So far the General Assembly is not buying the modest tax credit for historic rehabilitation included in Gov. Pat McCrory’s proposed budget. That’s an ominous development for historic structures around the state.
The current state historic tax credit of 20 to 30 percent will expire at the end of 2014. If lawmakers don’t act to extend the credit or approve McCrory’s proposal, the state’s highly successful drive to save and reuse historic structures will slow down if not stop.
In Rowan County alone, 48 projects have taken advantage of the credit since 1998, spurring some $21 million in investment. In fact, Rowan ranks fifth among the state’s 100 counties in the number of projects that have used preservation tax credits since 1976 and 10th in the amount of money invested in relation to tax-credit projects. Instead of boasting carefully restored buildings, downtown Salisbury and several neighborhoods would be ghosts of themselves without those credits.
Why end the credits? The legislature is opting for a simplified tax framework without exemptions for special interests, something most voters would agree with in theory — until they look at the numbers. 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.
McCrory tried compromising on the issue, keeping the tax credit alive with a different formula — 10 to 15 percent — in a new Historic Rehabilitation Investment Program, and outlining matching grant funds for smaller N.C. towns under the Main Street Solutions Fund. But the Senate budget does not include rehab tax credits, and it’s not looking good for the credits in the House budget.
Historic preservation will not end with the tax credits’ sunset, but it will proceed at a slower pace and with less ambitious projects. One purpose of the tax credit was to even out construction costs between old and new buildings, thereby encouraging adaptive re-use of buildings.
Rowan County’s representatives in the state House should hear from constituents on this issue. They are:
• Rep. Carl Ford, 919-733-5881, email Carl.Ford@ncleg.net
• Rep. Harry Warren, 919-733-5784, email Harry.Warren@ncleg.net.
The House is expected to pass its budget by the end of the week. Don’t delay in making your voice heard.