Brown Releases List of Ohio Communities That Have Benefited From New Markets Tax Credit Funding
WASHINGTON, D.C. – Today, U.S. Sen. Sherrod Brown (D-OH) held a news conference call to announce his first of its kind legislation that would incentive manufacturing investment in local communities hit hard by major manufacturing job loss. Brown outlined details of the Manufacturing Communities Investment Act, new legislation which would build on the proven success of the New Markets Tax Credit (NMTC). NMTC incentivizes community developers to invest in low income areas. Brown’s bill would spur local job creation by extending and enhancing the NMTC to allocate additional dollars for investment in struggling manufacturing communities.
“In Ohio, we know that manufacturing has been a ticket to the middle class,” Brown said. “And one of the reasons why our manufacturing sector is growing is the success of the New Markets Tax Credit. But despite this progress, there are still too many manufacturing communities struggling since the Great Recession. We should apply the proven principles of the New Markets Tax Credit to help these communities. The Manufacturing Communities Investment Act would spur manufacturing investment to help create jobs and replace those that communities lost.”
The NMTC expired after 2013, but between 2003 and 2012 the program drove $60 billion in private investment while creating more than 550,000 private sector jobs. The Manufacturing Investment Act would build on this model by extending the NMTC for an additional three years; increasing its annual allocation from $3.5 billion to $5 billion; and providing for an additional $1 billion a year in 2014, 2015 and 2016 for manufacturing investments in communities which have suffered major manufacturing job loss.
Nearly 15 percent of NMTC projects have been in the manufacturing sector, leveraging more than $2.5 in private sector investment for every tax credit dollar. This has helped the U.S. manufacturing sector add jobs for the first time since the 1990s. Since December 2009, in fact, the manufacturing sector has added more than 500,000 jobs to the U.S. economy. But too many manufacturing communities are still struggling since the worst economic crisis since the Great Depression. They are burdened by shuttered plants, diminished tax bases, and a lack of investment capital. Brown’s Manufacturing Communities Investment Act would help these communities by aiding the growth of new manufacturing investments to help replace jobs that they lost during the “Great Recession.”
Joining Brown to discuss the importance of extending the NMTC and creating new tax credit opportunities was Mayor Glenn Broska of Streetsboro, a Portage County city that could be eligible for funding under Brown’s legislation. Last year, Streetsboro lost 300 jobs after Commercial Turf Products Ltd. shut its doors.
Brown was also joined by Jeff Hoagland, the President and Chief Executive Officer of the Dayton Development Coalition, a regional economic development and advocacy organization. Dayton received NMTC funds to build the Electrical Power Integrated Systems Center (EPISCenter), an aviation development center which created more than 800 local jobs.
The NMTC Program was established in 2000 with the goal of spurring revitalization efforts in low-income American communities. It achieves this by providing tax credit incentives to Community Development Entities (CDE) with a primary mission of investing in low-income communities. Under the program, CDE apply to the U.S. Treasury Department for the authority to raise a certain amount of capital, also known as Qualified Equity Investments (QEI), from investors. Awardees are then given a tax credit that equals 39 percent of their investment output over the span of seven years: 5 percent in each of the first three years and 6 percent in the final four years.
Immediately following the press call, Brown released a list of Ohio communities that have benefited from the NMTC and could be eligible for future funding if the tax credit was extended and strengthened.
Among those endorsing Brown’s legislation is the: Akron Chamber of Commerce, Alcoa, City of Dayton, Dayton Development Coalition, Development Finance Authority in Akron, Finance Fund in Columbus, MAGNET (which represents manufacturers in Northeast Ohio), Toledo Port Authority, Youngstown Chamber, Western Reserve Port Authority in Youngstown, and the nationwide New Markets Tax Credit Coalition.
Brown has been described as “Congress’ leading proponent of American manufacturing” and authored the Revitalize American Manufacturing and Innovation Act (RAMI) with U.S. Sen. Roy Blunt (R-MO). Their bipartisan bill would create a National Network of Manufacturing Innovation (NNMI) to bring together industry, universities and community colleges, federal agencies, and all levels of government to accelerate manufacturing innovation in technologies with commercial applications. It would establish public-private institutes to leverage resources to bridge the gap between basic research and product development. Brown’s bill would particularly benefit a state like Ohio which has nearly 650,000 manufacturing jobs, third most in the United States.