In December 2011, the Idaho Statesman featured an op-ed asking readers to imagine a federal program designed to spur billions in private investment in distressed communities, but only a few million was invested in Idaho.
The op-ed, Idahos missing out on some investment tax credits, written by Stephen R. Miller, an associate professor at the University of Idahos College of Law, was describing the New Markets Tax Credit (NMTC) program. Miller challenged public and private entities to organize themselves, so Idaho communities could take advantage of this investment tool.
When professor Miller wrote his op-ed piece, $26 million had been invested in Idaho through the NMTC program. Two years later, the number is closer to $37 million.
While this is less than has been invested in other states, the businesses fostered through these investments have created hundreds of jobs in some of the communities hit hardest by the economic downturn. And Idaho, along with a few other states, is still considered underserved in NMTC investments.
We are just getting started with the NMTC program in Idaho, and we need it to continue. However, with Congress set to address tax reform in the fall, many in Idaho are worried that this new engine for economic growth will get lost in the overhaul.
Since its authorization in 2000, the NMTC has provided a modest incentive for private investments in businesses and economic development projects in economically distressed rural and urban communities.
As executive vice president of Idaho-Nevada Community Development Financial Institution, an organization which finances affordable housing and small business throughout the state, I worked to bring NMTC financing to Idaho by partnering with the state Department of Commerce, several regional and national banks, and an established community development entity, Montana CDC, that had effectively secured millions of dollars in financing for businesses in our neighboring state.
Fortunately, both Sens. Mike Crapo and Jim Risch had the opportunity to learn more about the impact of NMTC investments in Idaho over the summer.
Sen. Crapo met with several of our partners in Lewiston last month to hear how NMTC financing has been invested in capital-starved communities to grow businesses, create jobs and generate wealth. A week later, several of Sen. Rischs staff had the opportunity to visit the Kootenai Medical Center, an NMTC-financed business in Coeur dAlene, and hear how the NMTC made the expansion of this primary care facility financially feasible.
The Kootenai Medical Center is a great example of how the NMTC has helped our state. The Mill River neighborhood in Coeur dAlene lacked adequate medical facilities, so in 2012, Montana CDC helped provide $11.3 million in NMTC financing to support the expansion of Kootenai Medical Center and improve healthcare access to North Idahoans in an area where more than one in three live under the poverty line.
The project, set for completion this October, created 98 construction jobs and will result in as many as 110 permanent jobs for community residents.
The new jobs and expanded businesses created through the NMTC generate new tax revenue, which helps cover the cost of the program. Currently, there are $598 million in planned business expansions and community revitalization projects on hold in the state awaiting NMTC financing. These projects will not happen if Congress does not vote to extend this critical tool, which is set to expire at the end of this year.
As Congress builds the framework for a more simplified and efficient tax code, we hope they will include the nuts and bolts like the NMTC that help to strengthen and hold our nations economy together.
Chuck Prince is the executive vice president and chief operating officer of the Idaho-Nevada CDFI Inc. and a member of Montana CDCs New Market Tax Credit advisory committee.