WASHINGTON, June 30, 2020 /PRNewswire/ -- The New Markets Tax Credit Coalition today released its 2020 New Markets Tax Credit (NMTC) Progress Report, the sixteenth edition of the report—providing analysis of NMTC activities in 2019 as well as a special insert commemorating the 20th anniversary of the NMTC. An interactive, online toolkit included in the report highlights the nearly 6,400 projects financed by the NMTC since 2000.
The report showcases the importance of the NMTC in providing two decades worth of patient, flexible capital to businesses and projects located in distressed rural and urban communities, thereby creating jobs and growing business opportunities. The NMTC financing ranges from more traditional industry and community sectors to new and cutting-edge technology. Projects and businesses that benefited from the Credit in the past year include manufacturing, healthcare, schools and many supporting childcare, youth, and families.
The report was prepared for the NMTC Coalition, a national membership organization of Community Development Entities (CDEs) and investors organized to advocate on behalf of the NMTC. Every year since 2005, the NMTC Coalition surveys CDEs on their work delivering billions of dollars to businesses, creating jobs, and rejuvenating the parts of the country that have been left behind. The annual NMTC Progress Report presents the findings of the CDE survey and provides policymakers and practitioners with the latest trends and successes of the NMTC.
"The Coalition's annual survey asks CDEs to report on the deployment of their allocation, investor trends, and a variety of community impact metrics," said Yvette Ittu, NMTC Coalition Board President and the President of Cleveland Development Advisors, a CDE in Cleveland, Ohio. "The findings clearly demonstrate the continued improvement and refinement of the program's efficiency and impact in low-income communities. Two decades after its introduction, the NMTC is no longer simply just a tool for delivering investment – instead, it has become one of the federal government's most effective tools for job creation and economic stabilization."
Sixty-five CDEs participated in the 2020 survey and provided data on their progress raising capital, lending, and investing in 2019 with the NMTC. The survey findings show that competition for credits continues to drive gains in efficiency. The data collected shows that CDEs used $2.7 billion in NMTC allocation in 2019 to finance 288 NMTC projects, amounting to $4.5 billion in total project investment to low-income communities. This financing resulted in the creation of 57,414 total jobs including 35,440 permanent full-time-equivalent jobs and 21,973 construction jobs.
"Year after year, the data shows the NMTC not only delivers an unprecedented level of capital to low-income rural and urban communities, but it also creates much-needed jobs—helping individuals and families thrive and, in turn, grows those local economies where they live and work. In fact, since 2003 the NMTC has created over one million jobs. Communities that were already struggling have been hit hard by the COVID-19 pandemic and need this important incentive for community revitalization now more than ever," said Coalition spokesperson Bob Rapoza.
Across 48 states and territories, CDEs rehabilitated or constructed 15.1 million square feet of space in 2019, thanks to NMTC financing. NMTC financing supported 232 manufacturing and industrial businesses with loans for working capital, new equipment, and 7 million sq. ft. of new space, often through incubators and multi-business facilities, creating over 11,000 manufacturing jobs.
Furthermore, there were 1.7 million people served by NMTC-financed community facilities including 1.1 million patients in healthcare facilities and 116,000 children in childcare, schools, recreational facilities, mentorship programs, and other youth-related social services. Fifty-five percent of mixed-use projects included at least one community facility, nonprofit, or social service component. Those new community resources add up to over 300 nonprofit facilities, health centers, childcare centers, libraries, community centers, and other community facilities. Additionally, 86 percent of projects were in severely distressed communities.
The report profiles NMTC financed businesses, including a women's and children's center in Baltimore, MD, a non-profit office space and community food center in Denton, TX, and a teen center in Belle Grande, FL, and it describes the impact of the NMTC in native communities in 2019.
Rapoza notes, "The authorization for the NMTC is set to expire yet again as the end of this year. This report is further proof that the Credit is working and Congress should expand and make the NMTC permanent."
There is currently bipartisan legislation in Congress aimed expanding the allocation level and investor base of the NMTC as well as making it permanent. The NMTC Extension Act of 2020, H.R. 1680 in the House and S. 750 in the Senate. There are presently 37 Senators signed on in support of S. 750, which was introduced by Senators Roy Blunt (R-MO) and Ben Cardin (D-MD). H.R. 1680 has 126 cosponsors and is led by Reps. Terri Sewell (D-AL) and Tom Reed (R-NY).
In addition, the House is debating on the floor this week a proposal to modernize America's infrastructure, H.R. 2, the Moving Forward Act, which includes a permanent extension and expansion of the New Markets Tax Credit (NMTC) at $5 billion in annual allocation with additional Credits provided over the next three years to help communities combat the economic downturn.
About New Markets Tax Credit Program the New Markets Tax Credit (NMTC) was enacted in 2000 in an effort to stimulate private investment and economic growth in low-income urban neighborhoods and rural communities that lack access to the patient capital needed to support and grow businesses, create jobs, and sustain healthy local economies. Since its inception, the NMTC has generated more than one million jobs. Today due to NMTC, more than $95 billion is hard at work in underserved communities in all 50 states, the District of Columbia, and Puerto Rico. For more information, visit www.NMTCCoalition.org.