, creates new healthcare and childcare facilities, helps business and economic issues, and much more. The NMTC program is flexible and adaptable, empowering the communities affected to choose how they can best be supported. We want to ensure that we can provide certainty and consistency through this program, which is why the permanent extension is so important.
The projected impact of $25 billion in New Markets Tax Credits includes an estimated 690 new manufacturing expansions and industrial projects: 275 mixed-use projects combining housing, commercial, and social services, 255 new or improved health clinics, hospitals, and medical offices, and 775 investments in daycare centers, Boys and Girls Clubs, and other community facilities. It will also generate an estimated 590,000 jobs.
We appreciate the leadership of several Members of Congress in promoting this meaningful form of support for communities, including Sens. Blunt and Cardin and Reps. Sewell and Reed. We are also grateful for the Ways and Means Committee Chairman Richard Neal (D-MA), who is a longtime supporter of NMTC and championed provisions to expand and make the credit permanent in the House infrastructure bill last year.
While the NMTC has already made great strides in gaining extensions and continuing to provide support for marginalized communities around the country, we know that we can make a much larger difference if given a permanent extension. A permanent extension at $5 billion per year would help people recover more easily from the COVID-19 pandemic and improve their lives for good. In particular, expanding the NMTC will provide more investors the incentive to fund minority-owned businesses and needed projects in communities of color. This can help boost the entire U.S. economy.
Over the last 18 months, Congress has increased NMTC allocations by more than 40 percent and extended the Credit for five years. In addition, in 2020 the House passed infrastructure bill — HR 2 the Moving Forward Act – included a permanent authorization of NMTC, provided $3.5 billion in additional authority to aid with the economic recovery and established an incentive to drive more Credits to Indian Country. There is clear and growing bipartisan consensus the NMTC is an incentive for revitalization, especially for communities hard hit by the coronavirus pandemic. With new efforts underway to improve the country’s infrastructure, the Coalition looks forward to building on this momentum in the 117th Congress.
Since its inception, the NMTC has delivered well over $105 billion in flexible capital to farming towns and urban neighborhoods alike that have been left outside the economic mainstream. During this especially difficult time for many communities that were already struggling, the NMTC provides a tremendous chance to create jobs, spread opportunities, and help put America back on a solid financial footing. It can truly help both local communities and our entire country’s prosperity, and I look forward to seeing how much more it could accomplish if given permanent status as a result of this new legislation.