Historic stimulus

Our view: State's historic tax credit program should be renewed in its original form

March 04, 2009

It promotes economic development, preserves historic buildings, encourages Smart Growth and promotes the greening of America. Maryland's historic tax credit program has contributed to the rehabilitation of so many commercial developments in downtown Baltimore and other areas of the state that supporters say it served as a local stimulus package before there was a need for a federal one. This program, which has suffered under legislative tinkering, is again before state lawmakers. It should be renewed for another five years and as it was originally conceived. Changes to the program, including a cap on total expenditures and Baltimore's participation, have undercut its benefits.

The program has been a great incentive for developers to rehabilitate and revitalize historic buildings in areas of downtowns that were tired and underused. Many successful rehabs are now anchoring the city's west-side renaissance, and similar projects have revitalized areas of Cambridge, Cumberland, Hagerstown and Frederick.

Del. Sheila E. Hixson, whose committee is reviewing the program, should know that the tax credits don't only benefit blighted urban centers. One beneficiary is located right near her Montgomery County district: The National Park Seminary development just outside Silver Spring is a complex of eclectic, historic buildings that have been renovated into condominiums and new homes with price tags that exceed half a million dollars.

Legislation to renew the program, slated to end in 2010, would provide $100 million in tax credits over five years. Constraints on the program and an attempt to ensure that all parts of the state benefited saw a decline in projects from 75 and $303.9 million in rehab work in 2001 to 20 worth about $32.8 million in 2005. It didn't have to be that way.

A study by the Abell Foundation found that the program generates $8.35 in economic output for every dollar of tax credit. That's an economic generator that should be promoted, not discouraged.

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