Indeterminacy in Public Expenditure: What Is a “Historic Preservation” Tax Credit?
I bristle when public policy advocates contend that persons who oppose a favored policy simply lack an understanding of “how well the program works.” Instead of wasting breath on patronizing dismissals of those who offer alternative perspectives, perhaps a policy advocate’s time would be best spent providing the public with valuable, unbiased information with which we can form our own opinions.
It is in this spirit that I present one of my works in progress from my summer here at the Show-Me Institute.
Backers of the 25-percent Missouri Historic Preservation Tax Credit often cite the statistic that our state is “first in the nation” for “federal historic rehab tax credit projects,” so I thought that it could prove valuable to see exactly where said federal projects occurred.
Click here to view a draft map of Missouri rehabilitation projects that received the 20-percent Federal Historic Preservation Tax Credit. Data comes from a June 2010 information request to the National Park Service, and includes projects dating from 1996 to mid-June 2010.
I see no need to editorialize about the map at this stage in my research, but I think that those who proudly support historic tax credit programs would do well by the public to explain why spending millions on certain construction activities is an appropriate use of public funds.
However, given that “historic preservation” is a catchall for education, place-making, job creation, and aesthetics, defining the precise function of public expenditures made in the name of preservation is an impossible task. Our positions as taxpayers, historians, developers, contractors, homeowners, tenants, policymakers, and tourists necessarily inform our differing and potentially divergent perceptions of these policies and expenditures. Our propensity toward repeated engagement in the same argument about the relative worth of a tax dollar spent on historic preservation as opposed to one spent on public education, while refusing to acknowledge some basic facts about the program in question, often leaves us blowing hot air.
At present in Missouri, recipients of historic preservation tax credits need not acknowledge the receipt of public funds in any format on the project site. In fact, recipients of historic preservation tax credits need not even acknowledge the historic significance of their taxpayer-supported property on site, such as in the form of a plaque. If we are to have a truly informed debate about the worth of the historic preservation tax credit, I would hope that we can all agree that disclosure is a good place to start.
Without good information, our state will never make good policy.
In my mind, the verdict is still out on whether the historic preservation tax credit really does what its backers aver.
So Rex doesn’t want tax dollars spent on historic preservation despite the benefits, but he has no problem with diverting public tax dollars to private corporations trough school vouchers?
“In fact, recipients of historic preservation tax credits need not even acknowledge the historic significance of their taxpayer-supported property on site, such as in the form of a plaque.”
What? Individual property and districts are listed with the National Parks Service. Moreover, the majority of buildings in our City do actually have plaques. Have you visited Benton Park, Soulard, Lafayette Square, or Cherokee for the last 10-25 years? Quite a many buildings downtown have plaques too. Districts also require the consent of those who would be living within it’s proposed boundaries. You’re saying the process isn’t democratic or disclosed? I fail to see that considering the amount of scrutiny and opportunity for protest. If owners of single sites say no then the nomination does not occur. If a majority of the district object it does not happen. This isn’t some back-room graft orgy and you know that.
If you are suggesting that every building in our City which received subsidy have a sign then why don’t you guys first work on every suburban building that got an FHA/VA/HUD loan? Well you would be trying forever since the Federal Government essentially created the modern mortgage and spurred suburban homeownership! It’s entirely ironic to say that historic preservation reduces economic freedom when decades of irrational free choice and collusion essentially gutted our cities for suburban sprawl. We’re using these credits in order to rebuild what the private sector itself won’t deliver.
It’s completely disingenuous to argue against the Syndicate. That building might have higher occupancy if the irrational private actors didn’t nearly push us into economic oblivion by betting against the housing market knowing it would crash while ensuring those bets with AIG. I admit that Slay killed Heller’s plans to expand so perhaps there’s a good example of government picking winners and losers. Maybe Rex could ask Slay to not interfere with the private sector so much? Or at least minimize government interference to the extend that it benefits Rex’s charter school agenda and subjective ethics?
Comment by Douglas Duckworth — July 27, 2010 @ 4:49 p.m.
Douglas,
I invite you to visit showmeliving.org/taxcredits for a reality check.
I also implore you to please stop conflating “[t]he views expressed by each contributor to this blog” with the views of others. (Consider information available at the above link, specifically a person who has received the historic preservation tax credit.)
Finally, I am more than happy to say that I oppose using the income tax to subsidize spending on historic preservation. If you want preservation, then I recommend that you find a better mechanism for funding it.
Comment by Thomas Duda — July 27, 2010 @ 5:04 p.m.
Why or how would the private sector spur downtown revitalization absent subsidy? For decades the City did about everything possible to lure the private sector in terms of cutting taxes and making subsidy available. Why did so many private corporations abandon the City? Trends were for suburbanization? Yes the City did make huge planning mistakes shooting themselves in the foot. Though in 1997-98, and even until now, the mantra was that downtown wasn’t a residential market, despite decades of critics suggesting it should be done — other cities doing it. The tax credits and other subsidies made it happen. To criticize various failed projects which occurred during or after the economic meltdown is unfair. Certainly Slay and company did pick the wrong winners as with Pyramid, and we have a serious issue with collusion and a lack of public disclosure, however can you or others provide a mechanism whereby for example the Kiel Opera House would open absent public financing?
Why are these buildings not worth public finance? Do such irreplaceable structures not give our City a comparative advantage over others, and suburbia, thus calling an imperative if we hope to compete? Tiebout suggested decentralization in government with each offering different levels of service and corresponding taxes. With fragmentation in St. Louis County, and no regional land use controls that’s our environment. Thereby the City, if it seeks to compete, should use whatever means to preserve those resources which makes it unique. Reagan said vote with your feet. Why do you criticize city government which tries to get them back?
We can’t forget that though City and State government may have mismanaged some funds, that doesn’t compare to the casino gambling which brought down our economy destroying trillions in wealth. I would rather have subsidy and regulation, dead-weight losses yes, as opposed to wild west capitalism where we ignore our cities and sacrifice working class jobs for trickle down ideology. Wages remain stagnant since the destruction of unions yet productivity remains high. The fruits of ones labor isn’t being justly compensated. CEO compensation as risen several orders of magnitude. It’s clear who benefits from deregulation.
Keep up the blogging. It certainly provides a good debate.
Comment by Douglas Duckworth — July 27, 2010 @ 11:44 p.m.
Duda,
Isn’t this discussion a bit ‘abstract’ for you?
Duckworth,
You are incoherent. it’s like…you just make assertions, without any evidence to support.
Comment by Eapen Thampy — July 31, 2010 @ 2:56 a.m.