By David Hotle, The JOURNAL
Even though a proposal to remove federal historic tax credits from the budget has passed the U.S. House of Representatives, the Washington City Council voted recently to support keeping the credits in the budget.
During a previous meeting, Main Street Washington director Sarah Grunewaldt warned the council that both federal and state historic tax credits were in danger of being eliminated. She said the credits are ?valuable tools? that communities have used to renovate historic buildings. She said the projects that use the tax credits are difficult to develop in general and the credits give an added incentive to make the projects move forward.
?Congressman (Rod) Blum, who is championing it in Iowa and nationally is not giving up,? Grunewaldt said. ?He still is pushing. Congressman (Dave) Loebsack is also on board. It is really the Republicans that we are focusing on because they are the ones eliminating it and Democrats are on board.?
She stressed that the fight is not over and there are still some steps the removal of the credits have to go through before it becomes a law. She also warned that the opponents of the credits ?have the pedal to the floor on this.? She said the House wants the removal made law by Thanksgiving and so does the Senate.
Grunewaldt said there are upcoming meetings with Sen. Chuck Grassley by people who regularly use the tax credit, including Main Street directors from all over the country. She encouraged council members to contact elected officials and support keeping the tax credits in the budget. She also said on the surface it seems like an expense, but it is really an income item, with general funds receiving more back from the credits than are given out.
The tax credits are given as an incentive to preserve historic buildings. Grunewaldt commented that the credits actually return more money to the treasury than it costs. According to a study done by the National Park Service, since its inception $25.2 billion in tax credits have generated $29.8 billion in federal tax revenues. She also said since its inception, the program has attracted $131 billion in private capital to revitalize properties.
?It is the only federal tax credit on the books that actually pays out less than it brings back in afterward,? she said. ?By doing these projects you are putting these buildings into more service and ultimately there is more income tax coming back in at the federal level because those projects happened than if those buildings sat vacant.?
So far, Grunewaldt said, only one project using federal historic tax credits has been done in Washington, which is the revitalization of the State Theatre. She said she is working on several other projects she promises ?will not happen? without the credits. She said these include possible future redevelopment of the former Captain?s Table building, or the former calendar factory or the former Goncho Apartment building.
She also said there are other historic buildings in Washington that can be rehabilitated. She said the entire downtown is classified as a historic district. She also said over 40 percent of projects financed by tax credits are located in communities with less than 25,000 people.