Neal S. Wolin
Yesterday, I visited New Orleans to announce $3.6 billion in New Markets Tax Credit awards to 70 community development organizations nationwide. In low-income communities in Louisiana and across the country, New Markets Tax Credits help jumpstart economic development by incenting private investment in specialized community financial institutions, known as Community Development Entities. These important organizations provide financing to support projects like charter schools, grocery stores, and health clinics critical to economic growth in low-income communities.
In Louisiana, five organizations received awards for a total tax credit allocation authority of $295 million. Since 2003, more $1.6 billion in New Markets Tax Credits have been invested in 160 projects across the state, with $1 billion targeted towards helping low-income communities rebuild and recover from the damage caused by Hurricane Katrina. Including yesterday’s awards, $33 billion in New Markets Tax Credits has been allocated nationwide since the program’s inception in 2000.
In the Lower 9th Ward – where more than 4,000 homes were destroyed by Hurricane Katrina – I saw first-hand how New Markets Tax Credits are helping displaced families return to their neighborhoods. Thanks in part to $5 million in New Markets Tax Credits, the Make It Right organization is building at least 150 affordable, flood-resistant, and energy efficient houses for families who lost their homes in the storm.
In the afternoon, I joined Senator Mary Landrieu, Representative Cedric Richmond, and CDFI Fund Director Donna Gambrell at Federal City to announce the latest round of New Markets Tax Credits awardees. Federal City is being developed in the Algiers neighborhood on the former grounds of the Naval Support Activity New Orleans, which was the largest military installation in the greater New Orleans area until closing last fall. With strong public-private collaboration and help from New Markets Tax Credits, Federal City is expected to ultimately employ more than five times the number of people that worked at Naval Support Activity New Orleans.
The tangible results of the New Markets Tax Credits that I saw in New Orleans are strong proof that this program makes a real difference. With an economy still recovering from the worst recession in generations, which has exacerbated the challenges low-income communities already face, this program is more important than ever.
That’s why the President’s budget proposes extending the New Markets Tax Credit program through 2013 and raising the total award allocations to $5 billion. Given the proven success of this initiative and the lingering effects of the recession on low-income communities, Congress should not wait to take action.
The President’s budget included another important idea that could have a significant impact in New Orleans and across the country – a new Manufacturing Communities Tax Credit. If enacted into law, this credit would provide $6 billion over three years to help communities recover from economic disruptions like the relocation of a manufacturing plant or a military base closure.
We think these are good ideas and good investments. They would strengthen the set of tools we have to help low-income communities overcome their unique challenges, in addition to strengthening our economy overall.
Neal S. Wolin is Deputy Secretary of the U.S. Treasury.
Deputy Secretary Wolin discussed the New Markets Tax Credit on WWL Eyewitness Morning News in New Orleans on February 23, 2012. You can watch the interview here.