Advocates of historic preservation made a pitch Monday for an expanded tax credit program to help developers invest in older buildings – particularly in small downtowns.
Marsh Davis, president of Indiana Landmarks, told lawmakers that the state’s current Historic Preservation Tax Credit program doesn’t work because a backlog means investors who complete projects today can’t claim the financial incentive for at least a dozen years.
“We don’t even talk about the state credit anymore because we consider it totally dysfunctional,” Davis told the Commission on State Tax and Financing Policy during a meeting Monday at the Statehouse.
The problem is that the tax credit is capped at $450,000 a year, Davis said. And because the demand is much greater, there’s a waiting list to claim the credits.
That means investors of projects approved for the program can’t recoup their money for a dozen years. Supporters of a program expansion say that gives few incentives for investors to restore historic properties.
Rep. Ed Clere, R-New Albany, has been working to expand the program for several years. On Monday, he told the tax commission that raising the cap and dedicating some of the money for projects in rural areas would help reinvigorate preservation in the state.
“I really believe – especially going into our (Indiana) bicentennial in 2016 that the time is right to make this tax credit functional again,” Clere said.
Earlier this year, the House passed legislation to expand the tax credit. But so far, senators have not been amenable to the proposal. Senate Tax Chairman Brandt Hershman, a Buck Creek Republican who leads the study commission, said Monday he’s not sure the credit is actually spurring much development, especially because a federal tax credit is also available.
But Davis said the proposed changes are geared at smaller projects in smaller communities that might not qualify for the federal program or might be too low-budget to make the expense of seeking the federal credit worthwhile.
“This hits the Main Street component of Indiana we’re trying to reach,” he said.
The Commission on State Tax and Financing Policy is studying a number of state tax credits before the 2014 session General Assembly and could make recommendations for legislation later this year.