Senate Finance Committee Highlights Impact of New Markets Tax Credit Program on Low-Income Communities

The New Markets Tax Credit (NMTC) program's role in stimulating private investment in low-income communities was the focus of a recent Senate Finance Committee hearing, highlighting its bipartisan support and significant economic impact. Established in 2000, the NMTC program has been extended eight times, with its current authorization providing $5 billion in annual allocation authority until 2025. Committee Chairman Senator Ron Wyden (D-OR) and Ranking Member Senator Mike Crapo (R-ID) praised the program's flexibility and effectiveness in attracting investments across all 50 states, benefiting projects like healthcare facilities and affordable housing.

Julia Nelmark, President & CEO of Midwest Minnesota Community Development Corporation, testified on the program's achievements, including over $135 billion in financing to more than 8,500 projects and the creation of 1.2 million jobs. The program's cost-effectiveness was also highlighted, with NMTC-generated economic activity in 2015 resulting in a $113 million return on investment for the federal government. Discussions at the hearing included the potential for making the NMTC permanent, a move that could reduce costs and improve planning for Community Development Entities and investors.

The NMTC's support for various sectors, including manufacturing and community facilities, demonstrates its versatility in addressing critical infrastructure needs in underserved areas. With the program's authorization set to expire in 2025, the hearing's discussions may influence its future, offering stability and support for economic development in America's most challenged communities.