By Jessica Wray
The Statehouse File
INDIANAPOLIS – Advocates of preservation told lawmakers Thursday that expanding a state tax credit could lead to the redevelopment of more historical properties for public use.
Rep. Ed Clere, R-New Albany, told the House Ways and Means Committee that his House Bill 1111 is not just about preserving historical landmarks.
“It’s really a jobs bill,” Clere said. “It’s a bill that will benefit historical preservation through the state while also incentivizing investment and economic development and creating jobs. This is a way we can use existing resources to create jobs and benefit communities throughout the state at the same time.”
The committee took testimony Thursday but did not vote on the bill.
Clere told his colleagues there are unused and underused historic buildings throughout Indiana that could once again be a vital part of the economy. He said Indiana currently has an historic preservation tax credit in place, but is dysfunctional because of the $450,000 annual cap on project funding.
The cap stipulates how much money can be given as a credit annually. Clere and advocates say that cap is far too low.
The bill would raise the cap to $2 million the first year, and would continue to raise it every year by $2 million until it reaches a cap of $10 million. Of that, $450,000 would be deducted from that every year to continue paying the backlog of people waiting for their credit.
It would not, Clere said, impact those who have already applied for the credit.
Another issue with the current credit, Clere said, is that it takes too long for those who are doing a project and are eligible for the credit, to receive it.
“If someone wants to do a project today, they can apply for the credit, but it won’t be available until at least 2023,” he said. “I’m confident we would see a rush of activity as a result of raising the cap.”
Marsh Davis, president of Indiana Landmarks, said Indiana is one of about 30 states that has a historical preservation tax credit. But Indiana’s cap is one of the lowest.
“It is the least effective of all the 30-some programs in the country like it,” Davis said. “And the reason is the annual allocation cap is very low. I mean most states that have caps at all are in the tens of millions, if not more.”
No one opposed the bill Thursday. But during a summer study committee meeting about the issue, some lawmakers worried the state would not have the funds to pay for more credits.
But the state’s financial situation has changed since then and lawmakers did not question the costs during Wednesday’s meeting.
The bill would also make the tax credit transferrable. It would allow developers to apply and receive the credit and then – if they don’t have tax liability – to sell or transfer their credit. This would give the developer cash to use for the projects.
Winchester Mayor Steven Croyle said his city has tried to offer programs to help people renovate and repair historical buildings, but it hasn’t been as successful.
“Any city, the downtown area is the economic development driver of any community,” Croyle said. “The reason this is so vital to us, we have a lot of magnificent buildings in our downtown area, but over the years they’ve fallen into a state of disrepair.
“The demand for credit has far exceeded the ability to grant the credit.”
Croyle cited a specific building in his city that’s in a process of slowly being rehabilitated by the present owner. Crolye said, though, that the owner is doing it as a good public service to the community but a tax credit would likely expedite the process.
Clere said there are other opportunities for the tax credit to be beneficial.
“I think there are other less tangible considerations, including the (state’s) approaching bicentennial,” Clere said. “I know there are a lot of communities that would like to work on their downtowns for the coming bicentennial.”
Jessica Wray is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.