May 18, 2021
State NMTC programs have been a strong amplifier of the federal program in states across the country. On average, states that have passed measures have nearly tripled their programs from roughly $37 million to $103 million annually.
In a recent article in Novogradac’s Journal of Tax Credits, Advantage Capital Principal, Tony Toups noted that early versions of state new markets programs have evolved over time to ensure that private investment capital achieves the state’s intended priorities. These programs have been widely accepted as effective economic development tools, designed to incentivize investment in small business to grow local economies, put people to work and create good-paying local jobs.
The utility of these programs as important drivers of economic development has become even more important now as states look for viable options to bounce back after the economic turmoil caused by COVID-19. Investments via state programs offer businesses the opportunity to recover and expand, all while encouraging further investment and opportunities for growth at a time when communities need it most.
Not only are these programs a win for states and local economies, but they also enjoy a high level of bipartisan support. These programs are all about increasing access to capital in some of the most distressed and disinvested communities across the country. State programs empower legislators with the opportunity to design an economic development mechanism that fits their state’s particular needs—helping to solve for geographic needs, provide added backing for underserved markets such as minority-, woman-, and veteran-owned businesses, or even provide targeted support in the wake of natural disasters.
Overall, state NMTC programs have been valuable tools in supporting economic development and recovery initiatives. Dive deeper into how state NMTC incentives create a boost in investment in the most recent article in Novogradac’s Journal of Tax Credits here.
