Maryland’s State Historic Tax Credit is a Ready-Made Tool for Economic Recovery

05/04/2020
By Elly Colmers Cowan

Maryland’s historic tax credit is a ready-made tool for economic recovery in the wake of the coronavirus pandemic. Preservation Maryland is hard at work to ensure that the Historic Rehabilitation Tax Credit remains funded for FY21.

In light of the immense challenges facing Maryland’s economy in the coming months and years, the importance of Maryland’s Historic Revitalization Tax Credit to the financial recovery of the state cannot be overstated.

Since its creation in 1996, this 20% tax credit program for the rehabilitation of historic structures has invested over $400 million in brick-and-mortar commercial redevelopment projects across nearly every jurisdiction in the state, created nearly 30,000 jobs, and yielded nearly $3.5 billion in economic activity.

As the state is faced with a staggering decrease in tax revenues, it’s worth noting that the state Historic Revitalization Tax Credit generates positive revenue for the state and increases local property tax revenues. When buildings are rehabilitated, they pay more in local taxes which support better schools, roads, and healthcare without the need for more state dollars.

A recent Abell Foundation economic impact study of the state historic tax credit found that for every $1 of tax credits invested, the state saw a return of $8.13 in economic activity.

According to the same study, on average, every $1 million worth of state investment in the program creates nearly 50 jobs during the construction period. With the program currently funded at $9 million, as of the recently passed FY21 Budget, there is potential for the state to see a return on investment of over $73 million, 450 jobs created, and over $3 million in state and local tax revenues.

These job-creating tax credits have fueled real and lasting economic growth all across Maryland. They invest in real, tangible projects and improve the economies of the communities where they are invested. The projects it invests in are rooted in our communities. They cannot pick up and move out of state. They also provide real, permanent jobs at a time when employment is a top priority.

As we move toward reopening the state, such a strong tool for both economic and community revitalization should not be overlooked or underestimated.

Indeed our own Lt. Governor Rutherford has heralded the historic tax credit program as, “one of the most effective investment tools for strengthening Maryland’s local economies.

Now would not be the time to hamstring a program that has the potential to do so much good in every corner of the state. This tax credit is not a handout – it is an investment in Maryland’s communities and economy when they need it the most.

ACcess the Abell Report on Historic Tax Credits

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Elly Colmers Cowan · Director of Advocacy

Elly Cowan is here to get you involved in historic preservation, smart growth, and community development by becoming an advocate with us.

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