Summer reading

March 17, 2003

MARYLAND'S HISTORIC rehabilitation tax credit program is such a proven economic development tool that the General Assembly must take great care not to harm it.

There's no need for lawmakers to try to hastily fix two problematic bills currently before them.

A far better approach is to assign them to summer study. Constructive changes can then be more thoughtfully made to strengthen the 6-year-old program.

As originally drafted, the two bills attempted to snuff the program out of existence in June. Subsequent amendments - some good, some not - have been offered to keep it alive. But that can be achieved by doing nothing now. The program is up for review next year, anyway.

Enacted in 1997, the historic tax credit has been among Maryland's most successful incentives. Some 750 old buildings - from decrepit landmarks to crumbling residences - have been restored throughout the state. Thousands have been employed on those projects, from architects to construction workers. Thousands more are now employed in offices and shops occupying renovated spaces.

Despite this heady economic impact, the program's costs have many legislators worried. Also, most of the big restoration projects have occurred in Baltimore, prompting grumbling from other localities that the historic credit is just another parochial subsidy program favoring a single jurisdiction.

Such a narrow view is not justified. Historic tax credits have benefited other parts of Maryland as well, Cumberland in particular. But it's also true that most eligible historic properties are in Baltimore - badly deteriorated and needing whatever help they can get for expensive repairs.

Do the criteria for historic tax credits need tightening? Perhaps.

There have been instances where substantial work was started before application for credits, suggesting they weren't really needed and the rules may be too broad.

Similarly, tax-exempt commercial structures currently qualify for tax credits. That's a sweet deal for owners who sell the credits to investors but not for the state or local governments, which get little in return.

Such loopholes need to be plugged, and that can easily be done next year after a careful examination of the program this summer and fall. But the need for tweaking should not be used as an excuse to kill or damage an economic development tool that has more than justified itself by returning so many lovely old buildings to productive use.

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