The House recently breathed new life into an expiring tax credit for renovating historic buildings in Ohio, but preservationists are hoping to convince the Senate to make the program more robust.
Under the House’s version of the $55.6 billion biennial budget (HB 153), the Historic Building Rehabilitation Tax Credit, which was set to expire in July, would become permanent. However, the cap on the program is set to decrease from the current $60 million to $25 million a year.
The tax credit, which is claimed against the personal income, corporate franchise, and dealers in intangibles tax, could reduce state tax revenues in fiscal year 2013 slightly, but the full impact will likely occur after the next biennium, according to a Legislative Service Commission analysis.
Any revenue loss to the general revenue fund would also decrease the amount of tax revenue flowing to counties and local governments through the Local Government Fund and the Public Library Fund, LSC said.
Proponents say demand for the tax credit is outstripping the current $60 million limit and asked the Senate Finance Committee during a recent hearing to go one step further and increase or remove the House’s proposed $25 million a year cap.
Joyce Barrett, of Heritage Ohio, said research by Cleveland State University found the tax credit generates $0.31 back to the state before $1 is paid out when a project is completed.
“The historic preservation tax program is a critical part of Ohio’s economic recovery and the jobs that will be created by this and other elements of the budget bill,” she said in testimony.
Duane Van Dyke, president of Van Dyke Architects in Cleveland, said renovating historic buildings helps attract educated youth and entrepreneurs that help revitalize urban areas.
“You want to attract high tech companies to Ohio? Then you need to have rehabbed, turn-of-the-century factories with exposed brick and wood floors, not a suburban office park with a sea of parking surrounding it,” he said, adding Ohio may have the third most historic buildings in the U.S.
Every $1 million in historic preservation tax credits generates $8 million in construction spending, 80 construction jobs and has a total economic impact of $32 million and 300 jobs, he said. The state tax program was also matched by 75% in private investment and federal tax credits.
“Buildings that would have remained empty, non-income producing, non-tax-paying blight are now contributing again,” Mr. Van Dyke said.
Steve Coon, of Historic Developers, LLC, said the state and federal tax credits helped him finance a renovation project in Hamilton when banks stopped lending during the financial crisis.
“Without this, not only would I have not been able to develop in these extreme times, the City of Hamilton would have lost a great opportunity to revive their core downtown,” he said.