Editorial: Lots of bang for the bucks
Salisbury and Rowan County have a lot to lose if the state discontinues the preservation tax credits that have spurred the rehabilitation of older buildings, attracted millions of dollars in private investment and helped stimulate the local economy.
But so does North Carolina as a whole. State and federal tax credits have boosted income-producing rehabilitation projects in practically every one of North Carolina’s 100 counties, from the mountains to the coast. While historic preservation often focuses on aesthetics, a story in Sunday’s Post explained how important the tax credit has been to economic development here and in other communities across the state, bringing in $1.4 billion in private investment. A study by UNC-Chapel Hill researcher Rebecca Holton found that, between 1998 and 2008, North Carolina’s historic tax credit helped create more than 23,000 new full-time jobs.
Some of those jobs were in the construction and building supply industries, obviously. Yet a look around Rowan County shows the diversity of more than 70 income-producing projects undertaken with the help of these credits — from banks to B&Bs, cigars to best-sellers, pottery shops to theater buildings. As traditional manufacturing communities have struggled with economic transitions, there’s a wealth of research showing how many have benefitted from the tax credit program, which provides a 20 percent state tax credit on qualifying projects, mirroring the national program that provides another 20 percent credit on federal taxes.
Yet, under reforms approved by the N.C. legislature, the state historic tax credit will expire at the end of 2014. Legislators set out to simplify the tax framework, lower overall rates and reduce loopholes and special-interest exemptions. Those are goals many taxpayers support. But when it comes to ending the historic tax credit, there’s a paltry payoff — about $14 million a year in new revenues — compared to the hundreds of millions in new investment secured with the help of these credits. These programs are not corporate “giveaways” but incentive programs that reap far more in private investment that they cost in tax dollars, typically aiding small entrepreneurs while spreading benefits throughout entire communities.
Although the state historic tax credit is scheduled to go away under current law, preservationists and economic development officials are pleading for the credit to be preserved. Supporters include N.C. Department of Cultural Resources Secretary Susan Kluttz, who as Salisbury mayor had a front-row view of the transformations these tax credits have helped create. She plans to press the case for their continuation with Gov. Pat McCrory. He and our state legislators should listen up. These credits aren’t simply about preserving historic buildings but creating jobs, new businesses and expanding local economies.