Imagine a state-funded development program that has attracted nearly $1 billion in direct private capital to Rhode Island already, with another half a billion on the sideline, approved but not yet invested.
According to at least one set of calculations, this program has generated $2.5 billion in economic activity in the state to date.
Of course, like any development program, there is a cost. In this case the cost is in tax credits that so far come close to $300 million, yielding a return on investment of roughly 800 percent.
If you are thinking that this program is too good to be real, you are partly correct. It was shut down in 2007 (allowing for existing projects to be grandfathered in, with certain restrictions), a victim of the state’s massive budget deficits.
But momentum is building to bring the historic-preservation tax-credit program back, albeit it in a modified form.
The state, thanks to a number of cost-cutting and reform measures (including the much ballyhooed pension reform), is not in as bad a fiscal situation as it has been, but it’s nowhere near out of the woods. Thus, restoring a credit program that eats a hole in the state’s budget is a difficult sell. But it’s a sale that needs to be made.
With the state’s unemployment crisis weighing down its ability to recover from the Great Recession, this is one program that is guaranteed to put people to work (and generate income tax and sales tax revenue during construction, by the way, while also cutting back on public- support payments).
The bill being put forward by state Rep. Jeremiah O’Grady, D-Lincoln, is a good place to start restoring this much-needed program. •
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