About an hour outside New Orleans, in Tangipahoa Parish, a new long-term care facility is being built. This development answers a call to bring senior services closer to the populations in need and helps anchor economic development in one of the poorer parts of Louisiana. The median household income in Tangipahoa is 23 percent less than the US median, and the parish’s poverty rate is 50 percent higher than the U.S. average.
This is a modest project, creating 70 to 100 construction jobs and then 118 full-time and 47 part-time jobs for running the facility, which will serve up to 136 patients. And yet the progress it represents is endangered as Congress wrestles with the federal tax bill on Capitol Hill.
We helped finance Camelot of North Oaks this year through $9 million in New Markets Tax Credits (NMTC), a federal program that offers private investors a tax incentive for investing in businesses or economic development projects located in the nation’s highest-need communities. This program helps developers leverage those investment dollars to bring in more capital from other sources and to support job creation.
In Louisiana, 232 businesses and economic revitalization projects have received NMTC financing over the program’s lifetime. Between 2003 and 2015, $2.5 billion in NMTC allocations leveraged an additional $2.6 billion from other sources for a total of $5.1 billion in project investments. The economic impact? 61,795 jobs throughout the state.
But the tax bill passed by the U.S. House in early November would terminate the NMTC immediately. The U.S. Senate bill that passed on Dec. 1 would preserve the program for its final two years but other provisions in the bill would devalue the tax credits to the point where their investment value is significantly lessened.
It is critical that the NMTC program be preserved and permanently extended. Nationally, Congress is jeopardizing $14 billion in total project financing at risk — including $2.8 billion for rural areas. It also risks the estimated 170,000 jobs those investments would generate around the country.
Here in Louisiana, this is a program we cannot lose. These tax credits were a linchpin in the Hurricane Katrina recovery effort. Federal efforts to regenerate the Gulf Coast economy in Louisiana, Mississippi, and Alabama tapped more than $2 billion from the NMTC program to leverage additional financing.
For example, some of that financing was applied to The ReFresh Project, a development along the Broad Street corridor in New Orleans that focuses on food, nutrition, and community health.
CrescentCare, a community health center in New Orleans, started construction this year. The project in the 7th ward, being developed by Gulf Coast Housing Partnership, will consolidate four separately leased facilities into a new, 65,250 square-foot building that will provide medical and pediatric primary medical care and other services while securing 450 full- and part-time jobs.
Just as the tax credits are used to leverage additional financing, these projects leverage additional redevelopment. Anchor projects help stimulate local economies, and economic recoveries move from theory into reality. We see this in New Orleans, and we see it outside of the urban centers — as with the Camelot of North Oaks long-term care facility.
We need Louisiana’s delegation in Congress to stand strong on preserving NMTC authority for at least two more years, and to ensure that the value of the credit is preserved. We need the New Markets Tax Credit program to strengthen — and complete — our economic recovery.
Mary Elizabeth Evans is senior vice president for community and economic development at Hope Enterprise Corp. in New Orleans.