(WASHINGTON, DC) – Today, Mayor Muriel Bowser and Congresswoman Eleanor Holmes Norton (D-DC) hosted Alexandria Mayor Allison Silberberg and representatives from the U.S. Conference of Mayors, National League of Cities, National Association of Counties, the African American Mayors Association, and Americans Against Double Taxation at a press conference to discuss concerns around the current federal tax reform bills.
“Tax reform should provide relief for the middle class, not further burden hard-working Americans by eliminating the policies and resources that have been put in place to support them,” said Mayor Muriel Bowser. “Today, we call on Congress to preserve critical sources of financing that allow cities like Washington, DC to build affordable housing for families and veterans, invest in safe and reliable infrastructure upgrades, and support educational opportunities for residents of every age.”
Together, the leaders called on Congress to preserve the State and Local Tax Exemption (SALT) deductions, Private Activity Bonds (PABs), and critical tax credits such as the New Markets Tax Credit – a tax credit that increases the flow of capital to businesses and low-income communities by providing a modest tax incentive to private investors. The current House tax reform bill, H.R.1, would eliminate PABs and New Markets Tax Credits. These tools support public-private partnerships in cities like Washington, DC by providing low-cost, tax-exempt financing to the private sector for many important programs and projects, including:
- charter schools, such as the Thurgood Marshall Academy Public Charter School;
- nonprofits, including the new Bread for the City headquarters;
- affordable housing projects;
- universities, including Georgetown University;
- Canal Parks at the Yards; and
- the Far Southeast Family Strengthening Collaborative.
In Washington, DC, the elimination of PABs would particularly devastate affordable housing opportunities, including the production of affordable housing for veterans and families. Since Fiscal Year 2010, PABs have funded more than 9,000 affordable housing units in the District and leveraged an additional $650 million in private equity. In total, PABs and the companion four percent Low-Income Housing Tax Credit have helped deliver more than $2.5 billion in total development.
The elimination of PABs would also make it impossible for the District to continue programs such as the Industrial Revenue Bond (IRB) program. The IRB program provides access to tax-exempt financing to help businesses and non-profit organizations renovate and build new construction, make tenant improvements, and purchase capital by securing interest rates up to four percent lower than a traditional commercial loan. More than $9.5 billion has been issued through Washington, DC’s IRB program since 1994, and participants have included: Capitol Hill Day School, Georgetown University, the Spy Museum, and Gallaudet University.
In the coming weeks, Mayor Bowser will continue to advocate against the elimination of SALT and PABs.