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In 1981, President Ronald Reagan significantly expanded an innovative program to draw investment to the rehabilitation of older properties, now known as the federal historic tax credit. He was so impressed with the program’s success, he made it a permanent part of the tax code in 1986. Actually, nothing is permanent, as Congress is about to change the code. That’s the current dilemma in the throw everything out new tax proposal. Much good about to be thrown away with the some bad. That’s going to hurt the Valley.

On September 14, 1984 at the Conference for Revitalizing America’s Towns President Reagan said this about historic tax credit legislation that encouraged historic preservation and economic development in small towns.

“I’d like to draw your attention to a major innovation that our administration put into effect less than 3 years ago. Increased tax credits for the renovation of older buildings. With that one initiative, we have help send your tax dollars back into your communities. Across America people are getting the message, our tax credits have made the preservation of our older building not only a matter of respect for beauty and history, but of economic good sense. I know your effort will give our towns more restored buildings, more jobs, and renewed sense of pride. And that will be good for our entire nation. But while our country’s muscle may lie in our great industrial cities, America’s heart is in our small towns.”
Water Valley came late to the economic development through historic preservation realization. But we have been on steady (and much noticed) revitalization trajectory since. Thirty-five commercial buildings in the downtown district stock of 110 have been renovated. Ninety new jobs downtown, twenty-six new businesses, and $10 million in private money invested in downtown. The overall effect has helped bring surrounding neighborhoods back, significantly increasing value in town and adding revenue to the city’s coffers.

A major tool in the small town economic development effort, the federal historic tax credit, the very one President Reagan thought so highly of, is about to be killed by the coming tax bill. It is cut off your nose to spite your face move. Not only does the historic tax credit help fix small towns, it returns more money than it costs. The tax credit works like this. First you must fix the building to a certain quality and quantity of work. Then apply for the credit.  And only then can you apply the credit against federal tax you owe. We have used these credits efficiently and effectively in Water Valley.
Since President Reagan delivered these remarks more than 30 years ago over 42,000 buildings have been restored, with $130 billion (that’s right billion) private capital invested, and 2.5 million jobs created. For every dollar of credit, a $1.20 has been returned to the Treasury. It makes money for every taxpayer, a steady 20 percent return on every public dollar spent.

Since that time, the federal historic tax credit has played a critical role in revitalizing small towns and cities, creating jobs, and increasing economic activity, all while returning more tax revenue to the Treasury than it costs.
Congress is finalizing tax reform legislation, but has failed to retain the historic tax credit. It is a major mistake and will dramatically hurt Water Valley and small towns across America.

In March of this year I was in Washington DC advocating in Congress for development in Water Valley. Meeting with Mississippi’s senators and congressmen. There is a bill in Congress that Mississippi wholehearted supports, both Mississippi senators and all 4 representatives have signed on to support this bill (S425/HR1158). This would make the historic tax credit more small business and Main Street building friendly. So, Mississippi still believes in small towns. The current tax cutting measure runs counter to what has been working so well in Water Valley.

Call your senators and representatives and remind them how important this is. They should tell their colleagues. Main Streets and small businesses don’t get much encouragement or incentives like big industries. These credits are proven performers.

Join us in urging Congress to continue this important legacy and keep the tax credit in any reform of the tax code. ACT NOW:

See the short video on YouTube, search “National Trust for Historic Preservation Historic Tax Credit Makes Economic Good Sense”. Water Valley is one of the towns pictured in it.

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